Business News

ATO early engagement service up and running

The ATO’s early engagement and voluntary disclosure service will now accept notifications from SMSF trustees and practitioners of unrectified regulatory contraventions.

The service was made available for use on 31 May and will act as a centralised portal for SMSFs to notify the ATO of unrectified regulatory contraventions, and to facilitate early engagement and rectification.

It should only be used when there is a clear contravention of the Superannuation Industry (Supervision) (SIS) Act or regulations and it remains unrectified at the time the SMSF auditor reports it to the ATO.

Trustees or an SMSF professional acting on their behalf will need to complete the SMSF regulatory contravention disclosure form or apply in writing with the supporting documents.

The ATO will acknowledge the SMSF’s voluntary disclosure in writing within 28 days.

The voluntary disclosure will then be risk assessed, generally resulting in an ATO review to consider the undertaking or rectification proposal.

During an ATO webinar explaining the new service, ATO assistant director Fran Kearney said: “By working with us to rectify serious breaches, the early engagement should result in more timely and better enforcement outcomes for the SMSF trustee.

“It is expected that the trustees will have engaged SMSF professionals to receive guidance about rectifying the breach prior to using this service.”

Kearney said the direct benefits for SMSFs making a voluntary disclosure included more timely resolution of contraventions, resulting in greater protection of fund assets and scope for less serious compliance enforcement outcomes.

In addition, using the ATO service could result in greater scope for remission of SIS Act administrative penalties and a potential reduction in income tax shortfall penalties.

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