The ATO will be softening its approach to SMSFs with a contravention report submitted about some of their activities that have been assessed as high risk in the coming financial year.
In previous financial years, the regulator has reviewed every contravention report it has received and assessed the associated fund as low, medium or high risk, which in turn determined the level of compliance action the ATO handed down.
While the assessment process will continue in the same manner, SMSF funds with a contravention report lodged will be treated differently in 2016/17.
“Previously if a contravention reported to us was risk rated as being a high risk, automatically that fund went for a comprehensive audit and review by our compliance arm,” ATO superannuation assistant commissioner Kasey Macfarlane said during a Self-managed Independent Superannuation Funds Association-hosted webinar today.
“This year our response, in those cases where it is a one-off instance, won’t be to automatically send that fund to audit.
“Instead we’ll be looking to engage with the trustee and their adviser through our early engagement and voluntary disclosure service or through targeted mail-outs, and the first instance will be to look to work with them to actually rectify the contravention rather than sending the fund automatically to audit.
“Once again by taking that approach and working collaboratively that will then allow us to focus our resources on those other instances where people are just really deliberately not complying with their obligations or consistently not complying.”