SMSF practitioners must acknowledge the inevitability of the transfer balance account report (TBAR) regime moving to full, automated online reporting for the sector and what this will mean for their businesses.
“The importing thing with TBAR [the industry must understand] is this is just one of a number of reporting events that will eventually happen, as a matter of course, as the administration side of SMSFs becomes more automated,” SMSF Association head of technical Peter Hogan told selfmanagedsuper.
“A lot of our members and a lot of people in this profession generally have missed the point that Australian Prudential Regulation Authority (APRA)-regulated funds are already in a full-blown reporting regime to the extent that some of them now report on a daily basis as it’s easier from a practical point of view.
“They have so many transactions to report. They don’t want to wait till 10 days after the end of the month in which a transaction occurred; they report them as they occur.”
Hogan said while the TBAR is a requirement of trustees, as the online administration support of SMSFs increases over time, many of these transactions will be automatically reported anyhow.
“So total super balance reporting, as an example, is not a legal requirement at the moment, but one that will ultimately [be affected by the] improvements to the transfer of information around online developments,” he noted.
“While TBAR is mandatory, we will see that a number of other transactions and reporting arrangements and so on, in relation to a member’s account balance and contributions, will all be online and will just happen as a matter of course.
“That’s something I think advisers need to continue to be aware of – that in their SMSF businesses, they do actually have to consider automation and the impact of automation of the industry very carefully, and make sure their businesses are properly aligned if they want to stay in this space.”
Commenting on whether many SMSF advisers and accountants involved in the administration of funds were thinking about this specific development, he said it did not seem to be widely considered.
“They’re still sort of saying they’ll just do what they have to do and put it [reporting] off till the last minute,” he revealed.
“But there’s no doubt that the information that Class collects, for example, aggregates together for the administrators and their systems to use, and it’s only going to have a greater and further reach across SMSFs.
“And all of that will be available and reported to the ATO, just as it is now with APRA funds.”
He said staying on top of this development is a key message the SMSF Association is communicating to its members.
“People will need to start addressing this issue now,” he said.
“It took about six years for the APRA funds to move to a fully automated system and the expectation is that SMSFs may well be the same – we’re probably already in year two since our introduction to that system in terms of when it was first discussed.
“So there’s quite a bit of work for SMSF advisers who do administration to think about this.”
