A failure to include bank account and auditor details have been flagged as two of the most common errors made when lodging an SMSF annual return (SAR), according to the ATO.
The regulator, which is due to receive the first round of SAR lodgements in early March, informed trustees via an update on its website that failing to include a bank account in the name of their SMSF was one of the most common errors seen in annual return lodgements.
“You need a bank account in your fund’s name to manage the SMSF operations and to accept contributions, rollovers of super and income from investments. You need to report this account when lodging your SAR,” the ATO said.
“The account must be separate from your trustees’ individual bank accounts and any related employers’ or advisers’ bank accounts. This will protect your fund’s assets and ensure super payments can be made to your SMSF.”
Incorrect or missing auditor details in a SAR was another common error flagged by the ATO, which told trustees they must include a copy of the audit report and the SMSF auditor number, auditor name and the date the audit was completed in their SAR or face action from the regulator.
“If you lodge your SAR without approved SMSF auditor details, it will be suspended and not recognised as a lodgement. This will impact the complying status of the fund until the SAR is lodged with the required information,” it noted.
“If the auditor details are incorrect, you may also be penalised for making a false and misleading statement.”
It also highlighted SMSFs were incorrectly valuing assets and any intentional behaviour in this area could be penalised.
“SMSF assets need to be reported at market value as at 30 June to prepare your fund’s accounts, statements and SAR. If you follow our valuation guidelines, we’ll generally accept the valuation you provide,” it said.
“Accurate asset valuation is important to ensure your SMSF retains its complying fund status. Penalties may apply for inaccurate valuations as these can have an impact on your members’ balances.”
In January, the ATO also reminded SMSFs lodging their SAR to report the fund’s Australian business number to allow its system to correctly match members to the fund and thus ensure account details for the SMSF are displayed for the member when they access ATO online services.
The date for the first round of SAR lodgements for 2021 is 28 February, but the ATO has highlighted this falls on a Sunday and the due date will be 1 March. It said any SAR that is more than two weeks’ overdue will have its status on Super Fund Lookup changed to ‘Regulation details removed’ and will be ineligible to receive rollovers or employer superannuation guarantee payments.