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ATO expands review to reduce SAN misuse

ATO SAN misuse

The ATO has announced a strategy to improve its detection of SAN misuse, with a mailout set to commence in early September.

The ATO has announced a new strategy to minimise SMSF auditor number (SAN) misuse, with its next mailout to commence in early September, despite previously stating it is not a widespread problem.

In a website update, the regulator said this year’s SAN mailout will contain audits from the previous financial year, as well as those from past years where the audit date was reported during 1 July 2020 to 30 June 2021.

As a result, the ATO advised SMSF auditors to carefully check and report if any SAN misuse had taken place and to also report other details such as incorrect audit dates or audited funds that were not on the list.

“Where [the ATO has] received an auditor contravention report and/or an audit complete advice for the corresponding financial year, we will remove these funds from the list,” it stated.

In the event where auditors found no misreported events, the regulator advised that situation should still be reported to confirm SMSFs on the list did receive an audit.

Auditors were also reminded that new SMSFs or funds that have missed lodgements in the previous years will have to lodge their SMSF annual return (SAR) for 2020/21 by 31 October, but funds lodging via tax agents were exempt.

SMSFs overdue by more than two weeks with no contact with the ATO have been warned their status will be changed on the Super Fund Lookup until the overdue lodgements are up to date.

“With a status ‘Regulation details removed’, APRA (Australian Prudential Regulation Authority) funds will not be able to roll over member benefits and employers will not be able to make super guarantee payments to the fund’s members,” the regulator said.

In addition, the ATO has reminded SMSFs to appoint an approved auditor at least 45 days before the SAR lodgement due date.

The regulator has warned approved auditors must be independent and free from personal or business relationships with those involved in the fund.

“They should also not audit a fund where they work for a firm who provides your fund with other services such as certain accounting services, tax, super or financial planning advice,” it said.

A list of approved SMSF auditors can be found on the Australian Securities and Investments Commission’s website.

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