Trustees who are failing to lodge their initial SMSF annual return as required remains a major concern for the ATO as this factor tends to be indicative of other compliance issues that will also eventually surface.
Speaking at last week’s SMSF Trustee Empowerment Day 2021, hosted by smstrusteenews, the sister publication of selfmanagedsuper, ATO self-managed super fund segment director Steve Keating said: “In recent years there has been what I can only describe as an alarming increase in the number of SMSFs that fail to lodge their first annual return and become what we call never lodgers.
“This is particularly concerning if it also appears that there has been a rollover into those SMSFs as this is a strong indicator that illegal early release [of benefits] may have occurred.”
According to Keating, the number of first annual returns lodged from SMSFs newly registered in the 2020 financial year does not indicate this worrying trend is abating.
“Of the 22,000 new registrants in the 2020 year, 25 per cent have failed to meet their very first lodgement obligation and that’s not a very good start to their journey as an SMSF trustee, particularly as we’ve issued reminder letters about their upcoming lodgement due date,” he noted.
To this end, he warned SMSF trustees who registered their fund in the 2021 financial year that the lodgement for some funds’ initial annual return will be coming up at the end of October.
“So we’ll be paying close attention and following up on those SMSFs that fail to lodge their first return,” he said.
He took the opportunity to explain exactly why the lodgement process is so critical for the integrity of the sector.
“Without lodgement we have no visibility of the fund’s compliance with its regulatory and tax obligations,” he said.
“It is therefore essential for all funds to keep lodging their annual return.”
