A senior superannuation executive has suggested the internal processes and communications of the ATO require review and streamlining in order to improve the accuracy of the Super Fund Lookup facility for SMSFs granted an annual return lodgement extension.
Chartered Accountants Australia and New Zealand (CAANZ) superannuation leader Tony Negline proposed the course of action in response to circumstances where an SMSF is taken off Super Fund Lookup for late annual return lodgement despite the fund’s tax agent having received a lodgement extension from the ATO.
“There is an area [within the ATO] that runs Super Fund Lookup and the removal of funds from the register and there’s an entirely different area that runs the extension of lodgements. One of the things the ATO needs to do, in an ideal world, is to have those two parts of [the organisation] constantly swapping information,” Negline explained during a panel discussion at the CAANZ SMSF Conference 2021.
“If a lot of tax agents apply for an extension and get it then a back log [of late returns] can sometimes arise and that’s why some of the recent problems have emerged,” he added.
“So I think it’s probably been a backlog situation [that has led to this anomaly] and there has to be [some] give somewhere in the system and unfortunately I think it’s just been the transfer of information from one area of the ATO to another.”
Fellow panellist Deloitte superannuation, SMSF and retirement savings partner Liz Westover said the issue extended to the reinstatement of SMSFs on Super Fund Lookup after the relevant annual return granted an extension had been lodged.
Negline revealed the regulator is working toward finding a solution to the problem and to this end shared the ATO’s response to the situation.
“To minimise the impact of delays in processing the lodgement deferrals on the removal of SMSFs from Super Fund Lookup, we have increased the frequency of the operation of the model which updates the register,” the ATO said in a statement.
Negline said it was not clear how frequently the regulator is now reviewing the register but he hoped the change would allow the system to work more smoothly.