ATO, Regulation, SMSF

Voluntary disclosure needs tenacity

ATO SMSF voluntary disclosure scheme

Patience and persistence are required when looking to use the ATO’s early engagement and voluntary disclosure scheme to secure a satisfactory outcome.

The partner of a large accounting firm has acknowledged the ATO’s early engagement and voluntary disclosure scheme takes a long time to process approaches from SMSF trustees and patience and persistence are necessary in order to enjoy positive outcomes from it.

“[There are long delays] and that has been my experience as well. It can take a while so you are in it for the long haul,” Deloitte superannuation, SMSF and retirement savings partner Liz Westover told attendees of Class Ignite 2023 hosted in Sydney last week.

“From time to time you might not necessarily get the result you want, but don’t stop fighting.”

To this end, Westover shared a recent client experience where an initial ruling under the scheme was challenged with success.

“I helped another accounting firm’s client quite recently [in this fashion]. They were getting a negative outcome on their voluntary disclosure [application] and it just wasn’t reasonable to me,” she noted.

“So I was able to go in and talk to the [relevant ATO] people and we ended up getting a good result. We got [the original response] revised and revisited and we ended up getting a good result. So don’t stop the fight [even] if you’re not getting the result you want.”

According to Westover, a particular philosophy is required to successfully challenge an unwanted outcome from the voluntary disclosure process.

“As long as you’re fair and reasonable with regard to what you’re fighting for, [there will be a possibility a decision will be overturned],” she said.

Regardless of these hurdles, she pointed out using the voluntary disclosure scheme is still of great benefit for trustees who find themselves facing compliance breaches.

“I’ve used it a number of times and I’ve found it gets the ATO on your side to work through how you’re going to rectify some of these problems. So put your hand up, say this has happened, we’re working on it,” she advised.

“[Further, the regulator will] not harass you about lodgements if something can’t be lodged because you’ve got to sort out a problem. They’ll help you work through an agreed rectification process if rectification is possible or they might get you to sign an enforceable undertaking as part of that process.”

She recognised one change has been made to the procedure, being the application form must now be signed by at least one director of a corporate trustee as opposed to approval from a tax agent or auditor as was previously the case.

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