ATO, SMSF, SMSFA, Superannuation

New clearing house protocols for SMSFs

ATO Small Business Superannuation Clearing House Superannuation guarantee SMSF SBSCH Employees

The ATO has implemented an additional verification measure for any entitlements deposited into an employee's SMSF account via the Small Business Superannuation Clearing House.

Employers using the Small Business Superannuation Clearing House (SBSCH) for super guarantee (SG) payments to an employee’s SMSF have been urged to double-check the accuracy of the latter’s bank account details as the ATO is introducing an extra verification step for these transactions from 15 March 2024.

“The ATO’s validation process will require small employers using the SBSCH to ensure a perfect alignment between their employees’ SMSF bank account details and the corresponding fund bank account details recorded by the ATO,” SMSF Association head of technical Mary Simmons noted.

“The validation will focus on the BSB and account number as registered under the SMSF’s superannuation role within ATO systems. For any employee where there is no exact match, the SBSCH will not process their superannuation payment.

“If you have small business clients using the SBSCH, it is important to urge them to contact their employees to confirm that the SMSF bank account they pay superannuation contributions to is the same as the SMSF bank account registered against the superannuation role with the ATO.

“Should there be a need for an employee to amend SMSF bank details held by the ATO, it’s crucial to communicate these changes to all fund members as the ATO will issue email or text alerts to ensure all fund members are informed.”

Simmons explained the step was added to provide additional precision and security in the payment of entitlements to SMSF trustees and highlighted the importance of rectifying any differences as soon as possible, warning failure to do so could lead to consequences.

“Given the proximity of the next SG contribution deadline on 28 April 2024, it is important to take action well ahead of this date to prevent potential compliance issues,” she noted.

“Small employers delaying the review and update of their employees’ SMSF bank records risk facing SG shortfalls and potential penalties as there may be insufficient time to rectify a discrepancy.”

The ATO stated if there is a mismatch between the account details or the employee has not listed their bank account details, employers will receive an invalid super fund bank details error on the SBSCH payment instruction.

The regulator encouraged employers, tax agents and trustees to change any details if required in the SBSCH employees resource.

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