This includes breaches that may be inadvertent. This new legislation received Royal Assent on 18 March 2014 and will make new penalties available to the ATO for breaches that occur on or after 1 July 2014.

The legislation will also apply to contraventions that were made prior to 1 July 2014.

Examples of breaches of law include:
• loan to a member of the fund
• failure to prepare accounts in a year of income
• failure to keep minutes

The new penalties are designed to make it easier for the ATO to impose a monetary penalty on trustees who breach the law. The penalties will range from $850 to $10,200 depending on the type of breach that has occurred.

This monetary penalty will apply to the trustees personally and cannot be paid using the super fund’s assets.

The ATO has stated that if trustees are making progress in resolving the contravention by 1 July 2014 it will consider these circumstances in any request to remit any imposed administrative penalties.

These new penalties represent a significant change for SMSF trustees. The ATO’s ability to issue monetary penalties in the past has been restricted due to the severity of penalties available to them.

It is expected that the ATO will adopt a practice of imposing administrative penalties and require trustees to demonstrate that the penalty was unwarranted.

These changes have increased the risk that trustees will be exposed to financial penalties if a breach of the law occurs, so it is important that trustees ensure that they are vigilant in meeting all compliance requirements.

If you would like to discuss these chanes with our SMSF team then please do not hesitate to contact this office.

Disclaimer

The post New penalties for SMSF trustees appeared first on Newcastle Financial Planners & Financial Advisors.

Failing to meet superannuation obligations will generate significant penalties for employers. In addition to interest and administrative penalties, employers lose the tax deduction that would normally be available for superannuation payments made on time.

The total cost to businesses found to have underpaid their super or paid it late can be substantial. The ATO has no discretion to waive or reduce these penalties.

Recent changes to superannuation legislation also means that company Directors may be held personally liable for any unpaid superannuation contributions and the associated interest and administration charges.

The ATO has regularly undertaken reviews of superannuation in the past.

Penalties have greatly contributed to revenue for the ATO and with the increased resources now to be provided to the ATO by the Government it is likely the number of these reviews will be increased.

Considering the potential financial penalties and increased scrutiny, it is essential that employers take the opportunity to review their internal systems and ensure that superannuation payments are being made correctly, consistently and in a timely manner.

If you are a business owner and are unsure about your Superannuation responsibilities, contact our office today!

Disclaimer

The post ATO lifts the bar on Super appeared first on Newcastle Financial Planners & Financial Advisors.