Are you an employer who has historically underpaid superannuation guarantee (SG) to your employees? If so, you must apply by the 7th of September 2020 to make disclosures during a one off amnesty. By making the disclosure on time, you might just avoid some nasty penalties. No extensions will be given beyond the 7th September 2020 to make voluntary disclosures to receive amnesty benefits. On the 30th March 2020, the ATO announced that those affected by the COVID-19 pandemic are eligible to enter into deferred payment plans to avoid losing deductions for the payment of underpaid SG.
In late 2019, the Government re – introduced Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 (the Bill) into Parliament to inaugurate and extend its proposed one – off amnesty with the goal of enabling employers to self – correct historical underpayments of SG. Originally introduced on the 24th May 2018, the amnesty was to take effect until 23 May 2019, though, the original Bill lapsed when Parliament was adjourned for the 2019 Federal Election.
The reintroduced Bill allows employers to self – correct these historical underpayments of SG without having to incur the additional penalties that would normally apply (up to 200% of the SG charge and administrative penalties). On the 24th February 2020, the Bill passed both Houses of Parliament and received Royal Assent soon after in March. Employers who wish to participate in the amnesty must get in quick before the 7th September 2020.
In order to qualify for the amnesty, a disclosure must be made to the ATO in the approved form and must not have been previously disclosed. If you have already disclosed SG charge under the lapsed previous bill between the 24 May 2018 & the 6 March 2020, then you do not have to reapply to the ATO.
Employers with underpaid SG amounts who do not take part in the amnesty will face much higher penalties if caught. These penalties include a minimum 200% penalty on top of the SG charge owed and an administration fee.
For employers that take advantage of the SG amnesty a tax deduction for payments of SG charge or contributions made during the amnesty period will be able to claimed.
This one off amnesty applies to SG shortfalls as far back as 1 July 1992 until the 31 March 2018.
The ATO acknowledges that employers affected by COVID-19 may not be able to pay their liability and has advised these employers to establish a payment plan that is flexible to assist them in making payments. These arrangements include:
1. Flexible payment terms & amounts which we will adjust if circumstances change
2. The ability to extend payment plans to beyond 7 September 2020, the end of the amnesty period (only payments made by 7 September 2020 will be deductible)
However, employers unable to maintain payments after this time may be disqualified from the amnesty and relieved of its benefits.
Specific employers applying for the amnesty will be entitled to receive a refund. In particular employers who are eligible and lodged a superannuation guarantee charge (SGC) statement between 24 May 2018 & 6 March 2020 or those that have made payments of SGC or contributions to employee superrannuation funds in 2017-19 or 2018-19 that are eligible for income tax deductions.
5ivestar Business Services are tax agents located in Carina Heights on Brisbane’s Southside. We service all areas of Brisbane, Ipswich and the Sunshine Coast for tax, BAS and bookkeeping. We also practice as virtual CFOs, take on interim CFO engagements as well and financial management, reengineering and restructures including business turnarounds and transformations and expert financial modelling.
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