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Super Guarantee Amnesty – What does it mean for your business?
Do you think you may have outstanding Superannuation contributions owing on behalf of your employees? If so, read on – you may well have a chance to rectify the issues whilst avoiding late payment penalties.
What are the details?
The Australian Taxation Office (ATO) has estimated that $2.85 billion is currently owed in late or missing Superannuation Guarantee (SG) payments. In an attempt to encourage employers to do the right thing and make any outstanding payments on behalf of their employees, the government has introduced a 12-month amnesty that will provide relief from penalties that would normally apply. This amnesty gives employers until 24 May 2019 to come forward and pay what they owe, including applicable nominal interest.
Another important inclusion is that all catch-up payments made during the amnesty are tax deductible. This could be very beneficial for employers who have let SGC payments slip over time, especially when combined with the reduction in penalties.
What happens if you don’t take advantage?
If an employer has outstanding superannuation contributions and does not take advantage of the amnesty, they will face higher penalties when they are caught down the track. Generally speaking, this penalty will be a minimum 50% on top of the SG charge they owe. It is also worth noting that while the amnesty is active, the ATO will still be enforcing the SG rules and looking for employers that do not voluntarily own up to historical obligations. If employers are caught before they come forward, the amnesty won’t apply and they’ll have to pay the full amount.
What should you do?
Even if you don’t think you have an outstanding obligation, it is wise to undertake an audit of your payroll and previous payments in order to make sure that you have fulfilled all of your obligations. If there are any discrepancies, it is crucial that you inform the ATO as soon as possible. Then you must pay all your outstanding contributions, or set up a payment plan with the ATO if you are unable to afford it at the time. Keep in mind that if you do agree to a payment plan with the ATO and you cannot meet the repayments, then the amnesty will no longer apply and it will cost you more in the long run.
With all of this in mind, the introduction of Single Touch Payroll (STP) on 1 July 2018 will mean payroll functions and Tax & Super obligations will be aligned and regularly reported. Ideally, this will reduce the number of cases where incorrect amounts of super are paid. As a result, employers need to be even more vigilant about their SGC obligations, as the ATO will be able to detect non-compliance far easier. Our article on the introduction of STP can be found here.
If you are concerned about your Superannuation obligations, make sure you get in touch with McKinley Plowman on 9301 2200 or visit www.mckinleyplowman.com.au.
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