Super guarantee amnesty was introduced on 6 March 2020. Employers participating in the amnesty need to apply by 7 September 2020.
The Super Guarantee Amnesty is an opportunity to catch up on any unpaid super without the normal penalties applying. The Amnesty ends on 7 September 2020.
If you have paid the right amount of super for your employees, you don’t need to do anything further.
What you need to do
If you are worried you have not paid all your employees their super, you should talk to a tax professional or visit the ATO website to learn more about the Amnesty before it ends.
If you are eligible for the Amnesty you can pay the previously unpaid super and you will not have to pay any penalties or administration fees. You will also be able to claim a deduction for any payments you make before 7 September 2020.
Employers who come forward from 6 March 2020 need to apply for the amnesty by 7 September 2020.
The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If they identify these employers before they come forward, they will not be eligible for the benefits of the amnesty. They will also be required to pay:
- SG shortfall
- nominal interest (10%)
- administration component ($20 per employee per quarter)
- Part 7 penalty (up to 200% of the SGC).
In addition, payments of the SGC won’t be tax deductible.
Paying super is an important part of being an employer. If you’re not eligible for the amnesty, or you have unpaid super for quarters that are not eligible, you must still lodge an SGC statement.
Why you should act now
The ATO’s ability to identify underpaid SG has increased through greater data visibility as a result of more frequent reporting requirements by super funds and employers.
They are increasingly using this capability to identify employers that have underpaid SG.
If they identify underpaid SG amounts for a quarter that was covered by the amnesty that you have not disclosed, in addition to the SG shortfall you will also be liable for:
- the administration component ($20 per employee per quarter)
- up to a 200% Part 7 penalty (at minimum 100% if remission is applicable)
- nominal interest (10%)
- the general interest charge (GIC).
In addition, you will not be able to claim a tax deduction for the SGC paid.
Understandably you may wish to apply for the super guarantee amnesty (the amnesty) and may be concerned that, as a result of COVID-19, your circumstances may change and you won’t be able to pay the liability.
If you want to participate in the amnesty, the law requires you to apply by 7 September 2020.
However, the ATO will work with you to establish a payment plan that is flexible to help you to continue making payments. These arrangements include:
- flexible payment terms and amounts which we will adjust if your circumstances change
- the ability to extend the payment plan to beyond 7 September 2020, the end of the amnesty period. However, only payments made by 7 September 2020 will be deductible.
If, after they work with you, you are unable to maintain payments, the law requires the ATO to disqualify you from the amnesty and remove the amnesty benefits. However:
- the disqualification will only apply to any unpaid quarters
- you will be advised which quarters are unpaid – for these quarters they will re-apply the administration component of $20 per employee included in the disqualified quarter
- your circumstances will be taken into account when deciding whether a Part 7 penalty should be applied to your disclosure – a review of your circumstances may result in the Part 7 penalty being reduced to nil.
The ATO also recognise that for some employers, applying for the amnesty will result in them receiving a refund. In particular:
- for those employers who are eligible and lodged a super guarantee charge (SGC) statement between 24 May 2018 and 6 March 2020, we are amending your returns as quickly as possible so that any refunds can be paid to you
- if you have made payments of SGC or contributions to employee super funds in 2017–18 or 2018–19 that are eligible for income tax deductions, you should include this deduction in your tax return for the relevant year. Once they have amended your return we will pay any refund due as soon as possible. Generally this will be within 14 days.
To allow refunds to be processed in a timely manner make sure that your financial institution account details are updated and correct. You can do this via the Business Portal or by phoning the ATO.
The ATO acknowledge the difficult times the community has been experiencing recently with COVID-19 and the 2019–20 bushfires. However, the law does not allow them to vary the due date for lodgement of an amnesty application. If you’re a small or medium business and you need further assistance managing your tax and super obligations, contact the ATO’s Emergency Support Infoline on 1800 806 218 or speak with a trusted tax adviser.
Our team at Gerard Wilkes & Associates are here to help. If you have any questions regarding this article, or would like to discuss your taxation matters further, please contact us at https://www.wilkes.com.au/contact-us/ or call our office 07 5532 1733.
Article sourced from: https://www.ato.gov.au/Business/Super-for-employers/Superannuation-guarantee-amnesty/?=redirected_Sgamesty