Has your business fallen behind in paying employee’s superannuation?
If so, we strongly suggest you read this!
The super guarantee (SG) amnesty is now officially legislated. Under the amnesty, employers have a 6-month window until 7 September 2020 to disclose, lodge and pay unpaid SG amounts for their employees.
To be eligible for the amnesty, you must declare and pay your SG shortfalls and interest charges. Payments made during the amnesty can be claimed as tax deductions.
SG shortfalls for any quarter between 1 July 1992 and 31 March 2018 may be eligible for the amnesty if they haven’t been disclosed previously or aren’t subject to a current or previous audit.
Applications for the amnesty close at 11.59pm on 7 September 2020. The closing date cannot be changed, even if you are impacted by bushfires or COVID-19.
After the amnesty ends, the ATO’s ability to remit penalties applied as a result of an audit is limited by law. This means shortfalls will have a minimum penalty of 100% applied but can be as much as 200%.
The ATO has also said that its audit program will continue during the amnesty period.
How to apply for the amnesty
To apply for the amnesty, you must:
- lodge one approved SG amnesty form (XLS 613KB);
- complete one form per quarter using the instructions contained in the form;
- check amounts are correct and there are no errors on the forms;
- complete the declaration to confirm you are applying for the amnesty;
- save the form as an .xls file.
Do not use the SGC calculator in the Business Portal if you want to apply for the amnesty.
To ensure the correct calculation of the amount of SGC you owe and efficient processing of your amnesty application you need to:
- use the Mail function in the Business Portal;
- select New message;
- type Topic: Superannuation;
- type Subject: Lodge SG amnesty;
- attach the completed SG amnesty form (XLS 613KB) for each quarter to the secure mail message. You can attach up to 6 forms totalling no more than 4MB.
The ATO will tell you which quarters are eligible for the amnesty once they receive the forms.
If you are eligible for the amnesty, you:
- will be informed in writing within 14 business days of the ATO receiving your application;
- won’t be charged the administration component ($20 per employee per quarter) or part 7 penalty;
- will need to pay or set up a payment plan to pay the total amount of SGC you owe. We will send you your payment reference number (PRN).
The ATO has said that it will work with employers to establish a payment plan that is flexible to help them to continue making payments. These arrangements include:
- flexible payment terms and amounts which the ATO will adjust if circumstances change;
- the ability to extend the payment plan to beyond 7 September 2020, the end of the amnesty period – only payments made by 7 September 2020 will be deductible.
It is important to note that if you agree a payment plan with the ATO, but you are unable to maintain payments, you will be disqualified from the amnesty and the amnesty benefits will be removed. The disqualification will only apply to any unpaid quarters – the administration component of $20 per employee will be re-applied. The ATO will take your circumstances into account when deciding whether a Part 7 penalty should be applied.
If you previously lodged an SGC statement
If you previously disclosed unpaid SG to the ATO in anticipation of the SG amnesty, you don’t need to lodge again or apply on the SG amnesty form.
The ATO will review all disclosures received between 24 May 2018 and 6 March 2020 and advise you of your eligibility. The $20 per employee per quarter administration charge will be refunded if you meet the amnesty criteria.
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 the ATO has amended your return it will pay any refund due as soon as possible (generally within 14 days).
Tip! Your professional advisor can provide further advice on participating in the amnesty, based upon your particular circumstances.
Ref: TaxWise Business April 2020