The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has now been passed through both houses of Parliament and is awaiting royal assent. The Amnesty will end six (6) months from the date it receives royal assent.
What this means for you as an employer is that you have six months to disclose any historical non-compliance before tougher penalties start to apply.
By historical non-compliance the ATO means a one-off amnesty to encourage employers to self-correct any historical super guarantee (SG) non-compliance from 1 July 1992 to the quarter ending 31 March 2018.
Its important to note that this amnesty does not cover any quarters from 1 April 2018 onwards.
Employers will be able to claim tax deductions for contributions or charges for SG made during the amnesty period and then offset them against the SG charge. The amnesty also allows for the administrative component and Part 7 penalty (that may otherwise occur) to be removed.
Since the amnesty was announced in May 2018 around 7,000 employers have come forward to voluntarily disclose their unpaid SG and Treasury expects at least another 7,000 to come forward once royal assent has been given. There is an estimated $230M in SG payments expected to employees who may have otherwise missed out.
The new legislation will also impose minimum penalties on employers who fail to come forward during the amnesty period by limiting the commissioner’s ability to remit penalties below 100 per cent of the amount of SG charge payable.
The amnesty will make it easier for workers to secure the super they are owed by not hitting employers with the penalties usually associated with late payment.
Regardless of the amnesty, for those that do not step up and volunteer their non-compliance, the ATO will continue its usual audit and enforcement activity against employers and they will now face significantly higher penalties when they are caught.
We encourage all employers to check any outstandings that you may have and if you need any assistance, please contact John Kalachian (john@exemplary-financial.flywheelsites.com) or Henry Zhao (henry@exemplary-financial.flywheelsites.com) at Fortis Accounting Partners on 02 9267 0108.
