The Government has announced a 12 month amnesty for employers who have failed to meet past superannuation guarantee obligations for their employees – also known as a “SG shortfall”.
Once the legislation is passed by parliament, the amnesty is intended to apply retrospectively for 12 months from 24 May 2018 to 23 May 2019.
In its proposed form the amnesty is a one off opportunity to self-correct non-compliance without penalty and applies to superannuation unpaid or paid late (SG shortfalls), for any period from 1 July 1992 to 31 March 2018.
To qualify for the amnesty, employers must make a voluntary disclosure of any SG shortfall by completing the relevant form electronically on the business portal. If the funds outstanding are not able to be paid in full, the ATO can organise a payment arrangement.
By self-reporting employers will be required to pay the outstanding superannuation plus an interest component, but they will not be subject to penalties or charges (including the administration component of $20 per employee per quarter) which would usually apply to late payments.
More importantly, any catch-up payments of superannuation made pursuant to the amnesty will be tax deductible, which is not generally the case with a SG shortfall.
Employers who don’t come forward during the amnesty may face higher penalties in future.
Further details on the Employee Superannuation Amnesty can be found at https://www.ato.gov.au/Business/Super-for-employers/Superannuation-Guarantee-Amnesty/
As mentioned the amnesty is yet to be passed by parliament. Clients of Brealey Quill Kenny Accountants should review their superannuation practices and contact our office should they wish to take advantage if the amnesty.