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The latest news from LBW.....

...... includes tax and technology updates and general business information.

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Super Stream Deadline Approaches

31 October Deadline...

... but only for employers with 20 or more employees

You need to be using SuperStream no later than 31 October 2015.

There's not much on the employer checklist - but you need to start!

1. Choose an option

 To be SuperStream compliant  you need to pay super electronically.  Choose the option that suits your business and check that it's SuperStream-ready.

  • 1. Super fund services

Large super funds have online payment services you can use. Check with your fund.

  • 2. Super clearing house

A clearing house pays super to your employees' funds for you. You make a single payment to the clearing house and they do the rest.

You can also choose from several commercial options. Your super fund may have a clearing house you can use. Talk to your fund to see what they offer.

  • 3. Payroll system

If you use a payroll system, check with your system provider that it is SuperStream ready. You may need to update your system.

 Accountant or bookkeeper services

You can also ask your bookkeeper to handle your super payments, using one of the options above.

Remember: Even though others may pay super for your employees, you're still responsible to ensure they pay it correctly.

2. Collect information

 You'll need to collect some information from your employees. Once you've got the information, enter it into your system and you're ready to start using SuperStream.

3. Use SuperStream

Start using SuperStream well before the deadline. This will allow you to enjoy the benefits sooner and ensure everything is running smoothly.

On Friday, 31 July 2015 Katarina Taurian of SMSF Adviser reported that the ATO has recently outlined and explained how many penalties it handed out in the 2014/15 year as well as the number of trustee disqualifications, notices of non-compliance and wind-ups.

The ATO disqualified approximately 660 trustees and issued 92 notices of non-compliance, according to the ATO's director in superannuation, Mary Simmons.  Further, the ATO wound up approximately 44 SMSFs due to contraventions.

Under its new penalty powers, the ATO has also handed out approximately 54 education directions and 27 rectification directions, Ms Simmons said.

The powers, introduced in July last year, allow the ATO to impose administrative penalties on trustees for certain SIS Act breaches.  In addition, the powers allow the ATO to direct SMSF trustees to fix a breach and direct trustees to undergo education in the event of a breach.

"We haven't seen the penalties themselves cause a significant shift in what contraventions are being reported or the number of contraventions themselves that are being reported," Ms Simmons told delegates at the SMSF Association's state technical conference in Sydney this week.

"That could also be just a function of timing. When you think that penalties apply to contraventions from 1 July 2014, and the reporting timelines, and when most SMSFs would lodge – we are still waiting on a lot of that intel to come through."

Discussing administration penalties, Ms Simmons noted that from 31 July this year, there will be an increase in the penalty units from $170 to $180.  This new figure will apply to all contraventions that take place after 31 July this year. The figure will also be indexed every three years from 1 July this year.

In light of recent confusion, Ms Simmons also stressed that the lodgement of an auditor contravention report does not automatically result in a penalty for a trustee or member.

"What is really important to make clear is that we actually firstly confirm that there's a contravention before we can impose a penalty," Ms Simmons said.

ATO targets SMSF loan arrangements

The ATO updated its website last week saying that it understands some individuals and organisations are promoting arrangements where SMSF monies are deposited into unit trusts or pooled investment trusts less a management fee. This money is then used to obtain a personal or business related mortgage which results in the SMSF assets being used to provide members with current-day benefits.

The ATO says it is closely scrutinising these lending arrangements on the following weblink. The ATO says such arrangements would breach the sole purpose test as the SMSF is being used for a purpose other than providing retirement benefits for members. According to the ATO, the primary purpose of such arrangements is to enable individuals and any associates to use their super savings, rather than assets held outside the fund to provide assistance to members or relatives.