The Plan for Simpler Super specifically includes more and better regulation of SMSFs - including:
A new annual return document will replace the existing: regulatory return, income tax return and member contribution statement. This will simplify SMSF administration and may improve the consistency of information SMSFs provide.
All new SMSF trustees will have to sign a declaration stating they are aware of their obligations as trustees and of their regulatory obligations.
Even though the ATO has gradually increased the intensity of its supervision of SMSFs in recent years, the ATO now plans to 'triple [its] casework for self managed superannuation funds' over the next two years.
This reflects the ongoing change in the ATO's approach from an educational approach to a more active 'compliance verification program' involving site visits aiming to establish positive compliance early in a fund's life. Presumably this is some extension of the current system in which the ATO notifies funds if there is an obvious compliance issue - such as a single individual trustee of a fund.
The ATO also plans to revise and re-issue its educational tools in light of Simpler Super.
It seems the ATO sees its supervision of SMSF auditors as a key way to improve SMSF compliance. This supervision will involve the ATO reviewing an auditor's processes looking for compliance issues that may lead to direct SMSF audit.
Perhaps as a consequence of the ATO's move towards more active compliance it has not disclosed an intention to allow SMSFs any leeway in coming to terms with Simpler Super. For example, the Deputy Commissioner made this clear in her speech of 7 March 2007 when she said 'I've been asked whether we will allow period [sic] of grace to allow trustees of self managed funds to get used to the new self managed fund rules. The short answer is no.'
This approach seems reasonable given that the law on the main compliance problem areas is not changing fundamentally, see below.
Reported problem areas with SMSF compliance continue to cover similar ground. The auditor contravention reports lodged since the system was introduced in July 2004, breakdown as follows:
For more information on the ATO's approach:
For more information in relation to Simpler Super generally, please contact Maddocks on 03 9288 0555 or 02 8223 4100 and ask for a member of the Maddocks Superannuation Team.
Julian Smith is a partner in the Maddocks Commercial team.
Julian advises extensively in the following areas:
Julian advises clients ranging from public companies servicing the wholesale financial services market to high net worth individuals and their advisers.
Julian has been with Maddocks since undertaking articles in 2001.
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