Tax & Super Australia reported recently that the failure of the Superannuation Guarantee Amnesty to pass into law has led to a problem — namely, that employers who came forward after the announcement of the amnesty, via a media release in May 2018, on the expectation of enjoying the amnesty’s benefits, found themselves facing an uncertain outcome.
The ATO only made its position public in relation to the SG amnesty in late February this year. By 10 April, when the ATO Deputy Commissioner, Superannuation, James O’Halloran spoke before a Senate Economics Legislation Committee hearing, it was estimated by him that there had been about 10% to 15% increase in employers who had come forward and self-reported unpaid SG liabilities.
O’Halloran reported to the Senate committee that as at 28 February, about 19,000 employers had come forward with reports of unpaid SG contributions. (See his testimony here, starting on page 35 and continuing on to page 38.) Of these disclosures, he said 51% have been for amounts of around $10,000, 35% for between $10,000 and $50,000, with the balance over the spread.
Most (93%) are small to medium businesses, however he said that 12 of those who came forward were significant employers, with between 1,000 and 5,000 staff. O’Halloran emphasised that voluntary disclosures have “died off a fair bit now”.
According to the ATO, making a voluntary disclosure anytime since the May 2018 announcement of the amnesty dies not entitle a business to the concessional treatment under the amnesty until it actually becomes law. If and when it does pass into law however, the ATO says it will apply the conditions spelled out in the amnesty provisions retrospectively.
In the meantime, and in the absence of the amnesty, O’Halloran said, it is not possible to claim a deduction for SG payments. The ATO is not in a position to waive the administration fee that applies, but does have the discretion to remit the additional Part 7 penalty (200%) under Section 62(3) of the SGAA.
He also noted that many of those who came forward may not be eligible for any special treatment anyway, as there are a significant number that are under audit, and/or have outstanding SG obligations dating from before the amnesty was meant to have taken effect.