A super guarantee amnesty was introduced on 6 March 2020. Employers participating in the amnesty need to apply by 7 September 2020. The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018.
An employer who qualifies for and takes advantage of the amnesty:
- Will be able to claim a tax deduction for the SGC amounts you pay to the ATO by 7 September 2020;
- Will not have to pay the administrative component ($20 per employee per period); and
- Will not be liable for an additional 200% penalty for failing to provide an SGC statement (s 60 SGAA).
The first point above is particularly important because ordinarily late employee superannuation is not tax deductible. If paid by 7 September 2020, such payments will be deductible but not thereafter.
The ATO has given firm commitments to work collaboratively with those who participate in the amnesty. This could include making arrangements for flexible payment plans which can be amended if and when circumstances change. The terms of such payment plans could see payments extend beyond the 7 September 2020 deadline but remember only payments made by then will be tax deductible to the employer entity.
By taking advantage of the amnesty, the employer is still subject to paying the SGC on the disclosed shortfall amounts owing to the employees plus nominal interest plus GIC.
The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If the ATO identify these employers before they come forward, the employers will not be eligible for the benefits of the amnesty.
They will also be required to pay:
- SG shortfall
- Nominal interest (10%)
- Administration component ($20 per employee per quarter)
- Part 7 penalty (up to 200% of the SGC).
In addition, payments of the SGC won’t be tax deductible.
Additionally, Director Penalty Notices (DPN) can now be issued for SGC obligations. Failure to pay superannuation on time, may have implications for Directors personal assets under DPN.
- Review your SCG payments for late or underpaid amounts
- Consult with your Armada Advisor for assistance/clarification
- Complete and submit the SG amnesty form before the 7 September 2020, deadline
With the amount of information likely to be required, particularly if a larger employer is involved, it may take some time to pull everything together. Thus, if consideration is being given to accessing the amnesty, it is important to act quickly now as time is rapidly running out.
For more information, contact your Armada Advisor
Armada Accountants & Advisors
(08) 6165 4000