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The Institute of Public Accountants has lashed out at “draconian” penalties attached to late superannuation guarantee payments, calling for the tax office to focus on recalcitrant employers instead.
Employers who fail to pay the minimum amount of super guarantee to their employee’s fund by the due date may have to pay the super guarantee charge (SGC), consisting of SG shortfall amounts, 10 per cent interest on those amounts, and an administration fee.
The next quarter collection due date is on 28 February.
“There is no doubt that employers should be making timely and accurate superannuation contributions on behalf of their staff but some penalties associated with late payments and non-compliance are draconian to say the least,” said IPA chief executive, Andrew Conway.
“The imposition of punitive costs on employers who pay their SG contributions late or in part can be extremely damaging on a small business struggling with cash flow issues.
“The issue is further compounded where an employer doesn’t lodge an SG statement or provide information to the commissioner; they are also liable to pay the additional SG penalty at a rate of up to 200 per cent of the SG charge payable.”
Mr Conway has instead called for a more measured approach, and not capture small businesses who may be struggling with cash flow issues.
“By all means, hit the recalcitrant employers hard which is where some of the new proposed measures are aimed at (education, imprisonment, direction to pay),” said Mr Conway.
“Repeat offenders that are doing the wrong thing by their employees should be dealt with but let’s get human, and do not tar every small business with the same excessive compliance brush.
“A more measured approach is required for genuine late payers than the current penalty regime allows.”