SG amnesty 'not a bad thing' despite limbo, says IPA
The Institute of Public Accountants has called on members to encourage affected clients to take up the government’s superannuation guarantee amnesty even if the bill putting it in place ultimately doesn’t pass through Parliament.
Speaking to Public Accountant, IPA general manager of technical policy Tony Greco said there are already employers who have come forward to take up the SG amnesty, even though it is yet to become law.
If the amnesty doesn’t become law, Mr Greco said small businesses should still fulfil their SG obligations even if the penalty regime kicks in and the ATO follows the force of the law.
“If you come forward, you're still meeting an obligation that the law requires that employer to make, so that's not a bad thing, but you may not get full concessionary benefits of the amnesty,” he said.
“I think you have to go into that disclosure with open eyes and say, ‘OK if this doesn't become law, then I have to wear the brunt of the penalty regime’.
“At the end of the day, it was an obligation that the business hadn't dealt with, so they're going to get clobbered by the penalty and that is non-deductibility of the payment, which is quite severe, and the admin fee and potentially some of those other interest.
Mr Greco said that, with the benefit of hindsight, the amnesty period should’ve started from the date that the law would be enacted rather than 24 May when the amnesty was announced.
“Let's say this thing gets through some time in August. You've already lost part of May, June, July and part of August. Cash flow ticks in too, so the business has less time to take advantage of the amnesty. Whether that is still an option remains to be seen,” Mr Greco said.
Earlier this week, Sky Accountants chief technical officer Ashley Carmichael noted that while many accountants will certainly be pushing the SG amnesty on their clients, he thinks a lot of small businesses would be fearful of disclosing their issues.
“No business really wants the ATO’s attention. I think they would be fearful that putting their hand up for this could lead to audit activity in the future,” Mr Carmichael said.
The government began the SG amnesty on 24 May under its Treasury Laws Amendment (Superannuation 2018 Measures) Bill 2018, even though the bill is still yet to pass through Parliament.