The Super Guarantee Amnesty Is Back

The Government has brought back the Superannuation Guarantee (SG) amnesty. Employers will now be able to self-correct any of their SG obligations they have fallen behind on, only facing reduced penalties. However, employers who do not take advantage of this limited-time amnesty will face harsh penalties.   

After the announcement of the amnesty, the Government has found that over 7,000 employers have voluntarily disclosed unpaid super. This initiative is designed to reduce the current SG tax gap which estimates point to sitting around $2.85 billion in missed SG payments.  

 

When does the amnesty start? 

 

The amnesty will apply from the March quarter 2018 to 6 months after the legislation has passed parliament. As the legislation is currently before parliament there is no definitive end date until the legislation is passed. Employers will have this time period to voluntarily disclose any unpaid or underpaid SG payments.  

 

How do I qualify for the amnesty? 

 

The amnesty only applies to voluntary disclosures. This means that you need to disclose the outstanding SG to the Tax Commissioner and either pay the full amount owing or enter a payment plan with the ATO. If you do enter a payment plan but do not meet the payments the amnesty will no longer apply.  

If the ATO discovers the underpayment before you voluntarily declare it, you will no longer qualify for the amnesty.  

 

What do employers pay under the amnesty? 

 

Under the amnesty, there will still be an SG charge (SGC) that employers must pay. However, the penalties have been significantly reduced.  

Normally the employer would need to pay: 

  • The outstanding SG 

  • Interest of 10% per annum 

  • An administration fee of $20 per employee with a shortfall per quarter 

  • Penalties of up to 200% of the underlying SG charge 

  • A general interest charge if the SGC or penalties are not paid by their due date 

  • The SGC amount is not deductible 

 

Under the amnesty employers must pay: 

  • The outstanding SG 

  • Interest of 10% per annum 

  • No administration fees 

  • No penalties 

  • A general interest charge 

  • The SGC amount is deductible 

 

What happens if you do not take advantage of the amnesty? 

 

Currently, if the employer fails to voluntarily disclose an underpayment of SG to employees, they are required to pay SGC penalties up to 200%. However, in certain cases, the ATO may reduce the penalty in whole or part.  

Now, accompanying the amnesty legislation is new legislation removing the ATO’s power to reduce penalties below 100%. So, even in cases where employers have made a genuine mistake, they could face penalties at a minimum of 100%.  

 

Conclusion 

 

Now is a good time to undertake a payroll audit to ensure that your SG calculations are correct. If you find that your business has fallen behind, you can take advantage of the amnesty before it has expired. This audit should be undertaken even if you believe your calculations were correct.  

If you are unsure whether you have fallen behind or found out that you have, you should talk to your accountant immediately. A trusted accountant will assist you in taking advantage of the amnesty to ensure your business will be faced with as few penalties as possible. 

For one of Brisbane’s most trusted accountant firms contact Link Advisors.