The AAT has held that the Commissioner had correctly imposed the nominal interest charge component in relation to amended assessments of superannuation guarantee charge issued to a taxpayer.
In April 2013, the Commissioner notified the taxpayer that he proposed to undertake an audit of the taxpayer’s employer obligations. After the audit was completed, the Commissioner made amended assessments of super guarantee charge for the quarters ended 31 December 2010, 31 March 2011, 30 September 2011, 30 June 2012, 30 September 2012 and 31 December 2012. Those assessments were made because the taxpayer had failed, by relevant due dates, to make all the necessary contributions in respect of its employees’ superannuation.
Following the audit, the taxpayer lodged superannuation guarantee statements for the relevant periods on 10 June 2013. This meant the statement for the quarter ended 31 December 2010 was over 2 years late. This also meant that the superannuation guarantee charge became payable on 10 June 2013.
The taxpayer objected against the assessments but the Commissioner disallowed the objection. The taxpayer argued the “unfairness” of the “nominal interest component” which was calculated from the entire period from the beginning of the relevant quarter to lodgment date of the statement (ie years removed from the date of contribution). It submitted that the Commissioner could under s 37 of the Superannuation Guarantee (Administration) Act 1992 make “any” alteration to the assessments and sought that the nominal interest component be removed or at least reduced.
The AAT found s 37 does not authorise an amendment to the assessments to remove or reduce the interest component in circumstances where the interest component had been correctly calculated under s 31 of the SGAA. Accordingly, it held the Commissioner’s objection decisions were correct.
(AAT Case [2014] AATA 733, Re The Trustee for Rane Haulage Trust and FCT, AAT, Ref No: 2014/1420, Frost DP, 10 October 2014.)
[FJM Note: the ‘nominal interest charge component’ is designed to replace the fund earnings the employee would have received, had the contributions been made on time. Thus is can rarely be reduced.]
[LTN 199, 15/10/14]