Speaking at the SPAA National Conference on 21 February 2014, Acting ATO Second Commissioner Alison Lendon said the SMSF sector was in “good shape” but noted there was a small minority of funds and professionals that do the wrong thing. Some emerging areas of concern were noted – these included:
- illegal early release;
- fraud;
- not reporting correctly non-arm’s length income (NALI);
- not setting up correctly limited recourse borrowing arrangements; and
- late SMSF annual return lodgments.
The Acting ATO Second Commissioner said last year the ATO removed from Super Fund Lookup the details of funds with 2 or more years’ returns overdue. The ATO issued letters to those SMSFs (22,880) and 13% have lodged their 2012 and/or 2013 returns.
ATO concerns with 7,000 Approved SMSF Auditors
The Acting ATO Second Commissioner also revealed some figures in relation to SMSF auditors which she said give the ATO some things to focus its compliance activities on. The ATO knows there are just over 7,000 approved SMSF auditors.
- Of them 6,162 are also tax agents, which could create independence risks.
- About 3,000 audit fewer than 20 SMSFs annually creating a risk of not being up to date.
- Also, over 1,900 have previously been contacted by the ATO regarding their approved auditor performance.
ATO expands P2P to those who audit over 100 funds a year
The Acting ATO Second Commissioner also announced at the conference that the ATO will expand its SMSF ‘Professional to Professional’ email support service to all SMSF auditors who do over 100 audits a year. [FJM Note: the ATO might be better placed to open up its ‘P2P’ support to all approved auditors – particularly those they are worried about not being up to date enough.)
She indicated that the ATO may also release a new app for mobile devices to support SMSFs. “From time to time there’ll be new releases with updated or new functions, including perhaps some things for SMSFs. Stay tuned,” she said.
[LTN 36, 24/2/14]