Have you paid all of your SGC (superannuation) for all of your employees for all time?
The ATO has discovered a large problem with employers not paying employees appropriately and as a result SGC has not been paid.
Additionally some employers have not been remitting the correct SGC.
This is treated as theft and as a result it has become a specific area of concern and audit activity from the ATO.
The good news is that in acknowledgment of the problem, on 6 March 2020, the government introduced a Superannuation Guarantee Amnesty allowing employers to disclose and pay their previously unpaid late superannuation.
It is interesting and noteworthy, how far the ATO is allowing employers to go back. You are able to correct errors for superannuation amounts owing for the last 28 years ie quarters starting 1 July 1992 to 31 March 2018.
It would seem to me that the 7 year statute of limitations or the necessity to keep tax records for 5 years would be the only area of concern.
The amnesty provides significant benefits as noted below, and if subsequent discoveries of underpayment are found, presumably through audit activity, the penalty regime is one of the most expensive I have seen. Accordingly, I see this area as a target area for future audit activity. It is also a very simple process to audit. They now have single touch payroll and prior to that “show us your wages records”. When announcing the amnesty, the ATO have announced they will be targeting non-compliance when the amnesty ends. As an action point you should ensure your P&L expense for Superannuation is 9.5% of wages and if not you have an adequate explanation.
If you have any concerns that your SGC treatment may have wavered you should check because the amnesty basically ignores the fact that you are or were late or incorrect and it allows you to fix the problem without major penalties.
Ordinarily, and after the amnesty ends, late payments of SGC are not tax deductible. During this amnesty correction period the SGC WILL BE DEDUCTIBLE.
Interest is payable for the period the debt was outstanding but this is reasonable as it makes up for the employee who has not received the benefit from the investment of the funds.
Employers must register with the ATO now, and have until 7 September 2020 to do so.
The ATO have announced that they will be auditing employers following this amnesty period.
If the ATO identify an employer that should have came forward, but didn’t, they will be made to pay 200% of the SG Shortfall as a penalty, along with the SG Shortfall, Interest, and Admin charge.
On top of this, a tax deduction will be denied.