On 6 March 2020, the government passed the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 as law.
This bill provided a one-off amnesty to encourage employers to correct their Superannuation Guarantee obligations dating from 1 July 1992 to 31 March 2018.
The amnesty period will now run from 24 May 2018 to 7 September 2020, which means employers now have just under six months to disclose, lodge and pay any superannuation guarantee shortfalls for their employees. The exception to this is where shortfalls have been previously disclosed to the ATO or a part of a previous or current ATO audit.
The ATO have also advised that employers will be allowed to claim tax deductions and will not incur any administration costs or penalties in relation to shortfall amounts during the amnesty period. It is important to note however that nominal and general interest charges will apply to outstanding shortfall amounts.
Amounts paid as part of a payment arrangement for shortfall amounts will also be available for a tax deduction, but this is limited to payments made before 11:59pm on 7 September 2020.
Failure to take advantage of the amnesty and disclose shortfalls by 7 September 2020, may result in the employer being subject to penalties of up to 200% of the shortfall amounts.
However, before you go raising your hand or waving your white flag with the ATO, there is a process by which you have to report and lodge your shortfall amounts. Therefore, it’s important that you get in touch with us so we can guide your through the process to ensure a successful outcome.