Self-managed super funds that are failing to lodge their tax returns with the ATO (and therefore become an invalid SMSF) are not able to receive employer contributions.
This can have a major effect on you, as an employer, when you try to contribute your quarterly superannuation contributions to the SMSF. In practical terms it can affect the whole batch payment created to pay the quarterly contributions for all your employees. If the batch payment is reversed it can take a few days for this to happen and then you have to create another batch, which may mean you are then late for the deadline.
To avoid being late paying super contributions, we would suggest that, before processing a batch payment, you:
- Check ABN status of SMSF’s in the ATO Super Fund Lookup website https://superfundlookup.gov.au/
- If under their status it is showing – “Regulation details removed” – that means that they failed to lodge their tax returns and payments cannot be made to that fund.
- Process all other employees (leave the self-managed super funds with issues out of this batch payment)
- Ask the employee(s) to either update their SMSF status with the ATO or provide you with alternative fund details
- Run the individual transfer to the SMSF separately
- If you want practical help to action the two stage batch transfer don’t hesitate to contact our bookkeeping team to explain.
If you have any questions, please let me know.