CURRENT AS AT 14 December 2018
The Superannuation Guarantee Amnesty legislation has failed to pass through the Senate. The law cannot be considered again until next year and with the Federal Opposition opposed to the Amnesty, the fate of the legislation is unknown, with significant doubt now as to whether it will be passed.
The Amnesty was to be available for the 12-month period from 24 May 2018 to 23 May 2019. Employers during this 12-month period needed to voluntarily disclose any past Superannuation Guarantee underpayments, in order to access the benefits of the Amnesty.
Under current law, SG Charge paid to the Australian Taxation Office (ATO) is not deductible, and late contributions that an employer has made to an employee’s superannuation fund, and has elected to offset against their SG Charge liability, are also not deductible.
If the Amnesty is passed the benefits to an employer would be:
- All catch-up payments that you make during the 12-month Amnesty period will be tax deductible.
- The administration component of the Superannuation Guarantee Charge (SGG) is not payable ($20 per employee, per quarter, per SG Shortfall)
- Part 7 penalties will not be applied. Potentially up to 200% of the SG Charge that is payable (the SG Charge includes the SG Shortfall that you owe to employees).
Given the uncertainty of the proposed law being passed we suggest you hold off making any disclosures in relation to the Amnesty until the legislation actually becomes law.
Notwithstanding the Amnesty, all employers should remain mindful of their obligations under current law and take all actions necessary to keep their Superannuation Guarantee affairs in order.
Superannuation Guarantee is increasingly being targeted by the ATO, and with ever increasing data matching capabilities, employers not meeting their obligations are more likely to attract ATO scrutiny.
If you have any queries please contact your client manager.
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