Publication date: 02 Sep 20 |
Source: THE TAX INSTITUTE
SYDNEY, 2 September 2020: With the superannuation guarantee amnesty deadline looming fast, businesses are still hoping for a much-needed extension to the amnesty, said The Tax Institute.
The superannuation guarantee amnesty allows employers to self-correct historical superannuation guarantee shortfalls for the period from 1 July 1992 to 31 March 2018 without harsh penalties being applied.
The Tax Institute, together with the other professional bodies, has strongly advocated for an extension of the amnesty.
“The Tax Institute has repeatedly called for a six-month extension of the deadline, to 7 March 2021. The amnesty became law on 6 March 2020 but the additional six months in which employers could come forward has unfortunately coincided with the impact of the COVID-19 pandemic. Given the adverse impacts caused by COVID-19, it seems illogical and unreasonable to maintain the 7 September 2020 deadline. We urge the Government to allow employers more time to come forward,” said Senior Advocate Robyn Jacobson, CTA.
The Tax Institute has highlighted the point that many businesses are under significant pressure due to managing JobKeeper payments, adapting to working from home arrangements, dealing with staff downsizing and other challenging issues arising as a result of COVID-19. Accountants and advisers have been under enormous pressure to help deliver the government’s JobKeeper and Cash Flow Boost assistance to their clients which has pushed work on the amnesty to one side.
“The current Stage 4 restrictions in Victoria highlight the issues with the deadline. The restrictions are preventing the collection and sharing of physical payroll records which are typically archived at currently inaccessible offices or off-site third-party storage areas. Without such records, it is impossible for some employers to determine whether there are any shortfalls as far back as 1992 and therefore a need to claim the amnesty,” said Robyn.
Determining superannuation guarantee shortfalls is a complex and time consuming task. Qualified personnel are needed to identify and calculate historical superannuation shortfalls. Determining when an employer has an obligation to pay super often requires professional expertise as SGC extends beyond the usual employment arrangements to include certain contractors and other workers.
The Tax Institute has also strongly advocated for changes to the penalty regime in relation to the superannuation guarantee system.
“These draconian penalties have the effect of actively discouraging employers to come forward as the consequences can be horrendous. An employer who pays just one day late is treated the same as an employer who never pays super. This is why the amnesty has been so desperately needed,” said Robyn.
“The fact that the penalties for non-compliance with the superannuation guarantee system are so onerous they can place an employer in an insolvent position forcing a liquidation, administration or bankruptcy is reason enough to allow more time to apply for the amnesty. We should be assisting businesses to get back on their feet rather than pushing them towards collapse.”
For more information, please contact:
Kelly Emmerton – Media Contact, The Tax Institute
email@example.com 02 8223 0029
The Tax Institute is the leading forum for the tax community in Australia. Our reach includes membership of 12,000 tax professionals from commerce and industry, academia, government and public practice and 40,000 Australian business leaders, government employees and students. We are committed to representing our members, shaping the future of the tax profession and continuous improvement of the tax system for the benefit of all, through the advancement of knowledge, member support and advocacy. Read more at taxinstitute.com.au