SUPER GUARANTEE AMNESTY SCHEME | ATO chasing outstanding liabilities

The Superannuation Guarantee Amnesty Scheme closed on the 7 September 2020. The scheme, introduced on the 6 March 2020 allowed employers to disclose to the ATO and promptly pay, any previously unpaid superannuation guarantee charges (SGC) owed to their employees (including nominal interest) if it related to the period 1July 1992 to 31 March 2018.

The amnesty of the scheme meant that disclosing employers were not liable for the ATO fines and penalties usually associated with the late payment of SGC. These penalties can be as high as 200% of the primary SGC payable. It also allowed for a deduction for any amnesty payments made by an employer during the period 24 May 2018 to 7 September 2020.

With the closure of the amnesty scheme, the ATO has begun to turn its attention to those who had qualified for amnesty, but failed to make payment or enter into a payment arrangement by the due date set by the amnesty agreement.

If an employer worked with the ATO to achieve an amnesty disclosure, but were unable to maintain the payments, the law requires the ATO to disqualify them. Disqualification results in the removal of all benefits of the amnesty scheme, meaning a full assessment will be issued, including pecuniary penalties. Further, payments to the assessed liability will no longer constitute an allowable deduction.

The ATO has begun issuing warning letters to employers who still have outstanding liabilities on their amnesty disclosures. The warning letter provides 21 days from the date of issue to make payment or enter into a payment arrangement. It is important those employers with outstanding amnesty liabilities do not wait for this warning letter before acting as if disqualified payments towards the liability are no longer deductible and the potential penalties imposed could be as high as 200% of the outstanding SGC payable.

Want to know more?

If you have any questions with regards to the superannuation guarantee amnesty scheme, please contact Michael Craig, our Business Advisory Director, for assistance.

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