Amnesty for businesses with unpaid super re-introduced
The Government has recently re-introduced legislation to establish and extend its proposed one-off amnesty to enable employers to self-correct historical underpayments of Super Guarantee (SG).
The amnesty was originally announced by the Government on 24 May 2018 to run until 23 May 2019. However, the legislation lapsed when Parliament was prorogued for the Federal election.
The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 , proposes to enable employers to self-correct historical underpayments of SG amounts without incurring additional penalties that would normally apply. It will apply to SG shortfalls as far back as 1 July 1992, and up until the quarter starting on 1 January 2018 (inclusive).
Although this will give employers some relief they will not be totally off the hook. Employers must still pay all SG shortfall amounts owing to their employees, including the nominal interest and GIC, however will not need to pay the administrative component. The amnesty aims to encourage employers to come forward and pay outstanding SG amounts while giving some reprieve of the penalties usually associated with late payment. Importantly, employers will be able to claim a tax deduction for payments of SG charge or contributions made during the amnesty period.
To qualify for the amnesty, a disclosure must be made to the ATO in the approved form (and must not have been previously disclosed). An employer will lose all benefits from the amnesty if they fail to pay the SG charge on the disclosed shortfall. Employers who do not take advantage of the amnesty will face higher penalties when they are subsequently caught, including a minimum 100% penalty on top of the SG Charge.
The amnesty period will start from 24 May 2018 and run until 6 months after the day the Bill receives Royal Assent.
For assistance handling superannuation for your business please contact your usual Mazars advisor or alternatively:
Brisbane – Nathanael Lee
Melbourne – Michael Jones
Sydney – Dean Newman
+61 7 3218 3900
+61 3 9252 0800
+61 2 9922 1166
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.