With the SG amnesty ending on 7 September, time is running out for employers to declare any outstanding super or potential non-compliance with their SG obligations, before much tougher penalties apply.
Once the SG amnesty period ends, law firm Basin Clarke Priest said the ATO will automatically impose the Part 7 penalty at a rate of 200 per cent, then follow the four-step remission process (see below) to determine whether it is appropriate to reduce the penalty imposed.
Source: Basin Clarke Priest
According to Basin Clarke Priest tax director Kirsty McDonnell, the ATO has made it clear that employers who fail to voluntarily disclose their SGC liability will be disqualified from the amnesty and be subject to the Part 7 penalty.
Further, given the ATO has stated that remissions will be given in very limited circumstances, she said it is imperative that employers are aware of, and disclose, any SG liabilities before the SG amnesty deadline.
“The ATO has been consistently clear that penalties will not be reduced for employers who fail to come forward prior to 7 September,” Ms McDonnell said.
“The fact that many businesses are experiencing a high level of disruption this year due to the impact of COVID-19 is not, in itself, justification enough to miss this deadline.”
Ms McDonnell also noted that the Part 7 penalty, recently outlined by the ATO, is a penalty on the employer for not promptly disclosing to the commissioner where they have an SG shortfall; it is not a penalty for failing to meet their SG obligations.
“It’s essential that employers understand that the Part 7 penalty will not apply to eligible disclosures made within the SG amnesty period,” Ms McDonnell said.
“Therefore, if employers want to avoid facing penalties of 200 per cent of the SGC amount, they need to declare any SG liability issues now.”