Excess Contributions: the horrible details emerge

The ATO has recently published data on excess superannuation contributions tax.

The figures are current as at May 2011 and cover excess contributions tax assessments issued in respect of the 2006/07 transitional period and for subsequent financial years up to 2009/10.  The figures for 2009/10 are incomplete.

In summary:

• Over 15,000 assessments were issued in respect of the 2008/09 year for excess concessional contributions – the comparative number for 2007/08 was 18,600.   $72m and $85m were respectively raised by these assessments.
• Over 2,000 assessments were issued in respect of the 2008/09 year for excess non-concessional contributions – the comparative number for 2007/08 was 2,090.   $72m and $75m were respectively raised by these assessments.
• About 400 assessments were issued in respect of the 2008/09 year for assessments which involved both excess concessional and excess non-concessional contributions – the comparative figure for 2007/08 was about 440.  $19m and $17.5m were raised by these assessments.
• Over 1,800 assessments were issued in respect of the transition period before 1 July 2007 for excess non-concessional contributions.  $53.4m was raised by these assessments.

The figures so far released for 2009/10 are too incomplete to make any meaningful comparisons with earlier years.

The data also provides the average and median tax liabilities raised by the excess contributions tax assessments.

In summary:

• Excess concessional assessments for 2008/09 were $4,822 (average) and $1,993 (median); the comparative figures for 2007/08 were about the same.Excess non-concessional assessments for 2008/09 were $35,562 (average) and $17,623 (median); the comparative figures for 2007/08 were $35,902 (average) and $11,625 (median).
• Excess concessional and non-concessional assessments for 2008/09 were $48,081 (average) and $6,913 (median); the comparative figures for 2007/08 were $39,682 (average) and $11,625 (median).
• Excess non-concessional assessments in the transitional period up to 1 July 2007 were $29,292 (average) and $9,300 (median).

The significant divergence between the average and median figures suggests that there were some very large assessments issued, particularly for assessments involving both concessional and non-concessional contributions.

The data is unpleasant reading as it shows the success rate for taxpayers who have applied to the ATO to disregard or reallocate excess contributions.  The success rate is trending downwards from 21% (applications relating to the transitional period before 1 July 2007), 17% (in respect of 2007/08) and 6% (in respect of 2008/09).

Finally the data shows that about $400m in excess contributions tax has been collected up to the 2008/09 year.