SMSF Tax Returns - 2 Good Reasons to Lodge on Time

There are very two very good and compelling reasons for SMSFs to lodge their Tax Returns on time.

The first is that failing to lodge on time is a contravention by the SMSF and can give rise to convictions and financial penalties.  The second is that failing to lodge on time is viewed by the Tax Office as an indicator that the SMSF deserves closer scrutiny.

In a recent speech the Assistant Commissioner within the ATO responsible for SMSFs commented that during 2008/09 there were 219 convictions of SMSFs for failure to lodge their Tax Returns by the due date.  This resulted in fines and costs of $750,000 being imposed.

In particular, one SMSF trustee was convicted and fined:

• $8,500 for three offences of failing to lodge fund Tax Returns for 2004, 2005 and 2006; and
• $9,000 for two offences of failing to provide member contribution statements.

The particular SMSF trustee had no previous convictions and argued that as they had provided the relevant information to the fund’s accountant/tax agent, they had discharged their duty.

As the Assistant Commissioner noted, “the buck stops with the trustees and not the tax agent/accountant”.  The tax agent/accountant’s failure to prepare and lodge the relevant returns is purely a matter between the trustees and agent/accountant.

The important points to note are:

• SMSFs must lodge their Tax Returns by the due date;
• Not lodging Tax Returns or lodging late only invites closer ATO scrutiny;
• SMSFs cannot avoid responsibility by arguing that someone else has let them down.