On March 6 2020 the government introduced a superannuation guarantee (SG) amnesty (the amnesty). The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 penalty.
In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible. (Currently if you do not pay on time – 28 days after the end of each quarter these payments are not tax deductible)
Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again as ATO will review and apply concession if applicable.
Employers who come forward from 6 March 2020 need to apply for the amnesty.
The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If the ATO identify these employers before they come forward, they will not be eligible for the benefits of the amnesty. They will also be required to pay:
- SG shortfall
- nominal interest (10%)
- administration component ($20 per employee per quarter)
- Part 7 penalty (up to 200% of the SGC).
In addition, payments of the SGC won’t be tax deductible.
Eligibility for the amnesty
To be eligible for the amnesty you must meet and fulfil all the following criteria. You must:
- have not been informed the ATO is examining or intends to examine your SG obligation for the quarter(s) your disclosure relates to
- disclose an SG shortfall for an employee that you haven’t already disclosed to us (or disclose additional amounts of SG shortfall for a quarter previously disclosed)
- disclose for quarter(s) starting from 1 July 1992 to 31 March 2018.
- lodge your completed SG amnesty form with the ATO so we receive it no later than 7 September 2020.
Note: You will also need to pay the amount owing to the ATO or set up a payment plan after you lodge the SG amnesty form. You need to do this to avoid being disqualified and losing the benefits of the amnesty.
COVID-19 effects and the Amnesty
The ATO understand you may wish to apply for the superannuation guarantee amnesty (the amnesty) and may be concerned that, as a result of COVID-19, your circumstances may change and you will not be able to pay the liability.
The ATO will work with you to establish a payment plan that is flexible to help you to continue making payments. These arrangements include:
- flexible payment terms and amounts which we will adjust if your circumstances change
- the ability to extend the payment plan to beyond 7 September 2020, the end of the amnesty period. However, only payments made by 7 September 2020 will be deductible.
If, after The ATO work with you, and you are unable to maintain payments, the law requires The ATO to disqualify you from the amnesty and remove the amnesty benefits. However:
- the disqualification will only apply to any unpaid quarters
- The ATO will advise you which quarters are unpaid – for these quarters The ATO will re-apply the administration component of $20 per employee included in the disqualified quarter
- The ATO will also take your circumstances into account when deciding whether a Part 7 penalty should be applied to your disclosure – a review of your circumstances may result in the Part 7 penalty being reduced to nil.
For a full breakdown of the SG amnesty please visit the Australian Taxation Office website or if you would like us to do it on your behalf please contact Nick or Richard and we will let you know the steps to follow
