Self Correct Your Super Or Suffer….

Self Correct Your Super Or Suffer….

Find out what the Super Guarantee Amnesty means for you.

After the original amnesty failed to pass parliament in May 2018 the government have reintroduced legislation to establish a one-off amnesty for historical underpayments of the superannuation guarantee.

If enacted this will apply from the date of the original amnesty announcement, 24 May 2018 until 6 months after the legislation has passed. This will give employers time to disclose of these super guarantees to the commissioner of taxation including historical underpaid or unpaid for any period to the March 2018 quarter.

To qualify for the amnesty, employers must voluntarily make this disclosure and either pay the full amount owing or arrange a payment plan in which all payments are met otherwise the amnesty will no longer apply.

The ATO continue its compliance activities during the amnesty period and if they make the discovery first, full penalties will apply. The amnesty will also not apply to amounts already identified as owing in which the employer is subject to an ATO audit.

What employers pay for failing to meet SG obligations

No AmnestyAmnesty
SGC comprised of:SGC Comprised of:
- The outstanding SG entitlements (this component might be higher than what it would have been had the entitlements been paid on time)- The outstanding SG enititlements
- Interest of 10% per annum- Interest of 10% per annum
- An administration fee of $20 for each employee with a shortfall per quarter- No administration fees
Penalties of up to 200% of the amount of the underlying SG charge (minimum 100% for quarters covered by the amnesty)No penalties
A general interest charge of the SBC or penalties are not paid by the due dateA general interest charge
SGC amount is not deductible - even if you pay the outstanding amountA general interest charge

So, what do employers need to pay under the amnesty?

Under normal circumstances employers pay the super guarantee charge and lodge a superannuation guarantee statement. However, under the quarterly superannuation guarantee, the interest is calculated on an employer’s quarterly shortfall amount from the first day of the relevant quarter to the date when the super guarantee charge would be. If the superannuation guarantee is paid late, special provisions exist within the legislation to automatically protect employees from inadvertently breaching concessional contribution cap limits if the unpaid superannuation guarantee is paid to the Commissioner and then transferred to the employee’s superannuation fund. In the case an employer makes the payment directly into the employee’s fund, the individual would need to apply to the Commissioner requesting the exercise of discretion to either disregard the concessional contributions or allocate them to another financial year.

But what happens if you don’t take advantage of this amnesty?

If you are found to have underpaid employee’s superannuation guarantee penalties up to 200% apply. With the amnesty-imposed legislation however calls for tougher penalties on employers that do not voluntarily correct underpaid or unpaid. The Commissioner therefore loses the power for leniency even in cases where an employer has made a genuine mistake.

So what does that mean for you?

Regardless of if you do not believe that your business has an Super Guarantee underpayment issue, it is worth undertaking a payroll audit to ensure that your payroll calculations are correct, and employees are being paid at a rate that is consistent with their entitlements under workplace laws and awards.

With the introduction of single touch payroll there is going to be a lot more transparency on super and non-compliance with the ATO now able to capture more recent non-payments.

If  you need a super health check get in touch with our accounting team to see how we can help you avoid these penalties and stay on track , you can call us direct on 02 9415 1511 or contact us.

 

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Thinking About Topping Up Your Super This Financial Year?

Thinking About Topping Up Your Super This Financial Year?

With the end of financial year fast approaching, it’s important to plan ahead to ensure you’re aware of key processing cut-off times that apply to your investment and superannuation platform accounts.

All reasonable efforts will be made to process your request before 30 June 2019 providing the request is complete and valid. However, if you are considering make a superannuation contribution (pre or post tax) you should be aware that estimated cut of times start as early as Friday 14th June. The cut-off times and dates are a guide and are subject to change depending on volumes and the turnaround times.

Please take this into account as you plan for the EOFY as platforms are unable to backdate transactions.

If you have any questions contact your Financial Advisor to begin the process as soon as possible.

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Meet The Super Stars of our Super Team

Meet The Super Stars of our Super Team

Recently we’ve had some changes to our team in our growing SMSF division.   We’re very excited to welcome Sadi Islam to PrimeAdvisory as our SMSF Manager, replacing Hugo Furzer.   Sadi joins the team at our Sydney office and has significant experience in SMSF management.

Sadi Islam, Prime Advisory SMSF Manager
Sadi Islam, Prime Advisory SMSF Manager

Sadi holds a Bachelor’s Degree in Finance and Accounting and a Master’s Degree in Professional Accounting. Sadi is also a member of the SMSF Association and joins our other SMSF Association members and SMSF experts: Guy Wall, Christian Borkowski, Ben Norval, Angus Rodgers, and Chathuri Nanayakkara.

Prior to joining PrimeAdvisory, Sadi has worked at a number of specialist Superannuation Accounting firms and has been responsible for the management, workflow and client relationships of over 750 individual SMSF funds.

Sadi is excited about the role at PrimeAdvisory and in particular working in a well-resourced, professional environment with the added benefit of an in-house financial advisory team.

Sadi is already receiving glowing praise from our clients.

 “Thanks for sending through the final accounts and tax returns. We have really appreciated your professionalism, advice and responsiveness during the preparation of the accounts and tax return.”

Paul, PrimeAdvisory SMSF client

At PrimeAdvisory we have extensive experience and expertise in the growing sector of Self-Managed Superannuation Funds (SMSF).

The Prime Advisory SMSF Team
The PrimeAdvisory SMSF Team: (L to R) Christian Borkowski, Angus Rodgers, Chathuri Nanayakkara, Sadi Islam, Guy Wall, Ben Norval,

Recently the ATO released their Self-Managed Super Fund quarterly statistical report to December 2018. The report’s key statistics highlight why there’s a growing need for experts:

  • The total number of SMSFs in Australia is now 597,009
  • The total number of members in SMSFs is now 1,127,304
  • The total estimated SMSF assets is now $726 billion
  • The top asset types held by SMSFs, by value, are listed shares and cash and term deposits, making up 28% and 24% of total estimated SMSF assets, respectively.

At PrimeAdvisory we know how important it is to be able to offer sound advice and strong experience around SMSF.

If you would like to find out more about services for Self-Managed Super Funds or discuss your own SMSF please contact us.

 

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The Major Parties’ Superannuation and Tax Policies

The Major Parties’ Superannuation and Tax Policies

The federal election has been called for May 18 and both major parties have outlined their superannuation and tax policies. With the federal election only weeks away many of our clients have been asking what the major political parties’ policies are that may impact their SMSF, individual taxation circumstances or personal investments.

If you would like more information on a particular policy announcement, please do not hesitate to contact our office to set up a time to discuss any requirements you may have.

Liberal-National Coalition

Superannuation
  • Australians aged 65 and 66 will be able to make voluntary superannuation contributions without needing to work a minimum amount. Previously, this was only available to individuals below 65.
  • Extending access to the bring-forward arrangements (the ability to make three years of post-tax contributions in a single year) to individuals aged 65 and 66.
  • Increasing the age limit for individuals to receive spouse contributions from 69 to 74.
  • Reducing red-tape for how SMSFs claim tax deductions for earnings on assets supporting superannuation pensions.
  • Delaying the implementation of SuperStream (electronic rollovers for SMSFs and superannuation funds) until March 2021 to allow for greater usability.
Taxation
  • From 2018-19 taxpayers earning between $48,000 and $90,000 will receive $1,080 as a low and middle income tax offset. Individuals earning below $37,000 will receive a base amount of $255 with the offset increasing at a rate of 7.5 cents per dollar for those earning $37,000-$48,000 to a maximum offset of $1,080.
  • Stage 1 tax cuts: From July 1 2018, increasing the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.
  • Stage 2 tax cuts: From 1 July 2022, increasing the top threshold of the 19 per cent personal income tax bracket from $41,000, to $45,000.
  • Stage 3 tax cuts: From 1 July 2024, reducing the 32.5 per cent marginal tax rate to 30 per cent which applies from $120,000 to $200,000. The 37 per cent tax bracket will be abolished.

Australian Labor Party

Superannuation
  • Disallowing refunds of excess franking credits from 1 July 2019 – this would mean SMSF members in pension phase no longer receive refunds for the franking credits they receive for their Australian share investments.
  • Banning new limited recourse borrowing arrangements.
  • Reducing the post-tax contributions cap to $75,000 per year down from $100,000.
  • Ending the ability to make catch-up concessional contributions for unused cap amounts in the previous five years.
  • Ending the ability for individuals to make personal superannuation tax deductible contributions unless less than 10 per cent of their income is from salaries.
  • Lowering the higher income 30per cent super contribution tax threshold from $250,000 to $200,000.
Taxation
  • Labor supports the stage 1 tax cuts and will match the $1,080 low and middle income tax offset. From 1 July 2018, individuals earning below $37,000, will get a $350 a year tax offset, with this amount increasing for those earning between $37,000- $48,000 to the maximum $1,080 offset.
  • Introduce a 30 per cent tax rate for discretionary trust distributions to people over the age of 18.
  • Will limit negative gearing to newly built housing from January 1 2020. (Existing investments are grandfathered under the current law)
  • Reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent. (Existing investments are grandfathered under the current law)
  • Limit the deductions for the cost of managing tax affairs to $3,000.

How can we help?

If you have any questions or would like further clarification in regards to how the above policies may affect you and your fund, please contact us.

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What Women Need To Consider When It Comes To Super

What Women Need To Consider When It Comes To Super

Today we celebrate International Women’s Day and with this year’s campaign theme #BalanceforBetter – better the balance, better the world; what a great time to start working on maximising your super.

Whilst we are working towards correcting the balance between the genders, unfortunately, on average, women have much lower super balances.

Three key reasons why;

  • On average women earn less than men.
  • Women are more likely than men to take a career break to raise their children.
  • Some women choose to return to work on a part-time basis until their children are older.

All this results in lower contributions and will have a greater impact on their super balance.

What can you do to maximise your super?

There are several steps you can take to start planning.

1. Get Super Smart

Understand where all your super is, how much super you have, what investments you are in, what fees you are paying and what insurances you have through your super fund and if they are adequate.

2. Look at growing your contributions

You can ask your employer to pay part of your pre-tax salary into super, this can be a very tax effective way of growing your super. You can also make further contributions out of your own pocket – also known as after-tax super contributions.

3. Spouse Contribution

Your partner may be able to assist you in boosting your super balance by either spouse contributions or contribution splitting.

4. Get help from a professional

Financial planning can be complex and overwhelming at times. At PrimeAdvisory we will work with you to give a better understanding of your options and get you on track to maximize your super balance for retirement.

A super story:

“PrimeAdvisory were really good at helping me get organised. I had 6 super funds, which were all over the place. They helped me get it sorted out so our net asset position was understood. It helped me know my total asset position and how much wealth we had. At 53, it was important to see a pathway to retirement, how we will fund it and maintain our lifestyle. Having an independent source to facilitate a discussion around finances with my husband also helped bring out the differences between our ambitions and what we want to do in retirement, lifestyle-wise. Working with Guy helps us have those conversations.”Carolyn, 54, Financial Services Executive

To start a conversation about getting on track and planning for retirement contact us today on (02) 9415 1511.

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