Due to Covid-19, there was an amnesty period for businesses to comply and voluntarily disclose their unpaid super via SGC (Super Guarantee Charge) without incurring the administrative penalty or administration component, and to claim a tax deduction for the Superannuation Guarantee Charge (SGC) amounts paid. The Superannuation Guarantee (SG) Amnesty closed on Monday 7 September 2020. Business owners should have received letters from ATO if they were having unpaid super without lodging SGC by that time. Business owners, directors and volunteer directors of NFPs should pay attention to the key dates below:
Understandably, your business might have a cash flow issue during Covid-19, so if you have missed the first payment deadline, please do not miss the SGC deadline, which is exactly 1 month after the first payment deadline. If you are uncertain of how to fill an SGC form, please seek advice from your accountants or bookkeepers.
Please be aware that once you submit your SGC form, ATO will send you a statement that outlines the super owing amounts. It means that ATO has distributed super payments to your staff super funds. You will be required to clear your SGC debts with the ATO. Referring back to Part 1 in which I explained the consequences of having missed $10,000 for 2 quarterly super payments would turn into a $33,850 liability.
Don't forget the severity of the Part 7 penalty alone can drive businesses to insolvency, and directors’ personal liability is a further risk, especially when you don’t have a good financial system or governance!
My tips to stay in compliance:
- Consider super obligations as important as staff salary payments;
- Include SGC as a part of your compliance process, saving the key dates;
- Make an informed decision between a business loan cost vs. the heavy penalty of unpaid super;
There are special circumstances that ATO may consider to reduce the penalty rate from 200%. These circumstances could be:
- Health & mental incapable (death or serious illness);
- Unprecedented situation (can’t access financial records due to bushfire); Loss of files due to cyber-attack;
- Having a good compliance history.
If you would like further information or to discuss your circumstances, please contact Tailored Accounts. We will assist with providing advice on your circumstances and any potential liability; representing your business with the ATO to make a voluntary disclosure.