As of 10 March 2020:
- Royal Assent granted 10 March. It is now law
- Amnesty applies until 7 September 2020. 100% penalty thereafter. No discretion.
- We strongly recommend a full review of any late payments and that a form be lodged for any individual quarter that has a late payment
- It is first about lodging forms, it is then about paying.
- Late super payments will be deductible if paid before 7 September.
- Payment Plans can be for longer periods but any payments after 7 September are not deductible.
- There is a 6 month window in which to notify the ATO and pay outstanding SG.
* The amnesty relates to SG that is outstanding for periods up to the March 2018 quarter.
ATO information - ATO Amnesty webpage
SG Amnesty during the COVID-19
It is very unlikely that the SG Amnesty period will be extended.
This does not remove the benefits of having any applicable employers catch up their declarations of outstanding SG.
If they lodge the SG Amnesty forms and enter a payment plan then No penalties and No admin fee ($20 per employee per quarter).
If they don’t and get caught later then SG to be paid, at least 100% of the SG as a penalty and the admin fee.
Payment plans may be able to be entered with a delayed start date ie after the COVID-19 period.
The impact of COVID-19 and the amnesty is that many businesses will not be able to pay the SG without a deferred payment plan and therefore will lose tax deductibility
In Short: Ensure your businesses consider getting this done during the amnesty period until 7th September.
SG is normally
- 9.5% of OTE (Ordinary Time Earnings)
- Paid quarterly
- Into members account of the superfund by 28 day following the quarter
- Accrued by employers and reported through STP
- Payments are reported to the ATO by the Superfunds
SGC (SG Charge) is normally
- 9.5% of Salary & Wages (ie includes overtime etc)
- Interest 10% - which is allocated to the employee
- Admin fee $20 per quarter, per employee paid to ATO
- Not deductible
- GIC on unpaid SGC, after the form is lodged – also allocated to the employee
- Penalties Part 7 up to 200%
Why should I use the Amnesty to get this right?
- You’ll get a tax deduction
- No Admin Fee (Normally $20 per quarter per employee)
- No Part 7 Penalty
- It is a requirement to pay the Super
- Government now have visibility of whether you have accrued and paid and will commence strict compliance action after the Amnesty period
- If you wait
- Minimum 100% penalty
- No tax deduction for any of the amount
Amnesty relates to SG due for periods up to March 2018 quarter and was due before 24 May 2018
- Any SGC from 1992 until the March 2018 quarter
- Only SGC disclosures made since 24 May 2018
- Any SGC forms that have been lodged since the 24th May will have the amnesty provisions applied by the ATO
- During the Amnesty period it must be lodged on the Amnesty Approved Form
- Deductible if PAID during the amnesty period
- No admin fee
- No part 7 penalties
- SGC & Interest still to be paid
- Any historic amounts of SGC (9.5% of salary & wages)
- Only if the employer makes this Voluntary disclosure before any ATO action
How to Claim the Amnesty
- You MUST use the ATO provided excel form and lodge it via online services or Business Portal
- You MUST NOT use the SGC Calculator on the Business Portal
- You cannot lodge the pdf that is produced by the ATO online SGC calculator
Amnesty cancelled if
- Employer doesn’t pay
- Not entered a payment arrangement
- Failed to comply with any arrangements (ie default on payment plan re SG Amnesty amounts)
- Minimum penalty of 100% for pre may 2018 undisclosed SGC, unless exceptional circumstances (don’t hold your breath)
- May pay Amnesty amounts direct to the employees superannuation account and offset on the form. These payments must be paid to the funds, before the SGC form is lodged with the ATO and any such payment entered in the late payment offset field and not paid to the ATO again.
- May pay to the ATO using the correct SG PRN. (Super Guarantee Payment Reference Number for the Client)
- May set up a payment plan with the ATO. (Only payments made during the amnesty are deductible. Payments according to a payment plan after the amnesty are NOT deductible.)
- May already have other payment plans for SG or other and this DOES NOT affect the establishment of an SG Amnesty payment plan.
- If payments are made during the amnesty period.
- Payment plan amounts paid after the amnesty period are not deductible.
- Removed during the amnesty for pre May 2018 SG amounts.
- 100% minimum penalties for pre May 2018 SG amounts that are NOT disclosed during the Amnesty.
- SG amounts for the June 2018 quarter and following are subject to penalties of up to 200% but with no minimum.
- You must use the Amnesty form for amounts up to March 2018 quarter.
- You would then use Non-amnesty forms for June 2018 and following.
- Lodge forms at least 14 days before end of the Amnesty 6 month period.
- Forms lodged since 24 May 2018 and before now should have the amnesty applied ie no penalties and no administration fee. You may need to review.
Employee Concessional Cap
- Amnesty amounts allocated to employees will be excluded from the “low tax contributed amounts”
- Amounts may be allocated to other financial years
- ATO should automatically adjust
- Tax agents or clients may need to liaise with ATO if Excess Concessional Cap tax is applied
In 2017 the SG gap was $2.3b or a deficit of 4% of the total expected.
Government policy is that SG must be paid.
Government are providing an incentive for employers to bring their SG obligations into line.
SG Compliance will be enhanced following the Amnesty period.
What to do now?
- Understand all things SG and SGC:
- Review ICB procedure notes and resources
- Engage the client in recognition of the Amnesty - Business Information Sheet pending
- Review all records for SG especially unpaid quarters
- Obtain the relevant SG calculation spreadsheet from the ATO (Amnesty version or the normal version)
- Complete the amnesty spreadsheet for each of the March 2018 quarter and prior where there is an obligation:
- This period is subject to the Amnesty
- The Amnesty spreadsheet will not charge the admin fee, noting interest still applies
- This form must be lodged before 7th September 2020
- Lodge and pay for this period.
- Complete the normal spreadsheet for each of the June 2018 quarter and up to December 2019 quarter where there is an obligation:
- This period is not subject to the Amnesty
- Admin fees and interest will be calculated by the spreadsheet
- This form must be lodged anyway
- Lodge and pay for this period.
- When completed Lodge all forms (a unique spreadsheet for each quarter). How to Lodge and Pay Super Guarantee Charge
- Arrange payment plan if necessary.
Amnesty Law Resources