The future of SMSF services
With the advent of single touch payroll (STP), the Australian Taxation Office (ATO) is working with live data and has more visibility than ever when it comes to superannuation information.
The employer reports superannuation guarantee (SG) obligations and then the ATO can data match that information via the Member Account Transaction Service (MATS).
That's all good and well when the employer's contributions are being made to large industry/retail super funds. Because the MATS is a reporting obligation that these super funds are obliged to abide by. That is, frequent reporting.
This is not the case when the superannuation payments are being made to an SMSF. The result is that the ATO are aware that the employer is making the payment, but, they cannot data match this to any other source of information regarding the SMSF receiving that contribution.
Possibly then, the result is that employers will be unnecessarily drawing the attention of the ATO who are operating on the assumption that the employer has not paid the required amount of SG on time.
The current state of play is surely not sustainable.
Let's also consider the following data for a moment;
There are close to 600,000 SMSFs as at the end of the June 2019 quarter and they are representing 1,125,201 members.
Employers contributed an estimated $5.7 billion to SMSF's in the 2018 financial year.
Taking all the above into consideration;
SMSF's are already expected to report to the ATO the commencement and commutations of pensions. How long then will it be before SMSF's are expected to report on a regular basis for contributions?
How will this affect the current Accounting industry and their business models of preparing the income tax returns for SMSF's on an annual basis?
Clearly, those businesses who are already administering their SMSF clients on a regular (at least quarterly) basis will stand to benefit the most when the SMSF industry will ultimately be forced into regular reporting of superannuation payments that it has received. They are already one step ahead of the competition.
This is the future; regular administration of SMSFs using the most clever software solutions.