The legislated SG amnesty gives a one-off amnesty to employers, offering them an opportunity to get up to date with outstanding super payments to current and past employees, without being slugged with the harsh penalties that usually apply.
This applies to the superannuation guarantee amnesty legislation passed from 1 July 1992 to 31 March 2018.
According to Kirsty McDonnell, tax director at Baskin Clarke Priest, the ATO has made it clear that employers who fail to voluntarily disclose their SGC liability will be disqualified from the amnesty and be subject to the Part 7 penalty.
“The ATO has been consistently clear that penalties will not be reduced for employers who fail to come forward prior to 7 September,” said Ms McDonnell.
“The fact that many businesses are experiencing a high level of disruption this year due to the impact of COVID-19 is not in itself, justification enough to miss this deadline.”
The Part 7 penalty, recently outlined by the ATO, is a penalty on the employer for not promptly disclosing to the commissioner where they have an SG shortfall, it is not a penalty for failing to meet their SG obligations.
“It’s essential that employers understand that the Part 7 penalty will not apply to eligible disclosures made within the SG amnesty period,” said Ms McDonnell.
“Therefore if employers want to avoid facing penalties of 200 per cent of the SGC amount, they need to declare any SG liability issues now.”
Ms McDonnell clarified that once the SG amnesty period ends, the ATO will automatically impose the Part 7 penalty at a rate of 200 per cent, then follow the four-step remission process to determine whether it is appropriate to reduce the penalty imposed.
Earlier this year, the Institute of Public Accountants (IPA) applauded the arrival of the SG amnesty, having advocated for it for some time.
“The IPA has long advocated for this one-off amnesty, which allows employers to clean the slate by paying historical SG underpayments,” said IPA chief executive Andrew Conway.
Mr Conway acknowledged that small businesses can sometimes experience cash flow issues, making them vulnerable when it comes to meeting their SG obligations by the required due date.
“This amnesty gives them time to atone,” he said.
