The Bill containing the one-off superannuation guarantee (SG) amnesty has finally passed through Parliament!
The amnesty only relates to SG liabilities arising in relation to quarters up to the March 2018 quarter.
In broad terms, the SG amnesty allows:
- Tax deductibility – employers to claim tax deductions for payments of SG charge (SGC) amounts made during the amnesty period (from 24 May 2018 until 7 September 2020). Ordinarily no deductions can be claimed for late payments of SGC.
- No administration fees or penalties – employers will not be subject to the quarterly administration component of the SGC and penalty amounts will generally be reduced as well. However, the nominal interest component will still need to be paid as this represents compensation for the relevant employees.
It is important to note that employers who do not take advantage of the amnesty will have additional penalties applied to unpaid SG amounts – with the ATO set to impose a minimum rate of 100% of the shortfall.
That is, failing to take advantage of the amnesty means that if problems are detected by the ATO later, then:
- no deductions will be available for the amounts that end up being paid,
- the SGC amount will be higher, and
- an automatic minimum penalty amount will apply (the Commissioner could potentially increase the penalty amount).
Given the complexity of the SG system, and the limited period of time to take advantage of the amnesty, it is important that employers who could potentially have historical SG issues contact their Accountant. This would be particularly important for businesses who have used contractors as part of their workforce – as distinguishing between employers and contractors can be difficult.