Addressing the SMSF Association Conference on the Gold Coast last month, ATO assistant commissioner Dana Fleming outlined the regulator’s journey over the past 12 months and into the future to improve regulatory effectiveness, with a focus on consistency and transparency.
“To understand our approach to enforcement in the SMSF sector, it’s important to understand our strategic direction and our vision,” Ms Fleming said.
The ATO noted that, on average, over the past five years only 2 per cent of the lodging SMSFs are reported as contravening regulatory provisions of the Superannuation Industry (Supervision) Act 1993 (SISA).
It said the vast majority of SMSFs are doing the right thing and the vast majority of trustees they contact self-rectify, and that it only takes strong enforcement action in the most serious cases.
Ms Fleming said that improving ATO transparency as a regulator is important, and part of that transparency is ensuring that trustees have a strong understanding of their obligations.
“Our preference is always to assist SMSF trustees to stay in the system by helping them rectify and return their SMSF to a point where it is again complying with the SISA. However, when rectification is not possible or appropriate, we will take action to remove the SMSF from the system, or disqualify the trustees or both,” she said.
“We need to better explain our expectations of trustees. We want to continue to highlight better the ‘swim between the flags’ zone, where the rips are and how you can navigate better the sea of compliance obligations.”
The comments from Ms Fleming follow an earlier commitment from the ATO that it would begin auto-subscribing new trustees on to its SMSF news service after the regulator revealed it only had 35,000 subscribers against its 1.1 million trustee population.
“[We had] 35,000 subscribers to our SMSF news service, which I was pretty depressed about. We’ve got 600,000 SMSFs or, arguably, 1.1 million members,” Ms Fleming said.
“It’s meant to be our key channel for telling people what they need to know, so we’re going to start auto-subscribing people.”
