SMSF trustees must comply with the super laws, but there are occasions when they cannot warrant the same. As a requirement by the Australian Government and the Australian Tax Office (ATO), SMSF trustees must annually call for audits. Not performing an audit or not complying during can subject to significant penalties.
Receiving a notice of non-compliance from the ATO usually has devastating tax consequences. Other penalties range from education all the way to civil or criminal convictions. Offenses that are minor are treated with small penalties like sending the trustees for an education course from the ATO, to help them understand and better manage funds.
After the matter is reported to the ATO, if major or significant issues are spotted by the auditor, then there are chances of having assets frozen, disqualifying a trustee or worse still, losing control of the fund entirely.
Here are a few ways to avoid such penalties and stay out of trouble:
- Do a background check of your auditor
- Choose a trustworthy auditor
- Ensure all documentation is well up-to date and in check
- Submit your annual return on time
- Accurate findings from the audit must be submitted with the report
There are a lot of regulations around SMSF and no-one wants to live in a world where SMSF compliance burdens grow intensely. One cannot risk losing life savings due to non-compliance, it just isn’t worth the efforts. It is therefor best to avoid doing something wrong during an audit for your SMSF.
It is important to choose your auditor wisely as it determines the position of your SMSF on an annual time-line. Have our experts guide you on anything you need to know with regards to an SMSF audit, write to us at SMSFaudit@dhan.com.au or call us on 1300 707 325