Finance News
SUPER GUARANTEE AMNESTY
30 May 2018

Businesses that struggle to pay their super guarantee commitments will be pleased by the Federal Government’s recent proposal to allow a 12 month amnesty for late payments from 24 May 2018 to 23 May 2019. Subject to the bill being passed by Parliament, this amnesty would allow such payments to still be tax deductible. Under the current rules, any discovered late payments are not tax deductible.

However care must be taken with the payments made as nominal interest of 10% would still need to be paid as well as calculating the super owing based on total wages and salaries rather than ordinary times earnings. This wider definition could result in a higher super payment being required as it includes items like overtime which are usually excluded from super calculations.

Although the amnesty will be a benefit for those businesses that are struggling with cash flow, there could be a hidden sting in the tail. With the recent introduction of SuperStream and the coming introduction of single touch payroll for businesses, the ATO will have access to more timely and more accurate information about employer’s superannuation payments and will be able to more easily identify those who are late with their payments. There is a general belief that this amnesty could represent a final opportunity for employers to get their super commitments up to date before the ATO starts to use the new information to impose tougher penalties on late payers.

If you would like further information regarding this proposal or assistance with your cash flow, please do not hesitate to contact us.

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