ATO reveals top contraventions for SMSFs
Recent ATO statistics show there were 40,200 SMSF contraventions reported during the 2020-21 financial year, with contraventions relating to loans or financial assistance to members still the most commonly reported.
The ATO this week has published its statistical overview of SMSFs for the 2019-20 financial year based on annual SMSF returns.
As part of the overview, the ATO also included data for the 2020-21 financial year on SMSF demographics and assets, as well as auditor contravention reports (ACRs).
The number of ACRs reported by approved SMSF auditors during the 2020-21 income year represented 2.6 per cent of the total number of lodging SMSFs.
There were a total of 40,200 contraventions reported in 2020-21, which were lodged for 13,900 SMSFs, according to the data.
“Just under half (45 per cent) of all contraventions were reported as rectified,” the statistical overview states.
The overview also highlighted the most commonly reported contraventions, with loans or financial assistance to members the most commonly reported contravention at around 20 per cent.
This was followed by contraventions relating to in-house assets and separation of assets, constituting around 17 per cent and 13 per cent, respectively.
The statistics also show there has been a significant drop in the number of SMSF auditors performing SMSF audits in the five years to June 2020.
The number of SMSF auditors performing SMSF audits has dropped from 6,035 in the 2015-16 income year down to 4,628 auditors in the 2019-20 income year.
According to the data, 47 per cent of SMSF auditors performed between five and 50 SMSF audits during 2019-20, while 27 per cent of SMSF auditors performed 51 to 250 audits.
Only 7 per cent of SMSF auditors conducted more than 250 audits, despite this representing 59 per cent of total SMSF audits.
“The average audit fee was $660, and the median audit fee was $550,” the report stated.
The statistical overview also revealed data on the use of tax agent services by SMSFs for the 2019-20 year, with 99 per cent of SMSFs using a tax agent to lodge their 2019-20 SMSF annual return.
“For these agents, the average number of SMSF clients was 31 and the median was 9,” the overview stated.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.