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A draft practice statement on the ATO’s position in deciding to remit the Part 7 penalty in relation to superannuation guarantee obligations has now been released, with the new guidelines seemingly more “definitive”.
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Part 7 penalty remission draft practice statement released
16 September 2019
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Last week, the ATO released PS LA 2019/D1, an internal document, to ATO officers to guide them on the remission of additional super guarantee charge imposed under Part 7 of the Superannuation Guarantee (Administration) Act 1992.
If finalised, the practice statement will replace the current PS LA 2011/28.
Speaking to Accountants Daily, HLB Mann Judd partner Peter Bembrick said the new draft practice statement seems to provide more definitive guidance to ATO officers.
“The 2011 guidance was a bit more general with terms like ‘genuine attempt to comply’ or ‘moderate attempt to comply’, so it seems to require a bit more judgement on the part of the ATO officer to see how deserving the particular case may be for the remission of penalties, whereas when you go to the 2019 draft release, it seems to provide more specific guidance,” Mr Bembrick said.
The new table in the 2019 draft statement details the level of remission to apply depending on the level of engagement an employer displays — from severe disengagement and phoenix arrangements to unprompted self-assessment.
“On the face of these documents, I can only assume that the ATO’s own experience is that it can be a bit subjective and they are making an effort to be more consistent,” Mr Bembrick said.
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“The law itself hasn’t changed, but they seem to be trying to apply a bit more consistency and let people know where they stand.
“It is always useful for taxpayers and advisers because we can look at it and have an idea of what they are doing.
“If we get an ATO decision, we can see what it is based on and we might know there’s no point appealing because they’ve followed the guidelines, or if we don’t think they’ve followed the guidelines, then it gives us something to discuss with the ATO.”
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