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The Tax Institute says the streamlined system for transfer balance account reporting for SMSFs should not commence until 1 July 2023, given the difficult period faced by tax professionals in the past two years.
In November last year, the ATO released a consultation on moving to a single transfer balance cap events-based reporting framework for all SMSFs. There are currently two different time frames for reporting transfer balance cap events for SMSFs, depending on total super balances.
In a submission to the ATO’s consultation, the Tax Institute said it broadly supports a simplified transfer balance account reporting (TBAR) system for SMSFs.
“We consider that SMSFs should be encouraged to report regularly, but note the need to ensure that SMSF trustees are not placed under an excessive compliance burden,” The Tax Institute said in its submission.
“We note that tax professionals have faced a difficult period over the previous two years, focussing on economic stimulus measures and business survival, often without recompense,” the submission said.
“Further, during 2022 they will be required to adopt to new tax compliance approaches such as adopting phase 2 of the single touch payroll, and addressing risks under PCG 2021/4: Allocation of Professional Firm Profits while also assisting clients with any remaining stimulus measures.”
It also noted that tax professionals would continue to face challenges with high rates of absenteeism caused by the Omicron COVID-19 variant.
Adopting the new TBAR system for SMSFs from 1 July 2023, the submission explained, will allow tax professionals to ensure they are ready to adopt the increased reporting criteria.
“It will also allow SMSF trustees sufficient time to better understand their reporting obligations and enable them to more readily meet the new reporting requirements,” it said.
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