Interest Only Loan Dead?

Superannuation sleeper issue may get late-paying employers in trouble

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Beware of a sleeper issue regarding an employer’s superannuation guarantee obligations, it has been assumed that employers are unaware of the interest they owe because of missed payments.  

The ATO has been providing an administrative concession to super guarantee charge (SGC) when employers fail to pay a minimum amount on the due date.  

The SGC consists of the SG shortfall amounts, a $20 admin fee per employee and 10% interest on amounts owed to employees. ATO had been calculating interest from the due date of the SG to the actual payment date only so it’s possible employers have already gotten used to this.  

Without such concession, interest would accumulate from the quarter start date to the date of SGC submission. The concession can be revoked anytime. This is an internal concession from the ATO that can change anytime because there is no written document about it.  

The SGC must be taken in the start of the quarter an employer is late so it could mean the 1st of January to the time the SGC form is lodged, not when the employer pays. The ATO will charge 10% interest which could easily pile up over several years. The interest component will go to the super fund and ATO will take the $20 admin fee.  

Employers will even be more pressured to comply with their SG obligations especially with the recently introduced Treasury Laws Amendment Bill 2018 that says those who don’t pay their superannuation guarantee may go to prison. Employers are advised to pay on time and do not skip a payment because if the ATO finds out, they have no choice but to voluntarily disclose and get into trouble. 

If you would like to know more about superannuation, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more. 

Whether you are a beginner, seasoned investor or business owner, our property and business tax accountants can give you guidance to maximise the financial areas of your life. Chan & Naylor Accountants in Perth can also give you an integrated and tailored solution for your superannuation, taxation, property investment, asset protection, estate planning and more.  

Click here to schedule a chat or visit any of our local offices near you. 

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Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales. 

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