Some employers got away with not paying almost $223 million of superannuation entitlements to employees during the 2014-15 financial year, according to the annual report of the Tax Office.
This figure however stands in stark contrast to the amount the Tax Office said it had secured from employers after investigating worker complaints that businesses were failing to meet super guarantee (SG) obligations. The annual report revealed that more than 21,000 employers were checked for compliance — a process that secured $630 million in SG payments for employees.
“We reviewed all notifications made to us where employees were concerned that their employer had not paid their superannuation guarantee entitlements,” the Tax Office said. “We also checked to ensure superannuation guarantee obligations were being met when undertaking pay-as-you-go (PAYG) compliance actions.”
Penalty notices were received by 597 directors, which related to superannuation obligations not being met by 399 companies. This enforcement initiative ended up raising $52 million.
Phoenix companies were also a target during the 2014-15 financial year. The Tax Office raised estimates of the superannuation guarantee on entities that engaged in phoenix activities to $8.5 million.
There was also $1.8 million raised from the super guarantee charge following the Tax Office’s revisitation of industries deemed to be at risk due to information it received indicating a failure to comply with the law. Companies in this category ended up under the microscope because of factors such as the size of the employer, cash-flow issues, and the churn taking place within the business.
The Tax Office also boosted its proactivity in the area of self-managed superannuation funds (SMSFs), which continues to be a growth area for the revenue authority. Almost 557,000 SMSFs are in operation, with the Tax Office taking the approach of streamlining compliance measures for low risk funds.
This meant a greater focus on high risk funds and their trustees, which resulted in 660 trustees being disqualified and 92 funds being made non-complying.
The Tax Office also revealed that it was unable to claim almost $210 million in tax because companies were declared insolvent — and that a decision was made to not chase $13 million in unpaid taxes because to do so would be “uneconomic”.