Updated statistics on ATO work in the area of excess contributions tax were discussed.
Work undertaken in relation to the 2007-08 and 2008-09 years indicated that most assessments related to breaches of the concessional cap only. Overall, only around 0.6% of individuals breach a contribution cap. Around 8-10% of assessments are disputed; around 6% of affected individuals apply for Commissioner discretion where the rate of success is 17%.
Andrea Slattery, SPAA raised an issue related to an additional pay period in the year. Neil Olesen undertook to communicate messaging regarding the additional pay through normal ATO channels.
Secretariat note: ATO updated communications and provided information on this issue following the SCC meeting.
Following a question from Heather Gray, Law Council of Australia, the ATO advised that there was a review in place of cases where there were inadvertent triggers of the bring forward, including very small amounts leading to large assessments.
The forum discussed statistics provided of cases breaching a cap by income tax bracket. In discussion arising from other questions, the ATO referred the group to recent questions on notice that had been tabled in parliament. The ATO advised that it was still undertaking analysis, and that as the system progresses more information would be available for consideration including analysis of the number of repeat offenders.
Jennifer Batrouney SC, Law Council of Australia asked if adviser error was regarded as an issue where discretion might be granted. Neil Olesen advised that discretion was limited to special circumstances as defined by the Courts. Inadvertent poor advice is not considered a special circumstance, however Neil advised that there may be a course of action that could be pursued by an individual against the adviser. Brett Peterson reiterated that excess contributions tax (ECT) is a tax and that the law provides for the tax to be raised, and it is not the Commissioner's role to let people off from paying a primary tax liability.
Overall, Neil Olesen advised that the ATO is looking at trends and other areas of analysis, and that as the system progresses a behavioural shift is expected. Individuals can best avoid a liability by paying attention to their superannuation and the ATO will continue to ensure that financial planners and advisers are educated about the constraints related to contributions.
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Last Modified: Thursday, 10 November 2011