Temptation to tap into SG funds increases
Australian Taxation Office (ATO) second commissioner Jennie Granger has warned small businesses against the temptation of using staff superannuation guarantee funds to prop up a struggling business.
Speaking in Brisbane last night, Granger said in the ATO’s experience, such practices represent “a very dangerous temptation” that can lead to escalating debt problems.
Granger said the ATO has been increasing its surveillance on the payment of superannuation for employees, with many still not getting it right. Of the 2,200 employers selected and visited since July 2008, around 1,045 had not met their superannuation guarantee obligations.
“Our concern is that more employers may be tempted down this path to manage their way out of financial difficulty,” Granger said.
“Our clear message to employers is, don’t be tempted. It’s not your money and we will take firm action.”
Instead, contact the ATO. Based on the experience of ATO staff, calls from small businesses concerning lodgement and debt obligations have been on the rise since October last year.
Granger said many small businesses are seeking to extend their arrangements with the tax office because they believe they won’t meet their current commitment. Granger said in these circumstances, the ATO’s message to small businesses is ‘please contact us’. Small businesses that are struggling but can remain viable will be given every opportunity to get back on track, Granger said.
This assistance usually comes in the form of extra time to pay obligations, while people facing significant hardship may be given more than temporary assistance. This could include a release from some or all of a small business’ debt obligations.
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