Many readers of SuperGuide like to manage as much of their self-managed superannuation fund (SMSF) themselves as possible.
We’ve written before about how to find low-cost services but if you’ve got a head for numbers and accounting you might be able to go one step further.
Just like you don’t need an accountant to lodge personal income tax returns, it is possible to forsake the use of an accountant when it comes to your SMSF and lodging its accounts. However, you will need to have fairly good administration software and understand the rules and regulations very clearly.
Who’s it for?
This approach would suit a fund with all members in accumulation phase and with a fairly simple investment strategy. It might also suit trustees that already have a business and the relevant software needed to set up a direct portal to the Australian Taxation Office (ATO) and the Australian Securities and Investments Commission (ASIC).
It is definitely more suitable for those with more time on their hands – a commodity not necessarily in surplus for business owners.
And keep in mind the ASIC recent warning that SMSFs may not be appropriate for those with balances under $500,000.
Dealing with the ATO
In our article on ways that SMSFs can be ultra low-cost we explain everything you need to do to set up an SMSF and create a trust deed and investment strategy yourself. However, one thing you will need to keep doing after you’ve set up an SMSF is to lodge the SMSF’s tax return and financial statements and pay the supervisory levy each year.
Depending on your balance and what happens with your SMSF during the year, you may also have transfer balance account reporting requirements.
Currently there is no direct ATO portal for SMSFs, but SMSFs can lodge their SMSF Annual Return electronically or by paper with the ATO.
If trustees don’t want to lodge electronically via a tax agent (which the ATO reports 99% of SMSFs do) they can lodge through the Standard Business Reporting (SBR) portal.
To do that, the SMSF will need:
Apply for an AUSkey electronically through the Australian Business Register website here.
However, there is one thing that you won’t be able to do yourself and that’s get your SMSF audited. Even if you are an auditor you still need your SMSF independently audited by a third party every year.
Your auditor must be registered with ASIC as an approved SMSF auditor. Check their database of auditors here.
Dealing with ASIC
If you have a corporate trustee structure for your SMSF you will need to pay ASIC fees each year – and notify ASIC of any changes to the trustee company at any point.
While there is no specific portal for SMSFs that use a corporate trustee, ASIC says the directors of a corporate trustee could use the company officeholders portal to lodge documents with ASIC.
There is a vast range of SMSF software products available for SMSF trustees to help manage and administer funds. However, if you are seeking to pass information directly on to the ATO and ASIC, it is probably better to use SMSF software that is also SBR-enabled. The below four products are included on the SBR website’s list of products available that provide self-managed superannuation fund annual return (SMSFAR) reporting.
|Software product||Developed by||Latest version|
|ESUPERFUND_SBR_Services||ESUPERFUND Pty Ltd||v2016.1|
|IDS Super||IDS Super Pty Ltd||2016|
|Simple Fund 360||BGL Corporate Solutions||v1.15|
|SuperMate||Supercorp Technology Pty Ltd||v4.1|
Depending on what level of service you are after, the products provide varied levels of SMSF administration, technical and investment assistance.
- ATO annual return and supervisory levy
If you lodge your SMSF annual return yourself, the due date is generally 28 February the following financial year. If you did not lodge your return for the previous financial year on time, the due date will be 31 October. For your first year the due date is 31 October.
- Corporate trustees
ASIC will send you an annual statement for your registration fees shortly after your annual review date, which is the anniversary of the day you registered the corporate trustee.
The fee must be paid by the due date or there will be a late payment fee.
- Payment up to one month late – $80
- Payment more than one month late – $333
- Transfer balance account reporting
SMSFs paying a pension are also required to report transfer balance events. The main kind of transfer balance event will be the details of a new retirement phase or death benefit income streams. (See our article here for more information as to what constitutes a transfer balance event.)
The due date for reporting a transfer balance event will depend on the size of the pension account balance and the total superannuation balances of members. For a fund with member superannuation balances of no more than $1 million when they start a pension, the fund only needs to report once a year with their annual SMSF tax return. However, for funds with member balances of more than $1 million, reporting must be done within 28 days of the end of the quarter the event occurred.
It is possible to partially be your own accountant but, if this is the path you want to go down, make sure you do it for the right reasons. You will need a reasonable knowledge of accounting practices, otherwise it might end up costing you more than it’s worth if you end up getting fined for a mistake.