ATO SMSF penalties to rise with penalty unit increased from $180 to $210

A range of superannuation and SMSF penalties will increase after legislation to raise the Federal Penalty Unit rate to $210 passed the Parliament.

The Federal Penalty Unit will increase from $180 to $210, with effect from 1 July 2017, with the passage of the Crimes Amendment (Penalty Unit) Bill 2017.

The Explanatory Memorandum to the Bill says: “The increase to the penalty unit value will only apply to offences committed after the amendments come into force. The amendment to the value of the penalty unit will not impact on current proceedings for Commonwealth offences.”

The Federal Penalty Unit is used in calculating a range of ATO and superannuation penalties.

The ATO Failure to Lodge penalty, for small entities, carries a maximum of 5 penalty units – so the maximum penalty increases from $900 to $1,050.

The ATO SMSF Administrative Penalties will also increase. These range from 5 to 60 penalty units, so an increase of $900-$10,080 to $1,050-$12,600.

The penalty for failing to comply with an Education Direction or a Rectification Direction – 10 penalty units – will rise from $1,800 to $2,100. Penalties for breaches of the Collectables and Personal Use Asset rules – also 10 penalty units – will rise by the same amount.

There are a range of other penalties in the SIS Act which will increase as a result of the change in the Federal Penalty Unit,  some of which have penalties of 100 units – now $21,000.

The Penalty Unit rate was set to be automatically indexed to CPI on 1 July 2018, and every three years after that. This first indexation has now been delayed until 1 July 2020. The increase was announced as part of the 2016/17 Mid Year Economic and Fiscal Outlook (MYEFO).

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