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The ATO is set to implement a pivotal update within the Small Business Superannuation Clearing House (SBSCH) on 15 March 2024. This initiative introduces SMSF bank account validation aimed at bolstering the precision and security of superannuation contributions.
This new system feature affects all small employers who use the SBSCH to pay superannuation to employees’ SMSFs.
Key Update: SMSF Bank Account Validation
The ATO’s validation process will require small employers using the SBSCH to ensure a perfect alignment between their employees’ SMSF bank account details and the corresponding fund bank account details recorded by the ATO.
The validation will focus on the BSB and account number as registered under the SMSF’s Superannuation Role within ATO systems.
For any employee where there is no exact match, the SBSCH will not process their superannuation payment.
Action Required: Review Employee Records
The ATO is conducting a mailout campaign directed at small employers likely to be impacted by the new SBSCH SMSF bank account validation process.
However, with SG obligations for the March 2024 quarter due no later than 28 April 2024, it is important for small businesses to act proactively.
If you have small business clients using the SBSCH, it is important to urge them to contact their employees to confirm that the SMSF bank account they pay superannuation contributions to, is the same as the SMSF bank account registered against the superannuation role with the ATO.
Where employees are unsure how to check whether the bank account their employer makes superannuation contributions to is the same as the one registered with the ATO we anticipate an increase in enquiries to tax agents or calls to the ATO on 13 10 20 for assistance.
Should there be a need for an employee to amend SMSF bank details held by the ATO, it’s crucial to communicate these changes to all fund members as the ATO will issue email or text alerts to ensure all fund members are informed.
Why Act Now?
Given the proximity of the next SG contribution deadline on 28 April 2024, it is important to take action well ahead of this date to prevent potential compliance issues.
Small employers delaying the review and update of their employees’ SMSF bank records risk facing SG shortfalls and potential penalties as there may be insufficient time to rectify a discrepancy.
For more information – refer to:
Written by Mary Simmons,
Head of Technical