A closeup of a red warning light bulb on the wall
The ATO has found at least 110,000 SMSFs have not lodged an annual return for the last financial year and will be engaging with repeat non-lodgers or those involved in serious breaches, a senior executive at the regulator has stated.
ATO SMSF director Kellie Grant said at the end of the last financial year more than 300,000 SMSF annual returns (SAR) were still overdue for the past three financial years, including some funds that had never lodged a SAR.
“As of 30 June 2025, there are, unfortunately, around 110,000 lapsed lodger funds, meaning funds who had one or more outstanding returns, and we have 24,000 funds that have never lodged their first return,” Grant stated during a recent presentation hosted by The Auditors Institute.
“Also, at 30 June there were around 66,000 of the 2023 SAR lodgements overdue and just over 130,000 of the 2024 SAR lodgements overdue.
“That’s really concerning, given a trustee’s fundamental obligation is to lodge their annual returns by their due date.”
She added that while the ATO tracks the number of funds that have failed to lodge a SAR, it was also aware of each fund that had failed that requirement and whether it was ongoing behaviour, and was targeting its compliance activity towards them.
“We do track these funds. We issue letters reminding them they have got an upcoming lodgement date,” she said.
“We also have a compliance process where we pick some of the more egregious non-lodgers, those funds that have a number of years outstanding, that look like they might have no assets in their fund and might have accessed the fund’s monies.
“We select those more serious cases to take action against trustees through imposing penalties, making the funds not complying or usually disqualifying the trustee.
“It’s a risk-based approach that we do apply there, but we certainly do track all of them.”
She pointed out the ATO had discontinued its SMS messages to trustees to remind them to lodge a SAR, but still sent notifications when it identifies changes on a fund account that may indicate fraud.
“When lodgements by tax agents are made, they sometimes change the bank account or the electronic service address of the fund in the return and that can trigger one of those fraud alerts,” she noted.
“So when a return is lodged, there may be several reasons that might trigger an alert, but I don’t think it’s just the lodgement itself.”
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
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