Lodging your SMSF return on time is more important than ever

Running your own self-managed super fund (SMSF) comes with many responsibilities and lodging an annual return is one of the most important.

While paperwork may not be anyone’s favourite task, the Australian Taxation Office (ATO) takes the SMSF Annual Return (SAR) very seriously. As of February 2025, around 85,000 SMSFs had not lodged their SAR for the 2023 income year and some 54,000 were still outstanding for 2022.ⁱ

The ATO has made SMSF lodgement a key focus of its 2025-26 Corporate Plan and is now taking targeted compliance action against trustees who fail to meet their obligations. Penalties may include fines, loss of concessional tax status and even disqualification from managing an SMSF.

Why lodging matters

The ATO considers timely SAR lodgement a fundamental obligation for SMSF trustees.

The SAR is more than just a tax return. It includes regulatory information, member contribution data and enables payment of the SMSF supervisory levy. It must be lodged every financial year, even if the fund has no activity or tax liability.

Non-lodgement is a red flag for the ATO, especially in newly established SMSFs. It may indicate illegal early access to super savings and can hinder the ATO’s ability to monitor compliance with contribution caps, Division 293 tax and transfer balance caps.

Potential penalties

The SMSF sector continues to grow with more than 625,000 funds holding assets worth just over $1 trillion, making up a quarter of the total assets held in superannuation funds.ⁱⁱ

In recent years, the regulator has invested in data-matching technology and analytics to identify non-compliant funds more quickly. This means trustees who fall behind on lodgements are more likely than ever to be detected and penalised.

Failing to lodge your fund’s SAR can result in:

Fines – administrative penalties can be imposed on each trustee, not just the fund
Loss of concessional tax status – non-compliant funds may lose their concessional tax treatment, resulting in a higher tax rate on income
Tax penalties and interest – extra charges may apply for late payments or under-reported income
Disqualification as an SMSF trustee – this is recorded on a public register and can have long term consequences

If your SAR is more than two weeks overdue, its Super Fund Lookup status may be changed to ‘regulation details removed’, restricting its ability to receive super rollovers and employer contributions.

Understanding your SAR responsibilities

Trustees must follow a specific process each year to meet their SAR obligations:

Prepare financial accounts – including valuing the fund’s assets, which may require consulting a professional valuer if the assets not regularly priced on an open market.
Appoint an approved SMSF auditor – at least 45 days before your lodgement due date.
Complete the audit – the auditor reviews the fund’s financial statements and assesses its compliance with the super laws then provides a report to trustees that may include issues to be addressed.
Lodge the SAR – include auditor details, audit summary and payment for any outstanding tax and the funds SMSF supervisory levy.

The ATO does not issue a Notice of Assessment for SMSFs but will issue a Notice of Amended Assessment if subsequent amendments are made to the tax return.

With the ATO increasingly focussing on this area, it’s time to check the lodgement status of your SMSF.

How we can help

Managing an SMSF can be complex, so a qualified accountant can be an ally when it comes to successfully and efficiently running your SMSF.

Given the significant responsibilities involved in managing an SMSF, the ATO recommends trustees consider using professional help. We can not only advise and support you when it comes to the financial aspects of running your SMSF, we can help you create the necessary documentation to compile your SAR and ensure it is lodged on time.

What you’ll need for your SAR

Here’s a checklist with the information needed to prepare your SMSF’s annual return:

Fund income – declaration of all assessable income such as investment returns, dividends, interest and rent
Fund expenses – such as allowable deductions, insurance premiums, administrative fees and audit expenses
Member contributions – all concessional and non-concessional contributions received
Member rollovers – details of any rollovers into or out of the fund
Member balances – 30 June account balance for every fund member
Pension payments – details of pension payments made to fund members
Tax credits – details of any credits such as franking credits
Asset valuations – current valuations for all fund assets
Transfer balance cap – full details of all TBC events during the financial year
Financial statements – all financial activities, including the fund’s position at financial year-end
Regulatory information – confirmation statement the fund complies with super law
Investment strategy – confirmation statement the fund complies with its documented investment strategy
Tax liabilities – calculation of any tax payable or refundable.

i SMSF Association National Conference address | Australian Taxation Office

ii SMSF Association National Conference address | Australian Taxation Office

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