Growing concern over outstanding lodgements
The Australian Taxation Office (ATO) is ramping up scrutiny on self-managed super funds (SMSFs) that fall behind on their lodgement obligations, warning that non-compliance will now attract faster and firmer action.
In its 2025–26 compliance program and recent updates, the ATO has made clear that trustees who delay lodging their SMSF Annual Return (SAR) risk penalties, suspension of Super Fund Lookup status, loss of tax concessions and even disqualification.
What trustees face for late lodgement
When trustees fail to lodge their annual return on time, the ATO may impose Failure to Lodge (FTL) penalties. From 7 November 2024, one penalty unit equals $330, with up to five units ($1,650) per late return. Late lodgement can also jeopardise a fund’s concessional tax treatment if the ATO classifies it as non-complying.
An overdue return may also trigger a change in Super Fund Lookup status to “regulation details removed”. This restricts the fund from accepting rollovers and employer contributions until all outstanding returns are lodged. Once caught up, the fund’s status is usually restored to “complying” on the first or 15th day of the following month.
Escalating compliance and disqualification risk
Persistent failure to lodge may attract further sanctions under the ATO’s non-compliance framework. The regulator can apply administrative penalties, rectification directions, enforceable undertakings, issue Notices of Non-Compliance, or in serious cases, disqualify trustees. A disqualified individual cannot act as an SMSF trustee or director of a corporate trustee again unless reinstated by the AAT or Federal Court.
What the 2025–26 compliance year brings
Trustees should expect faster escalation of compliance intervention this year. The ATO has announced targeted compliance action for SMSFs with overdue lodgements and an increased focus on trustees failing to act on commutation or release authorities. At the same time, the ATO continues to promote education and voluntary disclosure, encouraging trustees to resolve compliance breaches early rather than waiting for enforcement.
For new SMSFs, the first SAR must be lodged by 31 October unless an approved tax agent extension applies. Funds without assets in their first year should lodge a Return Not Necessary (RNN) form to avoid being listed as overdue.
What trustees must do now
- Review and lodge all outstanding SMSF Annual Returns immediately
- Use the ATO’s Early Engagement and Voluntary Disclosure service to address issues before formal action begins
- Prepare financial statements and engage an auditor early to avoid delays
- Monitor Super Fund Lookup status and confirm it updates to “complying” once returns are up to date
- Stay informed via the ATO’s SMSF Newsroom for current compliance updates and reminders.
The ATO’s message is clear: trustees can no longer rely on leniency for late lodgement. With increased compliance activity planned for 2025–26, failure to act could result in restricted fund operations, penalties or even trustee disqualification. Trustees should make timely lodgement a priority to protect their fund’s compliance status and tax advantages.
Need help getting your SMSF back on track?
If your fund is behind in its reporting or compliance, speak with our team at Intuitive Super on 1300 856 064 today. Timely action can prevent penalties, restore your Super Fund Lookup status and protect your fund’s concessional tax treatment.
Award winning Intuitive Super works with you from set-up to wind-up, offering a full range of SMSF compliance and admin services. Read more at https://carrickaland.com.au/smsf/.
Further background
The ATO has raised alarm about the growing number of SMSFs with overdue returns, revealing that more than 65,000 funds still had outstanding lodgement obligations for the 2023 year. Lodgement, the regulator says, is “the most essential compliance obligation trustees must meet”. In its 2025–26 Corporate Plan, the ATO lists “Outstanding SMSF Annual Returns” as a key compliance focus, signalling stronger enforcement and earlier intervention.
Sources:
Australian Taxation Office – Are you meeting your lodgment obligations?
Australian Taxation Office – Our SMSF non-compliance actions
Australian Taxation Office – ATO Corporate Plan 2025–26: What it means for SMSFs
Australian Taxation Office – New SMSF? Here’s what you need to do by 31 October
