How much does a SMSF tax return cost?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Gen-Y, 6th Feb, 2020.

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  1. Gen-Y

    Gen-Y Well-Known Member

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    Hello PC members,
    I am asking for my neighbour who have his own SMSF.
    He was telling me it cost him $3000 to do a tax return.
    I think it is a bit over the top considering he is retired 80+ and don't have a complex setup - I think it is annuity type fund that he has. :eek:

    How much does a SMSF tax return cost for you guys if you don't mind sharing.
    If you are in Brisbane, would you mind sharing their contacts?

    Thanks for your time.

    Gen-Y
     
  2. PandS

    PandS Well-Known Member

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    I do online and it cost around 1K but my stuff is fairly simple it all stock market and they get transaction feeds from brokers and banks
     
  3. geoffw

    geoffw Moderator Staff Member

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    Auditing is likely to be a significant part of the cost, not just the accounting. An SMSF must be checked to ensure compliance.
     
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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    He's 80-odd, it may have up to 4 (now 6 members), it is in pension mode so he has compulsory draw-downs @ 7%, others in the fund may be at different rates as well - linky. He needs to keep an eye on this as I know of others who have been penalised for not drawing sufficient funds.
     
  5. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    There is actually not such a thing as a SMSF tax return (only) to be honest. A SMSF Annual Return includes tax reporting. It requires a auditor to provide an audit report and is based upon the audited financial and member reports and compliance with numerous provisions of tax and super laws. Thats normally a bundle of work. If I am approached to lodge a SMSF return only I wont assist. If the auditor is approached to assist they will also likely refuse.

    If I was to charge for a SMSF return only it would cost me about 5 minutes of time and probably reflects next to nil of the full costs to arrive at that point. What used to be slow and complex manual accounting is a very automated software issue.

    A SMSF cant be an annuity style fund. An annuity pays a fixed sum at regular interals (monthly?) for a defined period. The pension would be non-compliant. It must increase with age and will change each year based upon the 30 June member balance/s.

    $3K may be very expensive or quite cheap depending on the work and records. To assist to determine if old mate is doing things properly I have attached a generic sample report showing what is SHOULD look like
     

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  6. Gen-Y

    Gen-Y Well-Known Member

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    Thanks Paul.
    I will ask my old mate what his record looks like. I will print your sample copy for him.
    If I remember correctly he is withdrawing lump money out of the super yearly . As he keeps asking me which shares he should buy with his $60k each year. I just keep telling him to spend it all up as he would probably not going to need it when he is crooking it. LOL
    Or give it to me, I will spend it on his behalf.
    Knowing him, he would be putting most of it in term deposit which he has mentioned a few times.
    I have no idea why he keeps so much money for whatever reason. Not like he can outspend it faster than he could spend it.
     
  7. JohnPropChat

    JohnPropChat Well-Known Member

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    I don't think the 6 member SMSF measures made it through. Still 4 members.
     
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  8. PandS

    PandS Well-Known Member

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    Most of the audit are fairly straight forward if you got straight forward setup as most of the data are feed into their online system
    cost me $950 all up audit and lodge
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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  10. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    I havent heard much more about the silly one audit in 3 years issue either. It seemed to have holes.
     
  11. JohnPropChat

    JohnPropChat Well-Known Member

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    Fully agree. Audits don't cost a lot in the grand scheme of things and for an SMSF where the accountability is rather high for Trustees/members, audits help keep the books in check
     
  12. Ross Forrester

    Ross Forrester Well-Known Member

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    3k you will start to get a human you can meet who will give advice and help along the way.

    950 you get a remote operator. They will do the work requested and you will never find an opportunity.
     
  13. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Remote being the operative word. Overseas.
     
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  14. Redwood

    Redwood Well-Known Member Business Member

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    Fees vary - it really depends on the service you require. Local accountants can charge what they want whereas specialist smsf providers generally provide a "fixed fee" service.

    There are a number of operators however the obvious online one is now $999 inc GST - not cheap given the restrictions. ASIC will tell you the average running fee is $13000 - what a load of rubbish.

    My firm charges $1308 inc gst, this includes Financial Statements Tax return and Independent Audit. Audit is the cost we bare for the client within that charge. Thats pretty fair - and we are able to gain efficiencies based on the number of funds we have under administration. We charge a higher fee for pension funds. The large majority of our funds invest in property and naturally we have rules / systems to gain efficiencies i.e 3rd party authorities on bank accounts / loans etc. This significantly removes the admin burden for trustees.


    Many accountants will advertise a fee but not include audit. An Australian auditor should be charging $350 at least, if not, there's something fishy going on, as an auditor myself the lowest fee I Charge is $350 even for large financial planning and accounting practices, the risk is to high.

    Hope that helps

    Cheers Ivan
     
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  15. JohnPropChat

    JohnPropChat Well-Known Member

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    Agree with what Ivan said above. Plenty of fixed fee service providers that impose certain limitations (slightly annoying but not the end of the world) to keep prices low. Most provide ad-hoc advice but specialist advice will be extra. Usually in the $300/hr to $400/hr range.

    It may be beneficial to stay away from providers like esuperfund (which are a no frills shop but operate on a no-advice model). If you do need advice down the track from someone else, it won't be cheap as the person providing the advice will need time to get up to speed with the SMSF affairs and that means extra $$
     
  16. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Sometimes a external adviser may baulk at a DIY service as they may give advice or services that isnt completed correctly. eg a pension change, reset or TBar reporting etc.

    Most advisers want to ensure that its 100% squeaky clean and compliant rather than assume the admin service and the client both do things right. I have seen people who just ignore pension docs for example. And invest strategies etc. The admin provider says that extra and the client just bypasses. I reckon 2/3rd of SMSF work we take on have no trustee declarations. 1/3rd would say they dont know where or what the deed is and 80% would have no idea what an investment strategy even is.

    Its why we limit services to end to end so delineation of responsibility is assured. Admin services tend to just ignore non-compliance when the client says "no". The client feels its a fee-tickle.