Self-Managed Super Funds (SMSFs) operate in a highly regulated environment, where compliance is not optional.

Recently, the Australian Taxation Office (ATO) has reinforced the importance of the timely lodgement of SMSF Annual Returns (SARs) in 2025. It doesn’t matter if your fund has no tax liability – whether your fund is active or dormant, lodging your SAR is a critical compliance obligation that trustees must meet each financial year.

Why does the ATO take this position on SMSF Annual Return preparation and lodgement?

It’s the role of the ATO to ensure that taxation is applied fairly, universally, and to the letter of the law. This includes across the SMSF landscape, where tax rules are more complicated, and compliance much more stringent than the general business or personal tax environments.

“We expect a significantly higher proportion of non-lodgers have contravened the regulatory rules,”

Emma Rosenzweig
ATO Deputy Commissioner

SMSF annual returns are a focus for the ATO because non-lodgment may indicate deeper compliance issues, according to the ATO Deputy Commissioner, Emma Rosenzweig. “We expect a significantly higher proportion of non-lodgers have contravened the regulatory rules,” she stated at the SMSF Association’s national conference.

Understanding the scale of the SMSF annual returns compliance issue

Self managed super funds are big business.

• There are 646,168 SMSFs in Australia
• SMSFs have more than 1,197,293 members spread across them
• The sector holds over $1.01 trillion in assets

But according to statistics published in the ATO’s March 2025 quarterly report, there are some genuine issues with SMSF reporting compliance:

• Over 85,000 SMSFs have not lodged their 2023 annual return
• 54,000 returns remain outstanding for the 2022 financial year
• 4,500 newly registered funds from 2023 have yet to lodge their first return

These figures highlight the scale of the compliance challenge and the ATO’s motivation to act decisively.

Why timely lodgement matters

You might easily think that the ATO’s interest is purely in revenue raising from taxes on SMSF fund contributions and profits. But lodging your SAR is not just about tax reporting. It also:

• Covers regulatory information and member contribution reporting
• Enables payment of the SMSF supervisory levy
• Maintains your fund’s visibility on Super Fund Lookup

As with many compliance issues, while it may seem onerous to lodge your SAR on time, we know that the cost of not lodging can be much higher.

For example, if your SAR is more than two weeks overdue, your fund’s status may be changed to “Regulation details removed”, which can block rollovers and employer contributions. Persistent non-lodgment can also lead to penalties and the loss of valuable tax concessions. So, in our experience as financial advisors to SMSFs, it’s worth making the effort. Below we’ve broken down the key points from the ATO on how to maintain compliance:

Who needs to lodge an SAR?

All SMSFs must lodge a SAR annually. However, if your fund had no assets in its first year, you may request the ATO to:

• Cancel the fund’s registration, or
• Mark the record as “Return Not Necessary (RNN)”

Key lodgment dates

Newly registered funds and those with overdue SARs:

• Lodge by 31 October
• Pay any amount due by 1 December

All other SARs:

• Lodge by 28 February, unless otherwise advised by the ATO

How to lodge:

There are two ways you can lodge your SAR:

• Electronically, via Standard Business Reporting (SBR) using SBR-enabled software and a machine credential
• Via hard copy, using the downloadable SAR form and instructions for the relevant year

Be proactive with your SMSF compliance:

• Check Lodgment Status: Ensure all SMSFs are up to date with their reporting obligations.
• Educate Trustees: Many are unaware that returns are required even for inactive funds.
• Act Promptly: The ATO is actively contacting trustees and tax agents. Delays could lead to penalties or loss of fund status.

Need to know more?

For all the details straight from the ATO,  check out this page on their website, or call and speak with your LDB contact if you have more questions.

Lodging your SMSF Annual Return on time is essential to maintaining your fund’s compliance and avoiding unnecessary penalties. The ATO’s message is clear: compliance is not optional. With enforcement actions already underway and the sector under increased scrutiny, now is the time to review SMSF obligations and take corrective action where needed.

The LDB Superannuation team provides a complete range of tax, accounting and compliance services to help you manage your Self Managed Super fund with ease, and be confident that compliance won’t be an issue. If you’re unsure about your lodgment status or need help navigating the process, contact the LDB team today to ensure your fund stays compliant and protected. Call us on 03 9875 2900, or get in touch online.