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Policy: Notification of taxation and superannuation contribution arrears

The Queensland Law Society Council has approved a policy in relation to the reporting of a failure to meet certain taxation and superannuation obligations of law practices.

The policy is not concerned with a practitioner’s personal affairs – those are the subject of the show cause regime (see ss68-70 Legal Profession Act 2007 (the Act)) – but rather taxation and superannuation guarantee obligations of a law practice. The policy therefore applies only to principals (see Section 7 of the Act).

The policy declares that the Council regards a failure to meet taxation and superannuation guarantee obligations as a suitability matter (see s46 (2)(h) of the Act). As such, they must be disclosed, at the latest upon the next application for renewal of a practising certificate.

The tax obligations to which the policy applies are:

  • to lodge business activity statements by the due date applicable to the law practice to pay, by the due date:
    • monies owing to the Australian Taxation Office (ATO) in accordance with a business activity statement
    • any penalties, interest or charges assessed by the ATO as payable in relation to business activity statements
  • where a law practice is not required to lodge business activity statements, to pay by the due date the amount assessed as owing by the ATO as advised in an Instalment Activity Statement.

The superannuation obligations to which it applies are as follows:

  • the obligation to pay the superannuation guarantee as required by the Superannuation Guarantee (Administration) Act 1992. That is, at the time of publication of this policy, 9.5% of each employee’s salary into a designated superannuation fund by the 28th day of each April, July, October and February, or
  • to, as required by the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Charge Act 1992, lodge a superannuation guarantee statement and pay superannuation shortfall (including choice liability), interest chargeable and any administration fee by the 28th day of each May, August, November and February.

The Society already has such details from a number of practices and will be in contact with each of those to discuss this policy.

The policy will commence operation on 1 March 2021. It is only an unremedied failure to meet the obligations in existence on that date or a failure that comes into existence thereafter that need be declared.

Any enquiries should be referred to Craig Smiley, General Manager Regulation, (c.smiley@qls.com.au) or Bill Hourigan, Manager Trust Account Investigations (b.hourigan@qls.com.au).

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