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Jason G

Apr 03, 2024

High / Non-Arm's Length Accounting Fees

in SMSF Technical Forum

I am auditing an SMSF of an accountant.

The accountant prepared his own SMSF's financials, tax return and general admin and charged $8,000 (from his accounting firm that he owns) for one financial year. It is a small fund with shares and cash. Total balance is around $20,000 at 30 June 2023.

I've never seen an SMSF charged $8,000 for one year; certainly not for such a simple fund.

My question is, what is the reference point to determine that fees are not arm's length? Is this a matter of professional judgement? And am I supposed to determine what the fund should have been charged?

Not sure how to best proceed other than qualifying S1.09 and lodging an ACR.

Any guidance will be much appreciated, thank you.

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Nicole White

Apr 29, 2024

When I recently had my personal fund audited, I provided the auditor with my detailed timesheet (WIP report) as well as the tax invoice for accounting/taxation fees charged by my firm so that they could see that the invoice agrees to the timesheet. Hourly rate was charged at the same rate as we charge other clients. We don't work on a set fee as such, it depends on how much time is involved. So I would be asking for a detailed timesheet or WIP report that shows what was done, the times and dates and the charge out rate.