2026 SMSF Annual Return: Two Audit Reporting Changes Every Trustee Must Know Before Lodgement

The Australian Taxation Office (ATO) has published an important update on 2026 SAR changes affecting SMSF audit reporting. The update outlines changes to the 2026 Self-Managed Super Fund Annual Return (SAR) and instructions that affect audit fee labels and modified opinion reporting.

For SMSF trustees, accountants, tax agents, advisers and administrators, these changes are important to understand before preparing, reviewing or discussing 2026 SMSF annual return information.

Mint Super Audits is an independent SMSF audit firm based in Melbourne, Victoria. We provide SMSF audit services for trustees, accountants, tax agents, advisers and administrators across Australia.

Quick Answer

From the 2026 SMSF Annual Return, auditor fee labels H1 and H2 are mandatory. Auditor fees must be reported at these labels and cannot be left blank or reported elsewhere in the SAR. If only one of H1 or H2 applies, the other label should show zero. The ATO has also clarified that all modified opinions in the Independent Auditor’s Report (IAR), including qualified, adverse and disclaimer opinions, should be reported in the SAR.

ATO, SMSF Newsroom, 19 June 2026

Key Takeaways

• The 2026 SMSF Annual Return includes changes to audit reporting labels.
• Deductible and non-deductible auditor fee labels H1 and H2 are now mandatory.
• Auditor fees must be reported at H1 and H2, not elsewhere in the SAR.
• If only one of H1 or H2 applies, the other label should be completed with zero.
• Label 6 instructions now make it clearer that all modified opinions in the Independent Auditor’s Report should be reported.
• Modified opinions include qualified, adverse and disclaimer opinions.
• Trustees, accountants, tax agents and professionals who review SAR information should understand the 2026 SAR instructions.

Summary of 2026 SAR Audit Reporting Changes

Reporting Area	2026 SAR Change	Practical Meaning
H1	Mandatory label	Report deductible auditor fees at this label.
H2	Mandatory label	Report non-deductible auditor fees at this label.
H1/H2 blank fields	No longer acceptable	If one label does not apply, report zero at the other label.
Other SAR labels	Not to be used for auditor fees	Auditor fees should not be reported elsewhere in the SAR.
Label 6	Instructions clarified	All modified opinions in the IAR should be reported in the SAR.
Modified opinions	Includes qualified, adverse and disclaimer opinions	Review the final Independent Auditor’s Report before lodgement.

What Has Changed in the 2026 SMSF Annual Return?

The 2026 Self-Managed Super Fund Annual Return and instructions include changes to the labels used to report the annual SMSF audit.

According to the ATO, the two key changes are:

1. Auditor fee labels H1 and H2 are now mandatory.
2. SAR instructions for label 6 now make it clearer that all modified opinions in the Independent Auditor’s Report should be reported.

Although these changes may appear administrative, they are important because they affect how SMSF audit-related information is reported in the annual return.

H1 and H2 Auditor Fee Labels Are Now Mandatory

One of the main 2026 SAR changes affecting SMSF audit reporting is that the deductible and non-deductible auditor fee labels, H1 and H2, are now mandatory.

This means the fee paid to the auditor for completing the annual SMSF audit must be reported at these labels. It can no longer be left blank or reported at another label in the SAR.

The ATO has explained that this change should improve the visibility of audit fees reported in returns and support more consistent fee reporting across the SMSF sector.

Understanding the 2026 SAR changes affecting SMSF audit reporting is essential for anyone involved in preparing or reviewing SMSF annual returns this year.

What Are H1 and H2 in the SMSF Annual Return?

In the 2026 SMSF Annual Return:

• H1 refers to deductible auditor fees.
• H2 refers to non-deductible auditor fees.

If both labels apply, the relevant amounts should be reported at each label. If only H1 or H2 applies, the other label should be completed with zero.

For example, if an SMSF only has an amount to report at H1, H2 should not be left blank. Instead, H2 should show zero.

Trustees and tax professionals should confirm how auditor fees have been classified for SAR reporting purposes and seek professional tax guidance where required.

Why the H1 and H2 Changes Matter

The mandatory H1 and H2 labels are designed to make auditor fee reporting clearer and more consistent.

For trustees, accountants and tax agents, the practical message is simple: auditor fees should be checked carefully before the 2026 SAR is lodged. Leaving the labels blank or reporting auditor fees elsewhere in the SAR may no longer align with the 2026 SAR instructions.

Label 6 and Modified Opinions in the Independent Auditor’s Report

The second key change relates to label 6 in the SAR instructions.

The ATO has clarified that all modified opinions in the Independent Auditor’s Report, also known as the IAR, should be reported in the SAR.

Modified opinions include:

• Qualified opinions
• Adverse opinions
• Disclaimer opinions

This means trustees, accountants, tax agents and administrators should review the final Independent Auditor’s Report carefully before completing or lodging the SMSF Annual Return.

What Is a Modified Opinion?

In general terms, a modified opinion is an audit opinion that is not an unmodified or clean opinion.

A qualified opinion may indicate that the auditor has identified a specific issue or limitation in relation to the audit.

An adverse opinion is generally more serious and may indicate that the auditor considers certain information to be materially misstated or non-compliant.

A disclaimer of opinion may occur where the auditor is unable to obtain sufficient appropriate audit evidence to form an opinion.

These are technical audit matters. If a modified opinion appears in an Independent Auditor’s Report, trustees and advisers should seek guidance from appropriately qualified professionals.

What This Means for SMSF Trustees

For SMSF trustees, the key task is to ensure audit-related information is complete and consistent before the SAR is lodged.

Trustees may need to check that:

• The annual SMSF audit has been completed.
• The auditor fee information has been provided to the accountant or tax agent.
• H1 and H2 have both been completed as required.
• Zero has been entered where one of the mandatory labels does not apply.
• The final Independent Auditor’s Report has been reviewed.
• Any modified opinion in the IAR has been identified and reported in accordance with the SAR instructions.

Trustees should avoid assuming that the 2026 SAR can be completed in the same way as prior years without reviewing the updated instructions.

What This Means for Accountants and Tax Agents

For accountants and tax agents, these changes are particularly relevant when preparing or reviewing 2026 SMSF Annual Returns.

Before lodgement, it may be useful to confirm:

• Whether auditor fees have been reported at H1 and H2.
• Whether either H1 or H2 has been incorrectly left blank.
• Whether zero has been entered where only one label applies.
• Whether auditor fees have been incorrectly reported at another SAR label.
• Whether the Independent Auditor’s Report includes a modified opinion.
• Whether label 6 has been completed consistently with the final audit report.

The ATO has specifically reminded those who review return information or discuss SAR reporting with trustees or tax agents to understand the 2026 SAR instructions and the changes that apply this year.

Common Mistakes to Avoid

The 2026 SAR changes mean some previous reporting habits may need to be updated.

Common issues to avoid include:

• Leaving H1 or H2 blank.
• Reporting auditor fees at another SAR label.
• Failing to enter zero where only one auditor fee label applies.
• Overlooking a modified opinion in the Independent Auditor’s Report.
• Assuming label 6 only applies to certain types of modified opinions.
• Lodging the SAR before confirming the final audit report details.

2026 SAR Audit Reporting Checklist

Use this checklist as a general guide when reviewing audit-related SAR information:

• Confirm the annual SMSF audit has been completed.
• Confirm the auditor fee amount paid or payable.
• Confirm how auditor fees have been classified for SAR reporting purposes.
• Complete both H1 and H2 as required.
• Enter zero where one of the mandatory labels does not apply.
• Review the final Independent Auditor’s Report.
• Check whether the IAR includes a modified opinion.
• Report modified opinions in accordance with the 2026 SAR instructions.
• Keep appropriate audit and SAR records with the SMSF documentation.
• Seek professional advice if uncertain.

Frequently Asked Questions

Keeping up with the 2026 SAR changes affecting SMSF audit reporting is a key responsibility for all SMSF professionals.

Related Reading

Learn more about SMSF compliance and audit requirements:

• ASIC Cracks Down on 64 SMSF Auditors: What It Means for Your Fund’s Compliance
• Division 296 & Your SMSF Audit: What Trustees Must Prepare for in 2026

How Mint Super Audits Can Help

Preparing your 2026 SMSF audit file?

Understanding the 2026 SAR changes affecting SMSF audit reporting is the first step.

Mint Super Audits provides independent SMSF audit services for trustees, accountants, tax agents, advisers and administrators across Australia. Our team supports clients with clear communication, efficient audit processes and independent SMSF audit services.

If you need support with your annual SMSF audit or want to discuss your audit requirements, book a free 30-minute discovery call with Mint Super Audits.

Book a Discovery Call with Mint Super Audits today.

Reference

Australian Taxation Office, “2026 SAR changes affecting audit reporting”, SMSF newsroom, published 19 June 2026.

Disclaimer

This article is general information only and does not constitute financial, tax or legal advice. SMSF trustees should seek advice from a qualified professional based on their individual circumstances.