The Australian Taxation Office (ATO) will be looking into JobKeeper Payment compliance despite taking an initial “understanding and sympathetic” approach when reviewing the turnover projections. Whether you choose to document your information within your own records or have your accountant take care of this process, the emphasis is on ensuring that in the event of an audit, you have accurate and compliant information.
The JobKeeper Payment Scheme
By now, you would have received a lot of information about this scheme. Essentially, there are two main ways to determine if your business is eligible, depending on how the COVID-19 period has affected your business.
These would be calculated through determining your turnover test using the Basic or Alternative test methods. With these tests, eligibility for the Scheme only needs to be proven once. Monthly declarations also need to be completed by the 14th of each month to ensure that you remain compliant.
What Are the Chances of an ATO Audit?
The Tax Institute’s senior tax counsel, Professor Robert Deutsch, explained in a recent interview with Accountant’s DAILY that the ATO will be auditing on JobKeeper applications. He also stated in the same interview that it was not something that would be done immediately. For many, this may seem like an out of sight, out of mind response, but with audits in the future, ensuring that the correct compliance information is kept means that you will not be required to pay back unqualified for Scheme payments and potential penalties.
By looking at international trends, for example with our closest neighbours New Zealand, audits are picking up on those who are not eligible to be claiming the schemes. The New Zealand Inland Revenue Department clawed back approximately $17 million from their wage subsidy scheme in the first week of audit activity.
Sue Williamson, a tax partner at EY, estimates that it is only a matter of time until the ATO begin the same process – and we tend to agree. In a recent article, she states that “the message can’t be clearer: now is the time to check that you have everything in place to support your claims.”
How to Prepare
As of late last month, 540,000 employers had registered for the JobKeeper Payment Scheme, collecting payments for 3.3 million employees. With the number of employees claiming scheme estimated to reach 6 million, it is important to not only double check your eligibility as an employer but also that of your employees. Furthermore, documenting the eligibility information is a must, especially in the event of an audit.
The ATO have warned that those trying to make payment claims where they are not intitled to them will be “swiftly penalised”. An example of an incorrect claim would be in manipulating turnover to meeting the 30% (or 15% or 50%) reduction test.
Further guidance from the ATO on these integrity measures can be found here.
If you want to ensure your compliance is up to date with your JobKeeper Payment Scheme in the event of an audit or if you are wanting to make it count in your business as we step into a new normal, contact our office today on 07 3367 3122 or by emailing email@example.com.