JobKeeper: Thousands of sole traders hit with audits and told they may need to repay wage subsidies

Small business ombudsman Kate Carnell has urged the tax office to resolve questions about the eligibility of sole traders for JobKeeper payments after reports surfaced that thousands of business owners were warned they may need to repay wage subsidies.

Sole traders have been taking to social media and Australian Taxation Office (ATO) forums in recent days to express their frustration with correspondence notifying them of audits, and in some cases reportedly suspending their payments altogether.

Separate reports in The Guardian and the Sydney Morning Herald on Thursday cited cases of businesses being told by the ATO they were ineligible for JobKeeper because their business began operating after July 1 last year.

According to the SMH, some 8000 businesses have been told they may need to pay the wage subsidies back to the ATO.

It came after several sole traders took to Facebook earlier this week to report similar correspondence from the ATO. One business owner said they were told they would have to pay back about $6000 in wage subsidies.

“I was just informed today that i am no longer entitled to anymore jobkeeper, and that i have to pay back to ATO $6000 holy hell….it took them since March to work this out now?” one business owner said in a thread with more than 100 comments.

Others have taken to the ATO forums, where there have been several complaints about heavy handed tactics.

“I received an email from ATO saying that I am ineligible as I don’t have a comparison period in 2019. Hence I submitted an application objecting the outcome asking for a review with all my income details thus far,” one sole trader said.

The enforcement action comes just over a week after the ATO published a statement on its website warning businesses about forthcoming reviews to their JobKeeper enrolment and declaration forms.

It appears in many cases sole traders have enrolled in JobKeeper under the headline turnover test, rather than alternative test criteria, which would allow them to access the program if they were trading less than 12 months.

Speaking to SmartCompany about the enforcement action on Thursday, Australian small business ombudsman Kate Carnell said the ATO must resolve the issue as quickly as possible.

“Certainly our view was that if a business could show it was up and running and that it was trading, e.g. they had some sales prior to March 1, that they were in,” Carnell says.

“People are living on this money — this is food and rent and all the rest of it as they try to keep their businesses afloat.

“Instead of suspending, they [the ATO] should be investigating and only suspending if its found they are ineligible,” Carnell says.

More to come …

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