“Expect to hear from us”: ATO sounds warning on dodgy JobKeeper applications, foreshadowing audits and clawbacks

The tax office says employers who suspect they’ve made an error on their JobKeeper applications should come forward voluntarily, or risk being caught in a forthcoming compliance push.

The Australian Taxation Office (ATO) will be combing through hundreds of thousands of JobKeeper applications in the coming months to identify where businesses may have went wrong with their eligibility assessments.

Under the $70 billion wage subsidy scheme, employers submitted self-assessed applications declaring their turnover had fallen by 30% or more against a suitable comparable period. Payments then started flowing once a secondary declaration process was completed.

But it’s entirely possible many businesses were accepted into the program having either made mistakes on their enrolment forms, or having intentionally misrepresented their business circumstances to get access to the payments.

It became evident the ATO was not closely scrutinising enrolment forms in May, when it admitted hundreds of sole traders had filed applications saying they employed more than one thousand workers — mistakes discovered several weeks after the fact.

This is changing; ATO deputy commissioner Will Day says the tax office has already received intelligence reports about schemes designed to rort the program, and will be conducting audits of JobKeeper payments and other COVID-19 related stimulus measures.

“We will generally operate on the basis Australians are honest, meaning we will accept the information we are provided with as true and correct and make payments,” Day said in a statement.

“However, we will be conducting checks later, so if you’ve received a benefit as part of the COVID-19 stimulus measures and we discover you are ineligible, you can expect to hear from us.”

Day says businesses that may have broken the rules, intentionally or otherwise, should come forward voluntarily.

“It is much better to come forward to make a voluntary disclosure than waiting to be audited. If in doubt on how to proceed, we recommend seeking the advice of a tax professional,” Day said.

In particular, the ATO said it wants to make sure businesses recieving JobKeeper payments are:

1. Eligible in relation to their business income (i.e. 30% turnover decline);
2. Claiming payments for eligible employees;
3. Making correct claims; and
4. Not manipulating their turnover to satisfy the 30% turnover test.

Penalty wise, the ATO is able to take businesses off JobKeeper if they identify an issue and claw back payments that have been issued.

Given the quantum of the wage subsidies, $1,500 per eligible worker each fortnight, back-payment claims could cripple a business, so the stakes are high.

The ATO has previously said it will not employ a punitive compliance approach for businesses that have made genuine mistakes on their JobKeeper applications.

Single Touch Payroll data, income tax returns and information reported via superannuation funds is being used to inform the ATO’s investigations, which means they can essentially see everything they need to in order to work out whether a business has made an incorrect claim.

The ATO has published a detailed report about some of the schemes that businesses may be using to incorrectly access JobKeeper payments.

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