ATO confirms ‘Sympathetic’ approach on JobKeeper turnover review
More than 768,000 businesses, covering 5 million employees, have enrolled for the JobKeeper payment.
The Australian Taxation Office (ATO) have committed to adopting a “sympathetic and understanding” compliance approach to firms that make mistakes on their JobKeeper applications, when reviewing JobKeeper turnover estimates. However the ATO will be ‘forceful’ in cases where businesses fail to pass on wage subsidies to workers, second commissioner Jeremy Hirschhorn said.
With JobKeeper requiring businesses to work out their projected turnover decline to determine eligibility, there have been concerns from employers that the ATO might come knocking when their actual turnover reveals a healthier figure.
Mr Hirschhorn told a Senate inquiry he was aware of community concerns that the ATO might be “nit-picking” when it comes to the decline in turnover test.
“In the legislation, it asks people to make a reasonable estimate and a reasonable estimate is what is sufficient,” Mr Hirschhorn said.
“If it ultimately turns out that the estimate was overly pessimistic and a business only went down 29 per cent, instead of an estimated 35 per cent, that is OK; what the legislation requires is a reasonable estimate.”
“Obviously, there are a range of consequences if people apply and they are not eligible, but where people make a good-faith estimate to comply and a good-faith decision that they are eligible, the commissioner will be very understanding and sympathetic to their position, particularly where they have passed the benefit of the JobKeeper payment to their employees.”
“What the legislation and what we are asking of businesses is to make a good-faith effort and that when we consider their good-faith effort, even if it is a little bit wrong, we’ll be very sympathetic and understanding of their position.”
Jeremy Geale (ATO COVID-19 taskforce chair ) also reaffirmed the agency’s approach.
“In terms of our attitude to compliance, this program is about helping Australians who are experiencing financial difficulty and it is not drawn at the hard line in terms of 30 per cent where I go out and investigate the person who is sitting at 29.95 per cent,” Mr Geale said.
“The focus is on people who will be deliberately rorting the system.”
The ATO confirmed on Thursday it is moving “hundreds” of staff into JobKeeper compliance and enforcement duties over the coming months.
However, the ATO said it will “generally not apply” its compliance resources in cases where:
- The external operating environment is affected by factors beyond the control of the entity (and its related parties); and
- That affected external operating environment significantly impacts the business of the entity or another entity the entity’s employees serve in; and
- The JobKeeper payment the entity receives is for individuals who were employed by the entity and serving in the significantly impacted business prior to that time and who remain employed as a result of that JobKeeper payment.
Please contact Holmans if you have any queries or concerns about your businesses eligibility, how turnover requirements apply or haven’t received your first months JobKeeper reimbursements yet.
Importantly, where your business circumstances have now changed and you believe you will now qualify (turnover down by 30%), contact Holmans and we will assist you with the assessment and registration process.