The ATO administration of the JobKeeper on behalf of the Federal Treasury, is bordering on being objectionable.
The ATO’s most recent release in the form of a Law Companion Ruling, ‘LCR 2020/1: JobKeeper payment – decline in turnover test’ follows hot on the heels of their Anti-Avoidance furore in their Practical Compliance Guidance PCG 2020/4 and supporting legislative Regulations issued 1st May 2020. Refer bottom of below newsletter.
These documents, issued 1st May 2020 and 4th May 2020, both take backdated effect from 9th April 2020, creating therein a risk of error in transactions/claims which have already been lodged via the Single Touch Payroll system.
The ATO has attempted to clarify what would or would not be captured as intentional breaches of the Law within the hastily prepared JobKeeper scheme. However due to the effective dates being 9th April 2020, taxpayers will have unwittingly lodged JobKeeper claims which have been clarified to be in error and now may find themselves on the wrong side of the Law. Furthermore, the JobKeeper system, in its current form, does not offer such Taxpayers options on how to correct or rebate back an error.
In short, ignoring contrived schemes that attempt to create JobKeeper eligibility, (e.g. manipulating invoicing or commercial arrangements) there is in particular within the above guidance an inherent risk for ‘dedicated Employer entities’ that:
- Are part of a Consolidated Tax Group, capable of being part of a Consolidated Tax Group, or are part of a GST Group.
- Do not have external customer to that group.
- Do not provide services (i.e. only provide labour hire) to that aggregated group.
If you fall into one of the preceding categories you will likely be on the ATO radar, so record keeping around JobKeeper must be reassessed to take into account the changes and retained in retrievable form in order to support your claims should the ATO come knocking.
Date of Issue: 6 May 2020 Author: Noé Vicca
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