Recently the ATO has confirmed that they will begin to notify selected businesses using JobKeeper which they consider not to have satisfied the entitlement requirements.
The ATO believe many participants have already received JobKeeper payments and the ATO correspondence/press releases indicates such payments will now cease with immediate effect.
In addition, the ATO will be reviewing and/or investigating other participants to verify sales/turnover reported statistics with actual data, including a review of income tax returns and other reporting mechanisms.
Some examples may include:
- New businesses that have commenced from 1 January 2020 who are not registered for GST or are registered for GST on a quarterly cycle.
- New businesses that have commenced from 1 July 2019 who are registered for GST on an annual cycle.
- Businesses that have not included assessable income in their 2018–19 tax return or not provided the ATO with notice of sales or supplies made in the relevant period.
- Businesses who have been registered for GST since 1 July 2019 on a monthly or quarterly basis but have not provided the ATO with notice of sales or supplies made in the relevant period.
- Businesses who have reported sales/turnover that is not benchmarked with the existing business reporting and/or as a comparison to other taxpayer businesses in similar fields of operation.
Similarly, the ATO have indicated there are many businesses that were in operation as at 12 March 2020 who had made taxable supplies and were reporting PAYG withholding amounts that may not or did not qualify for Cash-Flow Boost payments.
The financial and emotional impact that the ATO payment audit/review or cessation letters will have on business operators who had already received JobKeeper or Cash-Flow Boost payments is expected to be substantial.
As such, we recommend you continue to maintain accurate reporting details of all submissions made to ATO for JobKeeper and Cash-Flow Boost and contact us should you receive any direct correspondence from the ATO.
Keep safe and kind regards
Barrie Pike and Kevin Prout