Red flags that could put your business under ATO scrutiny for JobKeeper payment audits
18 March 2021
With so many businesses claiming JobKeeper, the ATO is busy conducting JobKeeper compliance activities to confirm the businesses that claimed JobKeeper were in fact eligible to receive the claimed JobKeeper subsidy.
There are a number of common red flags the ATO will look out for that may prompt further scrutiny from them. These include:
Employees included in applications that appear to have been linked to the employer after 12 March 2020 or after 1 July 2020 for employees claimed to be eligible from that date.
Applications by employers that include claims for employees, but no amounts have been reported in Single Touch Payroll (STP), including where employees were terminated in an earlier fortnight.
Employers that have reported sales revenue on BAS that do not indicate that their turnover has reduced.
Employers that have claimed more JobKeeper payments for employees than the amount reported as wages in their BAS for corresponding period/s.
Other specific red flags that are likely to attract the ATO’s attention include situations where:
An individual (e.g. a sole trader, a director of a company or a partner in a partnership) claims JobKeeper more than once. For example, where an individual claims JobKeeper both as an employee of one business and as an eligible business participant for another business, or where an individual who is a director of multiple companies, claims JobKeeper as an eligible business participant in more than one company.
Multiple family members claim JobKeeper while prior to JobKeeper only one of the family members worked in the business. For example, where the husband and wife are both beneficiaries in a trust and the husband claims JobKeeper as an employee of the trust while the wife claims JobKeeper as an eligible business participant in the trust.
Turnover is adjusted by deferring issuing invoices or bringing forward receipts to ensure there is a decline of at least 30% to qualify for JobKeeper.
If you believe any of these situations apply to your business, please speak to your adviser about the possibility of taking out audit insurance in case of ATO compliance activities. For any other JobKeeper issues or questions, please contact the Findex Tax Advisory team.