Business guide to Coronavirus

Could JobKeeper lead to an ATO audit?

By late May, more than 750,000 businesses and sole traders affected by the COVID-19 crisis had made claims under the JobKeeper program. But should businesses prepare for an audit and potential repayments once the scheme ends in September? Accountant Daniel Pluta shares his thoughts.

Thousands of Australian enterprises were forced to scale back or shutter their operations in late March after sweeping shutdown measures to slow the spread of COVID-19 were introduced. With millions of workers facing an uncertain future, the federal government launched JobKeeper, a temporary wage subsidy to help keep people employed.

To access the scheme, eligible businesses with turnover of less than $1 billion had to estimate a fall in turnover of at least 30%, relative to a comparative period. As the economy begins to open up again, it’s still a crucial financial lifeline, allowing businesses to keep their teams intact and to plan for the future.

What are the chances the ATO will come down on those that engaged with the scheme at the end of the payment period in September? According to Pluta Accountants partner Daniel Pluta, only those who’ve manipulated their figures to meet the scheme’s eligibility requirements may face some hard questions down the track.

“Governments don’t just hand out money without there being some accountability for it,” Pluta says. “Over the next few months, the ATO will have programs in place to see how JobKeeper funds were spent to make sure the correct people got it and were eligible in the first place.”

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Eligibility under the microscope

Of interest are likely to be enterprises which operate in industries that haven’t been demonstrably affected by the virus. Hairdressers could be one example, Pluta says. While initially slated for closure, they were subsequently deemed an essential service and allowed to continue operating through the April and May shutdown period.

Businesses accessing JobKeeper are required to report their turnover monthly. So, a sharp drop one month followed by a major upswing the next could be a red flag for auditors if there’s not a reasonable explanation for the variation.

“It could be that a company has held off on invoicing or entered into an arrangement with suppliers to try to manipulate those figures and that’s certainly not something they want to see happening,” Pluta says.

“As with all government incentives and schemes, there are procedures to ensure funds are used properly and procedures to get the money back, if necessary,” Pluta says. “The ATO has that power and we expect they’ll use it for people who aren’t doing the right thing.”

The power of professional advice

Consulting your accountant or bookkeeper is the best way to ensure you don’t end up in difficulties over JobKeeper. Ideally, you’ll have done so before signing up to the program.

“The rules are complicated and I have heard of instances where businesses have registered without fully understanding the conditions of eligibility because of fear of missing out,” Pluta says. “If you’ve done that, you should seek advice.”

Working through the conditions with a professional can give you peace of mind that you’re entitled to any funds you access to help your business through these challenging times.

JobKeeper still provides vital support for thousands of Australian businesses during the COVID-19 crisis. Making sure you’re fully eligible for any assistance you receive can help your business move towards the future with more confidence.

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