The Australian Taxation Office (ATO) has begun conducting compliance activities in relation to the JobKeeper scheme. If you have received JobKeeper payments and were not entitled to it, you will be required to return the payments with interest and penalties.
If you have made genuine mistakes, the ATO has stated they will be reasonable and will help you resolve any issues. They do not want employers to worry about accruing a debt or being penalised for genuine mistakes. However, employers who have intentionally submitted false claims for JobKeeper will be subject to harsh penalties.
What documentation you should have
Documentation supporting the key criteria of the JobKeeper scheme should be maintained and readily available in the event of a compliance review by the ATO. The better your documentation, the easier it will be to demonstrate that any errors or omissions are genuine mistakes.
1. Documentation to support a 30% decline in turnover
The decline in turnover test will be a main area of focus by the ATO, particularly in industries that are not recognised as being affected by COVID-19 and/or where the employer’s BAS does not reflect a 30% decline in turnover.
Employers must have written evidence of the methodology adopted to verify the decline in turnover. This includes the assumptions and projections that it relied on.
Where GST turnover was projected to decline the required 30% but the actual results did not (or the decline was not sustained), an analysis as to why the better-than-expected performance could not have been forecast should be maintained.
The ATO have identified several potential schemes where employers have sought to artificially move revenue to meet the decline-in-turnover test. These include: deferring or bringing forward supplies, the use of restructures (such as transferring assets to a new entity so that revenue is recorded in the new entity), deferring intercompany management fees and other charges, reducing payments to sub-contractors, and using JobKeeper to reduce the cost of supplies to customers.
2. Documentation to support that employees were on the payroll on 1 March
If your March payroll shows a spike in employees, as compared to earlier months or quarters, you should expect some scrutiny. For any new employees, collate employment contracts to demonstrate that the employees were employed on 1 March.
3. Completed employee nomination forms
The employee nomination form is critical to demonstrate that employees are not claiming the JobKeeper payment from multiple employers or while employed elsewhere. Employers do not want to be caught up in any fraudulent activities by their employees.
4. Evidence that JobKeeper payments were paid in advance and passed on in full
Bank records demonstrating payments were made and when will be important.
The expert team and Calibre Business Advisory can assist with reviewing the adequacy of your documentation or any other JobKeeper enquiries. You can reach out to us on 0292612177.