The joint regulators have now sent a clear warning to tax agents and their clients that any attempt to change a business structure or change the characterisation of payments to access the government’s stimulus measures will be met with scrutiny and disciplinary action.
The warning comes after the profession was advised to steer clear of engaging in schemes to help clients access the government’s cash-flow boost measure, with promoter penalties, general interest charges and disciplinary action listed as potential consequences.
The professional accounting bodies had also warned that the marketplace was rife with strategies to help businesses fall within the eligibility criteria to access the payments of up to $100,000.
“The intent of the government’s relief measures is to help the economy withstand and recover from the economic impact of COVID-19 by supporting businesses to manage cash-flow challenges and retain employees,” a joint statement by ATO second commissioner Jeremy Hirschhorn and TPB chair Ian Klug said.
“We ask that tax agents and businesses be mindful that it is not acceptable to backdate or artificially change a business structure or employment arrangements, including changing the characterisation of payments, in order to obtain a benefit or payment that would not otherwise have been paid.
“The ATO and TPB will take firm and swift action should this be the case.”
In a bid to facilitate compliance, the TPB has now set up a hotline and tip-off mailbox to allow practitioners to blow the whistle on misconduct in the marketplace.
Likewise, the ATO’s online tip-off form will be available to practitioners, with all reports to be strictly confidential.
While acknowledging that most practitioners were applying the relief measures correctly, Mr Klug conceded that some advisers may need additional guidance from the ATO and the TPB.
“This is clearly a very challenging time for tax practitioners as they juggle the competing demands of dealing with the impacts of the COVID-19 pandemic on their own business while supporting their clients,” Mr Klug said.
“However, in the current environment, there is a risk of misconduct if tax practitioners defraud the stimulus package, intentionally or unintentionally.”
The joint statement added: “As trusted guardians of the tax and super systems, we all have an important role to play in helping Australia overcome these challenges.
“The best way forward is for all of us to work together to ensure the government measures are applied in accordance with their intent.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.