The Treasury’s review of the JobKeeper program, along with the government’s redesign and extension of the wage subsidy scheme to 28 March 2021, has failed to pick up on calls for an amendment to be made to the restrictive notice period requirement.
Entities seeking entitlement based for a business participant are currently required to have notified the ATO of taxable supplies made before 12 March, leaving new businesses that have made taxable supplies on or after 1 January unable to qualify if they report on a quarterly basis, but eligible if they report on a monthly basis.
The strict application of the law has seen the ATO issue 8,000 letters to businesses, warning them that they may not have satisfied the JobKeeper entitlement requirements.
CPA Australia tax policy adviser Elinor Kasapidis said it was disappointing that the government had failed to heed the advice from the nine professional bodies.
“While we welcome the extension of JobKeeper, we are disappointed that there has been no relief for new businesses operating since January 2020 who have missed out on the federal government’s stimulus measures to date,” Ms Kasapidis told Accountants Daily.
“The Treasury review report did not acknowledge the situation of new businesses and the lack of support available simply due to their election to report quarterly instead of monthly. Their situation is exacerbated where ineligibility for federal government packages also means they can’t access state-based support.
“We have suggested the Commissioner of Taxation be allowed to consider other forms of evidence in determining eligibility. However, this hasn’t been addressed in the recent announcements. We recommend this is considered when drafting the legislation and rules for the JobKeeper extension.”
Likewise, Chartered Accountants Australia and New Zealand tax leader Michael Croker said new businesses and start-ups would be disappointed by the outcome.
“This is no policy oversight,” Mr Croker said.
“Rather, it appears to reflect the triumph of bureaucratic, systems-based thinking: if the ATO computer has no evidence of business activity (gleaned from a BAS or income tax return), then the computer says ‘no’ to JobKeeper.
“Sure, pop-up employer and pop-up employee JobKeeper rorting arrangements needed to be stopped. But there are many aggrieved, genuine start-ups (and their advisers) currently knocking on the door of the Inspector-General of Taxation.”
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.