Accountancy Insurance director Roman Kaczynski noted that while ATO audit activity is significantly down on previous years due to COVID-19, JobKeeper reviews have continued to feature over the last few months as the Tax Office looks to weed out fraudulent arrangements.
“A lot of them are just the Tax Office looking for validation — give us employee details, give us copies of bank statements to show you’ve got revenue coming in and there are records of payslips going out, employee nomination forms for JobKeeper, show us the employment declaration forms to prove that you’ve actually signed this person up, and contracts of employments,” Mr Kaczynski told Accountants Daily.
“Some applications don’t match records the ATO has had in the past, and we see, for example, the data for employees don’t match previous BASs and previous STP records.
“These include when BASs have had no wages on them and no sales on them and they have now been changed to include some wage and some sales — those are odd ones, but we’ve seen them a couple of times.”
Such JobKeeper reviews have seen the ATO place 24,000 businesses in “suppression” — Tax Office lingo for when applications have been held up until further eligibility proof is provided by the applicant.
For JobKeeper reviews that have been initiated after payments have been made, the ATO has since declared they will not seek to claw back payments where an honest eligibility mistake has been made.
Mr Kaczynski anticipates such JobKeeper audits to feature strongly once the $101.3 billion program comes to an end in March 2021, and believes accountants should err on the side of caution when handling applications for clients.
“For employer obligations and JobKeeper issues, because the ATO is so data-rich, there is a sense of warning or stating the obvious that it doesn’t pay to try and engineer a position. My advice is that it’s just not worth it,” he said.
“Even the JobKeeper questionnaire that the ATO requires to be filled in, they are looking for attribution — you have to nominate who is the person in the organisation that made the final decision as to whether you should apply for JobKeeper, and then they also ask if you’ve got advice from an external party, can you please name who that person was. So, they are looking to capture some data to maybe utilise if things aren’t straight up and down.”
Biggest audit type for 2020–21
For the year ahead, Mr Kaczynski also believes accountants should be on the lookout for employer obligation audits and reviews, with such audits accounting for one in five Accountancy Insurance claims in the last financial year.
“The biggest thing we’ve seen pre-COVID and for the last couple of years has been the employer obligation audits of PAYG, super and FBT,” Mr Kaczynski said.
“They were the biggest audit type for both this year and last and that never used to be. If you go back to previous years, the pre and post-assessment of BASs were the most common category and that’s been dethroned by employer obligations, and we think that’s come as a result of Single Touch Payroll being introduced.
“They have live data now and when you put SuperStream into the mix as well, suddenly the ATO has all the information at their fingertips so they can see what super should have been paid and they can see what was paid.
“In the past, they used to rely on disgruntled employees nominating their previous or current employers for audits, now they don’t need that at all.”
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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.