Accountants will need to consider the risks in issuing the new decline in turnover certificates for JobKeeper legacy employers as it brings the profession into closer interaction with the Fair Work Act.
Accountants cautioned on decline in turnover certificates
With the extension of JobKeeper to 28 March 2021 now in place, the government has provided a concession for employers who are no longer able to satisfy the requisite JobKeeper decline in turnover test to continue accessing temporary Fair Work Act provisions if they are experiencing a 10 per cent decline in turnover.
To continue being able to give JobKeeper enabling directions, employers will need to acquire a 10 per cent decline in turnover certificate from either a registered tax agent, a BAS agent or a qualified accountant.
Small businesses with fewer than 15 employees will be allowed to provide a statutory declaration instead of obtaining the decline in turnover certificate.
The Tax Institute’s senior advocate, Robyn Jacobson, told Accountants Daily that practitioners should consider a number of issues before looking to provide such certificates.
“My main concern is that this is now moving outside of the tax legislation and the JobKeeper rules; this 10 per cent decline in turnover certificate is issued under the Fair Work Act, so accountants will be required to operate under the Fair Work Act and this is an area of legislation that most accountants are unfamiliar with and not qualified to provide advice on,” Ms Jacobson said.
“They are not specifically providing advice on a Fair Work arrangement, but the fact that the certificate is issued under the Fair Work Act means the accounting profession will be coming in much closer contact with the act from a professional standpoint than they have previously.
“The questions I would be asking are, what are the risks for accountants to operate under the Fair Work Act, what are the defences available to them where they get it wrong, notwithstanding that they have applied reasonable care and diligence, and to what extent will accountants be exposed to liability where in good faith they have relied on information provided by their clients?”
Penalties have been embedded into the legislation for employers who provide false or misleading information to accountants in order to satisfy the 10 per cent decline in turnover test, including a maximum civil penalty of 60 penalty units for individuals or 300 penalty units for a corporate entity.
Ms Jacobson also noted that minor amendments to the bill now make it clear that practitioners who provide such certificates are not required to conduct an audit or undertake an assurance engagement.
The amendment replaces the words “in the opinion of” with “confirms that” in the bill.
“This ensures that the test has been met on the information provided and that it doesn’t constitute an audit or an assurance engagement, and that's an important distinction,” Ms Jacobson said.
Amendments to the bill have also removed registered company auditors and tax (financial) advisers from being allowed to issue the decline in turnover certificate “to ensure that only those professionals with the most appropriate skills and expertise are able to”.