Apart from Victoria, where businesses are working towards a staged reopening plan, the ATO has begun reaching out to businesses in other parts of the country as part of its debt intervention activity restart after such compliance work took a back seat in light of the pandemic.
“We are just starting to re-engage with debt clients,” said ATO assistant commissioner Sylvia Gallagher at the Accountants Daily Strategy Week.
“As you would know, we haven’t really done a lot in terms of debt, and not in Victoria but for the rest of Australia, we want to make sure that people are starting to get back on track and we don’t want people to be in a worse position later on.
“We are starting a really soft re-engagement on debt to make sure we are just talking to people to understand where they are at, what their situation is, and just offering support is essentially what we’re doing so that people understand the support that is available to them.”
The confirmation comes after the ATO flagged the restart in early July, with the profession urging the Tax Office not to go “too hard, too early”.
The restart also follows an indication from the ATO that it would recommence audit activity by October, having previously redeployed its auditors to help with the rollout of COVID-19 stimulus measures.
‘Reasonable and flexible’
Ms Gallagher also re-emphasised the ATO’s commitment to adopting a sympathetic and understanding approach to its compliance activities, confirming that it would not look to claw back stimulus payments where an honest mistake had been made.
“Where we know that people have made honest mistakes in terms of the stimulus measures, we will work with taxpayers and business owners to avoid and overcome these honest mistakes and we will be reasonable and flexible,” Ms Gallagher said.
“We are not going to claw back money where someone has made an honest mistake and there is no malice.
“If we do detect deliberate fraudulent behaviour, we will recover payments and we will apply penalties, and in the most serious cases, we will pursue criminal prosecution.”
Ms Gallagher also noted that JobKeeper behaviours that will attract the ATO’s attention include payments to people who don’t meet eligibility requirements, falsifying records or revisiting activity statements to meet the fall in turnover test, applying for JobKeeper where there is no evidence of carrying on a business or there is no assessable income, employers failing to pass on the full payment to eligible employees, multiple eligible business participant claims and employees being incorrectly excluded under the “one in, all in” rule.
For the cash-flow boost, red flags include restructuring the business to gain access to the cash-flow boost, changing the character of salary and wages or inflating withholding amounts to maximise benefits, resurrecting dormant entities to obtain access to the cash-flow boost, and making false statements to the commissioner.
“We’ve got pretty good data analytics, and I think if people have honestly tried to do the right thing, we will work with tax and BAS agents and small business to determine that and if we don’t think that it is an honest mistake, then obviously, we’ll do something about that,” she said.
The virtual Accountants Daily Strategy Week 2020 continues on 9 and 10 September.
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.