JobKeeper Payment Scheme – Surviving an ATO Audit

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 As part of the ongoing efforts to promote employee wellbeing and healthy business practices, the Australian government has announced the JobKeeper Payments Scheme, which is expected to keep at least 6 million Australian workers in paid employment.

 What is the JobKeeper Payment Scheme?

 According to the JobKeeper Scheme, employers should pay each eligible employee $1500 every fortnight before tax. The JobKeeper Payment Scheme has been allocated a total budget of 130 billion dollars and is available for business owners and self-employed individuals who have been affected by the COVID-19 outbreak.

 The primary aim of the JobKeeper Scheme has been to help employers sustain an ongoing relationship with their employees so that they can resuscitate their business without being forced to hire new employees.

 Who Is Eligible for the JobKeeper Payment Scheme?

 Your business needs to meet the following criteria to be eligible for the JobKeeper Payment Scheme:

  • The total turnover should be less than 1 billion dollars and the revenues should be reduced by at least 30 percent during the COVID-19 period.
  • If your business’s total turnover is more than one billion dollars, the revenues should have decreased by 50 percent or more
  • Your business should not be subject to Major Bank Levy.

Why Is It Important to Preserve All Records?

Keeping in mind the problematic effects of COVID-19, the ATO (Australian Tax Office) has promised an understanding approach while reviewing JobKeeper turnover projections. However, the ATO has also suggested that business owners be vigilant about preserving all documentation on a day-to-day basis.

If the ATO determines that you do not meet the JobKeeper’s Payment Scheme requirements, you may be liable to return all the payments and pay interest and any fines that may be levied.

To survive an ATO audit and demonstrate compliance, business owners need to provide all documentation to corroborate the information in their applications for JobKeeper payments.  Business records are particularly crucial for proving a reduction in revenues. Your documents need to demonstrate how you calculated GST for the turnover test period.

What Evidence Can You Present to Demonstrate That Your Business Lost Revenues?

 The ATO needs to be satisfied that your documentation is reliable and compliant with their eligibility criteria. You need to provide documentation that:

  • Customers were cancelling or deferring orders since March 1, 2020
  • The business was forced to pause or shut down due to COVID-19 related restrictions 
  • Your business is reliant on tourism (for example, hotels, resorts, etc.)
  • There were delays in being able to procure raw material or trading stocks

Also, please keep in mind that although the JobKeeper Payment Scheme is slated to run until September 2020, the ATO audits and reviews will continue for a considerable period of time.

 Competent Legal Assistance Can Make It Easier for You

 If you need assistance with filing your application for the JobKeeper Payment Scheme, our experienced legal team at Owen Hodge Lawyers is more than happy to help you. Please call us on 1800-770-780 for more information regarding our extensive range of legal services.

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