ATO warns ECEC and other employers that it will zero in on fraud come tax time
The Australian Taxation Office (ATO) has issued a statement indicating that close attention will be paid to fraud and schemes designed to take advantage of the government’s COVID-19 stimulus package come the end of the financial year, including JobKeeper, early release of superannuation, and boosting cash flow for employers.
ATO Deputy Commissioner Will Day said that the ATO knows the overwhelming majority of Australians are honest, but that the ATO also has “an important role to ensure the integrity of the stimulus measures and when we uncover fraud or people seeking to exploit them, we’ll take action, as we know the community would expect us to do.”
In order to ensure the integrity of the tax and superannuation systems, the ATO has access to a large number of data sources that it uses to assess the risk of inappropriate behaviour. These sources include Single Touch Payroll, income tax returns, and information reported to the ATO by super funds, as well as data from various third-party sources.
As well as these measures, the ATO also receives “valuable information” from the general public where there may be suspected wrongdoing.
“We’ve established a confidential tip-off line and we take all information referred to us seriously. If members of the community are concerned that someone is doing the wrong thing, they should tell us about it by completing a tip-off form online at ato.gov.au/tipoff or by calling 1800 060 062,” Mr Day said.
The ATO has also made it clear it will not tolerate illegal behaviour or development of schemes that are designed to deliberately exploit these measures, seek to avoid tax, or prey on vulnerable Australians.
“It’s important to carefully check eligibility requirements before applying for any of the measures. Eligibility requirements for each of the measures are outlined on the ATO’s website. If you’re not sure, the best thing to do is check with the ATO or your tax professional,” Mr Day added.
“Our tax system works on a self-assessment model. We will generally operate on the basis Australians are honest, meaning we will accept the information we are provided with as true and correct and make payments,” he said.
“However, we will be conducting checks later, so if you’ve received a benefit as part of the COVID-19 stimulus measures and we discover you are ineligible, you can expect to hear from us. If you think this may apply to you, you should contact us or speak to your tax professional.
“It is much better to come forward to make a voluntary disclosure than waiting to be audited. If in doubt on how to proceed, we recommend seeking the advice of a tax professional.”
Mr Day also reminded the community to protect their identities and be vigilant of scammers at this time.
What’s on the ATO’s radar?
The ATO’s compliance efforts for JobKeeper are focused on ensuring that:
- entities meet the eligibility requirements in relation to business income;
- entities are claiming for eligible employees;
- eligible business participants are correctly making claims; and,
- entities are not manipulating their turnover in order to satisfy the decline in turnover test.
The ATO has also published advice warning of the types of JobKeeper schemes that it regards as high-risk and are likely to attract its attention.
Early release of superannuation
Behaviours that attract the ATO’s attention in relation to the early release of superannuation measure include:
- applying when there is no change to your regular salary, wage, or employment information;
- artificially arranging your affairs to meet the eligibility criteria;
- making false statements or fraudulent attempts to meet the eligibility criteria; and,
- withdrawing and re-contributing super for a tax advantage – this could not only trigger anti-avoidance rules but also result in additional taxes and impact your eligibility for a super co-contribution.
Boosting cash flow for employers
The ATO is on the lookout for employers who have entered a scheme which is designed to:
- artificially restructure businesses to gain access to the cash flow boost;
- artificially changing the character of payments to salary or wages to maximise the cash flow boost;
- inflating reported withholding amounts to maximise the cash flow boost;
- resurrecting dormant entities or phoenixing; and,
- making false statements or fraudulent attempts to create an entitlement.
More information about the ATO’s compliance approach for the COVID-19 stimulus measures – including case studies is available on the ATO website.
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