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ATO lists out fraudulent COVID-19 schemes

Jotham Lian
Jotham Lian
21 April 2020 1 minute readShare

Examples of fraudulent schemes aimed at accessing or boosting entitlement to the cash-flow boost and JobKeeper payment have now reached the ATO’s ears.

The Tax Office said it is now aware of a number of schemes that may be used to artificially create or inflate an entitlement to the cash-flow boost, and has warned that it will pursue action against businesses and tax agents that engage in such arrangements.

The ATO will be specifically looking out for arrangements where businesses register for PAYG withholding, or report withholding amounts on behalf of fictitious employees, so that they can claim the cash-flow boost.

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It will also scrutinise businesses that overstate their PAYG withholding amounts to increase their entitlement to the cash-flow boost.

Those who claim that former employees are still working for them, or who resurrect dormant entities, to wrongfully claim the cash-flow boost have also been identified as key fraudulent schemes.

 

The list of schemes comes after the ATO and the Tax Practitioners Board warned of “firm and swift action” against tax agents who were caught attempting to defraud the government’s stimulus package.

The ATO has now warned that it may pursue unscrupulous agents under promoter penalty laws, with civil penalties of up to 5,000 penalty units for individuals, 25,000 penalty units for bodies corporate, and impositions of up to twice the amount of consideration received or receivable.

Integrity measures built into the JobKeeper legislation will also give power to the Commissioner of Taxation to make determinations around schemes that are carried out for the sole or dominant purpose of obtaining or increasing the $1,500 per fortnight JobKeeper payment.

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ATO lists out fraudulent COVID-19 schemes
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Jotham Lian
Jotham Lian

Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals. With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy. 

Before joining the team in 2017, Jotham wrote for a range of national mastheads including The Sydney Morning Herald and Channel NewsAsia.

You can email Jotham at: [email protected] 

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