logo
Receive the latest mybusiness news
SUBSCRIBE TO OUR NEWSLETTER
Copyright © 2020 MOMENTUMMEDIA

ATO probing dodgy COVID-19 stimulus access claims for fraud

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
23 June 2020 2 minute readShare
ATO

The ATO is zeroing in on fraud and schemes designed to take advantage of the government’s COVID-19 stimulus measures, including JobKeeper, early release of superannuation and the cash-flow boost.

The Australian Taxation Office (ATO) has announced it will be using Single Touch Payroll, income tax returns and information reported by super funds to catch inappropriate behaviour.  

Penalties for fraud, it said, will include fines, prosecution and imprisonment for the most serious cases.

Advertisement
Advertisement

“We know the overwhelming majority of Australians are honest, and we’ve worked hard to help those people who are impacted by COVID-19 as quickly as possible,” ATO Deputy Commissioner Will Day said.

“We also have 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.”

 

Mr Day emphasised that illegal behaviour will not be tolerated, noting that the ATO has already encountered some schemes designed to deliberately exploit the measures and seek to avoid tax.

“We’ve received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction,” Mr Day said.

“Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law. If someone recommends something like this that seems too good to be true, well, it probably is.”

He stressed the importance of carefully checking eligibility requirements before applying for any of the measures.

SPONSORED CONTENT

 

“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 also reminded individuals and businesses to come forward if they suspect they may have done something wrong.

“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 said.

What’s on the ATO’s radar

Detailing elements on its radar, the ATO said its compliance efforts for JobKeeper are focused on ensuring:

  • entities meet the eligibility requirements in relation to business income
  • entities are claiming for eligible employees
  • eligible business participants are correctly making claims
  • entities are not manipulating their turnover in order to satisfy the decline in turnover test

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
  • 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

The ATO is also 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
  • making false statements or fraudulent attempts to create an entitlement

The Tax Office stressed that serious financial crime affecting the ATO-administered measures of the government’s coronavirus package has been made a priority for the ATO-led joint agency Serious Financial Crime Taskforce (SFCT).

Moreover, the community has been called upon to offer the ATO valuable information 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.

ATO probing dodgy COVID-19 stimulus access claims for fraud
mybusiness logo
Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

Leave a Comment

Latest poll

Which of the following stimulus measures has had the greatest impact on your business?