Phone: (03) 9563 4688

Email: office@aubreypaton.com.au

Address: 17D Chester Street, Oakleigh VIC 3166

Latest Accounting News
Hot Issues
Part 1 – Budget reminders. Under the Hood.
Part 2 – Budget reminders. Under the Hood.
Part 3 – Budget reminders. Under the Hood.
Comprehensive list of COVID-19 initiatives and packages.
Businesses not meeting obligations warned as ATO restarts compliance programs
Employers cautioned over ‘hard and fast’ decline in turnover eligibility
‘Follow the spirt of the law’, warns ATO
$120m in JobKeeper clawed back by ATO, new compliance areas highlighted
Budget 2020 - A very comprehensive break down.
Budget 2020 - Fact Sheets
Budget 2020 - At a Glance, Overview, Outlook
Temporary home office expenses shortcut extended again
JobKeeper extension – changes implemented
JobKeeper Participants – are “workers”
Commissioner registers updated JobKeeper alternative tests
Varying Pay As You Go (PAYG) Instalments
Reminder of Medicare Levy Surcharge (MLS)
September update of latest COVID-19 initiatives.
ATO JobKeeper 2.0 guidance surfaces
Expats Return to Australia – Travel Expenses
Profession to be relied on for post-JobKeeper turnover certificates
Update of Superannuation contribution rules from July 1, 2020
Expats & COVID-19 Impacts on tax residency
Economic recovery could be slower than anticipated: RBA
High Court rules in favour of employers on personal leave accruals
Articles archive
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 2 April - June 2006
Quarter 1 January - March 2006
Quarter 4 October - December 2005
Quarter 3 July - September 2005
Employers cautioned over ‘hard and fast’ decline in turnover eligibility

 

Accountants assisting clients with the JobKeeper extension have been urged to pay close attention to the actual decline in turnover test, with the ATO unable to offer leeway for those who come just shy of the requirements.

 



       


With JobKeeper now requiring entities to satisfy the new actual decline in turnover test, rather than the projected decline in turnover test used earlier in the program, the ATO will be required to follow the strict letter of the law in ensuring the requisite percentage declines are satisfied.


“[In JobKeeper 1], the legislation didn’t require the actual turnover to decline, so we saw a lot of organisations make a projection in a very difficult environment... and a lot of those projections didn’t pan out and that’s fine,” said ATO assistant commissioner Sandra Farhat on a recent ChangeGPS webinar.


“But moving into the extension, that is the test; the test is an actual decline.


“There is really no discretion in relation to decline in turnover, so there is no ability for the ATO to say, ‘Well, you were close, just not close enough, but we’ll let you through’ — the 30 per cent is a hard and fast legislative requirement.


“It is a significant change from a projected decline in turnover to an actual decline in turnover.”


The approach is a shift from the “sympathetic and understanding” stance that the ATO committed to earlier in the year when queried on how it would police the projected decline in turnover estimates.


ATO second commissioner Jeremy Hirschhorn told a Senate inquiry in May that the ATO would not nitpick turnover estimates that fell just short of the requirements because the law had merely required entities to make a reasonable estimate.


“If it ultimately turns out that the estimate was overly pessimistic and a business only went down 29 per cent, instead of an estimated 35 per cent, that is OK; what the legislation requires is a reasonable estimate,” Mr Hirschhorn said earlier this year.


Clawing back JobKeeper payments


The ATO’s confirmation of its new position comes as it releases fresh guidance on how it will manage JobKeeper payments that were incorrectly paid out.


For payments that were made because of an honest mistake, the ATO will not seek to recover these payments.


The facts and circumstances of each case will be considered, including whether the mistake was made earlier in JobKeeper when there was less public guidance.


Entities that did not take reasonable steps to check their eligibility will not be considered as having made an honest mistake.


Where payments will need to be repaid, the Tax Office will write to the entity to inform it of the reasons for clawing back the payments, how much needs to be repaid, and how repayments can be made.


Objections will be considered, while payment plans will be made available to those who aren’t able to pay on time.


The ATO also notes that it will generally not impose administrative penalties for JobKeeper overpayments that were the result of a mistake.


However, administrative penalties will apply if there is evidence of deliberate actions to obtain JobKeeper payments that an entity would not have otherwise been entitled to.


 


 


Jotham Lian 
23 October 2020
accountantsdaily.com.au


 




15th-November-2020