Tax & Super Australia (TSA) is concerned that the JobKeeper scheme may not deliver on its intended $130 billion boost to the economy, with 40% of tax agents and accountants reporting to have at least one business client who is eligible for the scheme but does not intend to use it.
A TSA member survey, which captured the responses of more than 540 tax and accounting professionals, showed that 96% of respondents said they had business clients who had already or planned to enrol for JobKeeper payments. However, 40% of respondents also said they had at least one eligible business client who would not take up JobKeeper.
Respondents could select multiple reasons why their eligible business clients would not access the scheme. The most common reason was that businesses were worried that if they got their eligibility wrong, they would have to pay back money to the ATO (53%). This was followed by businesses not being confident enough that they could satisfy the turnover test (48%), which has been a point of confusion among the tax and business community.
The third most cited reason for not taking up JobKeeper was that they could not access the finance needed to pay employees before the JobKeeper payments flowed (35%).
Other reasons were that businesses did not like the “one-in all-in” requirement (22%), they did not think their businesses would be profitable at the end of the six-month JobKeeper period (9%) or that they planned to wind up their business (5%).
TSA tax counsel John Jeffreys said that concerns about eligibility echoed feedback already given by members. “We’ve engaged deeply with members on JobKeeper, with more than two thousand attending our webinars and hundreds contacting us for help. Our members have been diligent to try to ensure they advise their clients correctly. However, many are unsure how it will play out in practice.”
“The idea that you might get your decline in turnover test wrong is very scary. These are issues we are clearly putting to the ATO to make sure people don’t feel scared to claim the JobKeeper when they are reasonably entitled to it.”
“If the policy is to inject $130 billion into the economy, then the administration of the relevant law should be conducive or favourable to how businesses access payments. If a business can reasonably show they meet the eligibility, including for decline in turnover, then the ATO should take a reasonable view when assessing this.”
“Otherwise, you may see situations where a business with five employees, for example, only just meets the test but are reluctant to take it up. This is because if the ATO take issue with their turnover calculations and forecasts, the employer could have around $90,000 to pay back,” Jeffreys said.
In the open comments section of the survey, members reported that they had pulled up clients who were trying to rort the system. On the flip side, members also reported that some clients were eligible but opted not to receive any stimulus because they were financially well off and felt it would be morally wrong.
Accountants and tax agents play a key role in working with businesses and individuals to access JobKeeper and other relief because most of the Federal Government’s economic stimulus has to be lodged with the ATO.
The survey results showed that the majority of members believed the ATO was doing well to manage this workload, with 84% saying the ATO was doing either a “fantastic” or “satisfactory” job administering the cash flow boost and JobKeeper payments.