The ATO has now issued a practical compliance guideline PCG 2020/4 that deals with its compliance focus regarding schemes devised to access or increase JobKeeper payments. The guideline takes aim at contrived and artificial arrangements that technically satisfy the eligibility requirements, but have been implemented for the sole or dominant purpose of accessing a JobKeeper payment.
The PCG spells out several scenarios that the ATO deems possible arrangements that could influence the JobKeeper outcome for entities involved — such as artificially deferring the making of supplies, or bringing supply forward, solely to gain JobKeeper entitlement. Or a parent company of a corporate group manipulates the timing or reduces management fees.
It says with deciding whether to apply compliance resources, the Commissioner’s considerations will be “the occasions for and result of the scheme”. The PCG does not specify that COVID-19 needs to be the cause of a business’s turnover fall, but rather “external environmental factors beyond its control”.
Compliance efforts will therefore be driven more by the substance of the outcome achieved rather than the type of arrangement entered into. “For the avoidance of doubt, for this Guideline to apply to your circumstances you do not need to show that COVID-19 was the factor beyond the control of the entity (and its related parties) that affected the entity’s external operating environment.”
Should a scheme be evident, the Commissioner will be able to recover any overpayments and will have the power to apply significant penalties plus interest.
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