Inspector-General of Taxation scrutinises ATO's approach to JobKeeper, BCF eligibility

The investigation saw the IGTO dissect the ATO's decision to deny new businesses access to the economic support measures because of a restrictive integrity rule, which states that entities have to notify the ATO of taxable supplies made before 12 March.

According to the IGTO's findings, the meaning of taxable supplies was broader than the definition accepted by the ATO in its earlier decisions, noting also that BAS was not the only way to provide notice to the Tax Commissioner.

Speaking about the report, Ms Payne said that its aim is to help new small businesses understand ATO eligibility decisions concerning JobKeeper and BCF. 

She opined that the ATO’s administration in this area has also changed, noting that, importantly, the IGTO’s report improves transparency and communications and helps minimise disputes for the benefit of Australian taxpayers and the tax system. 

“This latest report links the dual roles of the IGTO – as both Inspector-General of Taxation and Taxation Ombudsman and throws light on a vital aspect of our role – complaint investigation which minimises disputes,” said Ms Payne.

“Public reporting of de-identified private complaint investigations – which includes a number of relevant case study examples – also helps to illustrate and better explain where the ATO sees the boundaries for economic support measures for eligible small businesses.”  

Moreover, Ms Payne said that it was vital that taxpayers have an opportunity to demonstrate their trading circumstances are eligible for both JobKeeper and Boosting Cash Flow support measures before they are deemed ineligible. 

“This report and transparent reporting of the findings of the IGTO’s investigations is in the public interest for this reason alone,” she said. 

IGTO’s role is to assist the Australian community 

Looking more broadly Karen Payne said it is also important that the community understands: 

1. SME Eligibility - New small businesses can demonstrate they are eligible for economic support measures other than by lodging a Business Activity Statement with the ATO before 12 March 2020; 
2. ATO Reviews - The ATO has agreed to review some of its earlier decisions - this includes taxation complaints raised with the IGTO, as well as objections and appeal cases which raise JK and BCF eligibility disputes for new small businesses; 
3. Making Contact - The ATO has not identified or contacted all potentially affected taxpayers so for those who have not been contacted but think they may be affected, Ms Payne advises them engage directly with the ATO in the first instance.