15 May 2020

Beware the unintended consequences of JobKeeper process


If you’ve got skeletons in your cupboard, applying for JobKeeper may raise your risk of a tax audit, our expert warns

Get your house in order before handing over information to the ATO as part of the JobKeeper application process, business expert David Dahm has advised GPs.

Addressing a live TMR webinar audience last night, Mr Dahm said that before GPs start filing in JobKeeper forms, they should remember that they are giving the tax office “an unprecedented amount of information” about their business structures and relationships between entities.

“Remember that there could be different, unintended consequences of the JobKeeper application process, such as a superannuation audit or a fair work audit,” Mr Dahm, the principal and founder of Adelaide-based practice advisory firm Health & Life, said.

For instance, the ATO could determine that what GPs thought were contractors were actually employees, he said.

“So, please get appropriate advice before you apply for JobKeeper,” he said. “Make sure your structures are right before you apply because once you submit it, you can’t undo it. And trying to explain something gets a bit awkward and there could be significant consequences.”

The ATO has electronic systems that can “quickly work out what’s actually going on”, Mr Dahm said. “It didn’t happen like this in the last 30 years. So, that’s why I’m saying in this new environment everything has gone digital, everything is being data-matched and I actually think there’s a high tax audit risk right now if you’re not clear on your structures.

“If you can’t understand [your business structures], if you can’t account and can’t explain it, I think you have a problem and you need to get some correct advice now, sooner than later.

“All I would say is just watch that space and take out tax audit insurance if you have to, if you’re really concerned. Also, payroll tax insurance, which is not normally covered. Look at the fine print.”

This live Q&A was hosted last night by The Medical Republic webinars. Watch the full video on demand here.


Update from David Dahm:

**IMPORTANT PIP and SIP CLARIFICATION as at 15th May 2020**

In the video we say PIP’s may be included in your GST turnover calculation.

This is not correct.  Due to the timing of this payment and it is a significant amount money practice may qualify for job keeper.

To clarify and conditional grants and supplies are GST tax free supplies for example he Practice Incentives Program (PIP), General Practitioner Immunisation Incentives Program, Australian Childhood Immunisation Register Information (Notification) Program and Rural Retention Program are outside the GST rules such as Practice Incentive Payment and Service Incentive Payments see:

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