Yahoo Finance ‘Discrimination’: Businesses denied JobKeeper over tax ‘flaw’
Australian businesses could be denied JobKeeper due to an accounting rule that “discriminates” against smaller businesses, a new petition has warned.
A change.org petition has called for a “fair go” for small-business employers that are barred from the wage subsidy scheme based on a technicality relating to when they submit their business activity statement.
“Due to a flaw in the Covid-19 Stimulus rules, two identical businesses will get treated differently based only on when they agreed to with the ATO to report their Business Activity Statement (BAS),” the petition states.
If a business was created on 1 July 2019 and chose to lodge their BAS annually, the business would not have lodged their first statement until 12 March 2020.
“Because the business has not lodged its first BAS, the business is deemed to have not met the 'taxable supply' criteria, despite being in operation, paying staff and making sales.
“The ATO is required to reject their claim for JobKeeper and Cash Flow Boost support,” the petition said.
Also read: JobKeeper extended until March 2021: What it means for you
Also read: How JobKeeper staff could get sacked anyway
Businesses created in January or February that agreed to lodge their BAS with the ATO quarterly also face the same treatment, it said.
Additionally, smaller businesses are hit harder by the ‘flaw’ as they are more likely to agree to quarterly or annual BAS periods.
“Remove the restrictions that block support to these small business employers and employees,” the petition reads.
“End the administrative discrimination and provide equal access to JobKeeper and Cash Flow Boost for all small businesses and their employees.”
The issue has already been raised by major tax and accounting bodies such as CPA Australia, Chartered Accountants Australia & New Zealand, the Australian Small Business and Family Enterprise Ombudsman, the Tax Institute and more.
In June, nine professional bodies urged Treasury in a joint submission to reconsider the rules that made these businesses ineligible for the scheme, reported Accountants Daily.
Institute of Public Accountants chief Andrew Conway said the design of JobKeeper needed to be amended for the scheme’s second phase.
“Notwithstanding making changes to JobKeeper at this point in the cycle, we would like to see … [that] the way a new business, that commenced operations from 1 January 2020, reports on GST should not determine whether they are in or out of the JobKeeper scheme,” he said in July.
Yahoo Finance has contacted the ATO, the Tax Institute and Treasury for comment.
A spokesperson for the ATO said it was deferring the request for comment to Treasury as “any suggested changes to the program is a policy question”.
A Treasury spokesperson directed Yahoo Finance to the Treasurer’s office for comment on the matter.
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, economy, property and work news.
Follow Yahoo Finance Australia on Facebook, Twitter, Instagram and LinkedIn.
