Continuing on from our last post on the Cash Flow Boost schemes: The ATO has identified examples of fraudulent arrangements and will be actively reviewing entitlements to the cash flow boost.
The ATO has also indicated that Taxpayers and advisors who have entered into these types of arrangements will be subject to increased scrutiny.
Compliance action may also be undertaken.
Registered tax agents who advise taxpayers to inappropriately claim the cash flow boost, may be referred to the Tax Practitioners Board, who will consider whether there has been a breach of the Tax Agent Services Act 2009.
Promoter penalty laws, under Division 290 of Schedule 1 to the Taxation Administration Act 1953, may also apply to promoters of these schemes. Penalties may include:
• civil penalties of up to 5,000 penalty units for individuals
• 25,000 penalty units for bodies corporate
• impositions of up to twice the amount of consideration received or receivable.
The ATO's digital reporting systems, including Single Touch Payroll, inform the ATO how many employees each business has. If the ATO identify that a business has entered into a scheme to artificially create or inflate entitlements to the cash flow boost, the business will either:
• not receive any cash flow boost
• be required to repay any overpaid amounts.
If you have received a notice from the ATO regarding your tax affairs or have concerns about potential mistakes in your tax reporting, contact us for a confidential consultation: