Thinking Tax Edition 3

Roelof van der Merwe

Thinking Tax is an initiative from Crowe to provide you with a short overview of specific tax issues that may affect you or your business, with a focus on practical issues you may face on a day to day basis.

1. Is your employee a long-term casual employee for JobKeeper purposes?

Following our recent Thinking Tax – Insights regarding the new 1 July 2020 employment reference date for JobKeeper fortnights starting on or after 3 August 2020, we have received many questions about how this date change may affect employees that are only working on a casual basis and were not long-term casual employees as at 1 March 2020.

Good news is such employees may now qualify for JobKeeper from 3 August 2020 if they became long-term casual employees as at 1 July 2020 (i.e. if they have been employed on a regular and systematic basis for the 12-month period from 2 July 2019 to 1 July 2020).

A casual employee is likely to have been employed on a regular and systematic basis during this 12-month period (for JobKeeper purposes and not for Fair Work purposes) if the casual employee had a recurring work schedule or maintained a reasonable expectation of ongoing work because there was:

  • A pattern or roster of hours worked (not necessarily rostered to work on the same days and hours each pay period (e.g. because of COVID-19 a casual employee may have worked fewer shifts in the period March to June 2020);
  • A pattern of work with hours regularly offered and accepted.

However, casual employees may not have been employed on a regular and systematic basis if:

  • The employer was unable to offer suitable work to each individual for substantial periods of time (e.g. casuals that only work during an employer’s busy period of three to four months in the 12-month period);
  • The individual made themselves unavailable for work over a substantial period of time; or
  • The individual was only offered, and/or only accepted work irregularly or occasionally (e.g. a casual that worked two or three shifts a week and has only worked 15 times since July 2019).

Determining whether casual employment was on a “regular and systematic basis” is a factual question that will depend on the circumstances of each case. Therefore, the ATO generally won’t review a reasonable and good faith assessment by an employer of employees who are long-term casual employees under either the 1 March or 1 July 2020 test.

2. If the following factors were present when you claimed JobKeeper, the ATO may be reviewing your claim

In the coming months, we anticipate wide-spread audit activity from the ATO to determine whether businesses that have claimed the JobKeeper payment were in fact eligible to qualify.

Some red flags that may put you on the ATO radar include situations where:

  1. An individual (e.g. a sole trader, a director of a company or a partner in a partnership) claims JobKeeper more than once. For example, the individual claims firstly as an employee of one business and then claims again as an eligible business participant for another business. Or, where an individual that is a director of multiple companies, claims JobKeeper as an eligible business participant in all the companies;
  2. Multiple family members claim JobKeeper. For example, if a husband and wife are both partners in a partnership and the husband claims JobKeeper as an employee of the partnership while the wife claims JobKeeper as an eligible business participant in the partnership while before JobKeeper only one of the family members worked in the business; and
  3. Turnover is adjusted to ensure there is a decline of at least 30% to qualify for JobKeeper (e.g. by deferring issuing invoices or bringing forward receipts).

3. Beware of cybercriminal activity

Cybercriminal activity is very common during Tax Time and it’s common to see fake ATO emails requesting users to click on links that take users to fake websites. We also understand there are fraudulent operators posing as tax experts, providing misleading advice and providing services on a “no benefit – no fee” basis to unsuspecting taxpayers on how to access the government’s COVID-19 stimulus measures such as JobKeeper incentive.

We recommend you read this article for further information on keeping cybersafe. If you believe you have been approached by a potential fraudulent operator, please get in contact so we can notify the ATO and the Tax Practitioners Board.

Roelof van der Merwe, National Tax Director (Melbourne)

Mark Azzopardi, Managing Partner, Tax Advisory (Melbourne)

Matthew Saad, Senior Partner, Tax Advisory (Sydney)