Be aware – The ATO is targeting COVID-19 fraud

The ATO is targeting schemes designed to take advantage of the government’s COVID-19 stimulus package. This includes JobKeeper, early release of superannuation, and boosting cash flow for employers.

ATO Deputy Commissioner, Will Day said that with so many Australians impacted by COVID-19, the ATO’s priority is to ensure payments get to those who need them.

“We know the overwhelming majority of Australians are honest, and we’ve worked hard to help those people who are impacted by COVID-19 as quickly as possible.”

“We also have an important role to ensure the integrity of the stimulus measures and when we uncover fraud or people seeking to exploit them, we’ll take action, as we know the community would expect us to do.”

The reality is that the ATO has access to a large number of data sources that it uses to assess the risk of illegal or inappropriate behaviour. These sources include Single Touch Payroll, income tax returns, and information reported via super funds, as well as data from various third-party sources.

The Australian tax system works on a self-assessment model. It generally operates on the basis Australians are honest, meaning they will accept the information provided as true and correct and make payments accordingly.

But the ATO has also made it clear it will not tolerate illegal behaviour or development of schemes that are designed to deliberately exploit these measures, seek to avoid tax, or prey on vulnerable Australians.

The ATO has already received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction. Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law.

Penalties for fraud can include financial penalties, prosecution, and imprisonment for the most serious cases.

However, be aware that the ATO will be conducting checks later, so if you’ve received a benefit as part of the COVID-19 stimulus measures and it is discovered you are ineligible, you can expect to hear from them

If you think this may apply to you, you should contact us now.

It is much better to come forward to make a voluntary disclosure than wait to be audited.