Small businesses who turned a profit while claiming JobKeeper will not have to pay back $180 million in handouts where they’ve made “honest mistakes”, an inquiry has been told.
Australian Tax Office Commissioner Chris Jordan told a senate inquiry on Friday his office would not be clawing back the money because businesses “usually” passed the money onto their employees after making the claim in good faith.
“We have determined not to pursue $180 million, mostly from small businesses, where there have been honest mistakes,” he said.
“We have undertaken a comprehensive review of cases that forecast a decline in turnover and found the vast majority of taxpayers undertook the projected decline in turnover test in good faith.”
He said they had so far recovered $194 million in JobKeeper overpayments to businesses and intended to pursue another $89 million.
Mr Jordan was questioned about why people on Centrelink payments who’d made honest mistakes didn’t get the same deal.
Last month, the government was accused of a double standard after more than 11,000 Aussies received Centrelink debt letters informing them they had been overpaid after receiving JobKeeper and needed to pay the money back.
“You exercised discretion in relation to $180 million in payments because you said it was an honest mistake. I just contrast that with what’s happening with some of the other social security payments where genuinely honest mistakes are made,” independent Senator Rex Patrick said.
Mr Jordan said the ATO were following what the rules specified.
“That discretion was emphasised under the basis of what the rules specify… it was based on wording in the rules,” he said.
Labor Senator Anthony Chisholm questioned why a clear definition of ‘small business’ had not been provided.
For the purposes of the JobKeeper scheme, the ATO classified any business with a turnover of less than $250 million as small or medium sized business.
“I think the standard ATO definition of a small businesses is a turnover of less than $10m,” Senator Chisholm said.
Mr Jordan said the definition of a small business could be variable.
“Small has a number of different thresholds – 10 million, 25 million – different things,” he said.
“That ($250 million) figure includes what we consider to be those entities outside of large business and international groups.”