ato logo
Search Suggestion:

Cash flow boost for employers – schemes to artificially create or inflate entitlements

We are aware of schemes that may be used to create inappropriate entitlements to the cash flow boost for employers.

Last updated 29 August 2021

We are aware of schemes that may be used to artificially create or inflate an entitlement to the cash flow boost. These include artificial:

  • business restructures that attempt to create eligibility for the cash flow boost
  • arrangements to split a business which exceeds the $50 million aggregate turnover threshold, in order to create eligibility for both parts of the business
  • re-characterisation of payments to salary and wages to maximise the cash flow boost.

Strong integrity measures have been designed to protect against these types of schemes.

Businesses involved in these schemes may:

  • have their entitlement to the credit cancelled
  • be required to repay the amount received, along with interest or penalties.

An advisor who helps a client to make arrangements to artificially create an entitlement for the cash flow boost:

  • may have promoted a tax exploitation scheme
  • could become subject to a civil penalty under the Promoter Penalty Laws.

What are we doing?

We will be actively reviewing entitlements to the cash flow boost. Our digital reporting systems, including Single Touch Payroll, tell us how many employees each business has.

If we identify that you have entered into a scheme to artificially create or inflate entitlements to the cash flow boost you will either:

  • not receive any cash flow boost
  • be required to repay any overpaid amounts.

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.

See also:

What should you do?

If you have entered into an arrangement of this type we encourage you to:

  • phone us on 1800 060 062
  • seek independent professional advice.

You can make a tip-off to provide information to us about:

  • a concerning cash flow boost arrangement
  • promoters of these arrangements.

Any information you provide in the tip-off will be confidential.

See also: