Home Forums JobKeeper JobKeeper schemes and reduction in service fees (per PCG 2020/4)

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      Smohammad
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      Practical compliance guideline PCG 2020/4 considers schemes relating to JobKeeper and whether they are at risk of ATO compliance action. One scheme (per example 4) considers whether the reduction in a service fee by a service company commensurate with the decline in turnover suffered by the operating company is at risk of ATO review.

      While this scheme is considered low risk because the driver of the service fee reduction is due to commercial factors, does the answer differ if the service fee is reduced by both the decline in turnover and the fact that the service company is receiving JobKeeper payments? In other words, if the service fee is intended to be a cost recovery exercise for the service company and the service company was receiving JobKeeper 1.0 through to 27 September 2020, the actual service fee is depressed on account of receiving JobKeeper, being a wage subsidy.

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