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Is your Business thinking of voluntarily repaying JobKeeper payments?

Eligible businesses that received JobKeeper payments do not need to repay those amounts. However, some businesses may choose to voluntarily repay an amount. This amount can be equivalent to some or all the JobKeeper payments received from the ATO.

Voluntary repayments do not reduce the amount of JobKeeper a business received. These payments must be included in a business’s assessable income.

Tax consequences

All JobKeeper payments that an eligible business received are assessable income.

A voluntary repayment of JobKeeper may be deductible only in limited circumstances and only if the voluntary payment is clearly appropriate to achieve, or directed at achieving, the business objectives of the business.

For example, a deduction may be available if the payment is made to:

  • prevent reduction in business, or
  • publicise and promote your business in the short term.

Provided you treated your original JobKeeper payments correctly as assessable income, if you then act in good faith and use your best endeavors to determine whether you are entitled to a deduction for the voluntary repayment, we will generally not apply compliance resources to confirm if the payment is deductible.

Businesses must claim the voluntary repayment deduction in the same income year in which the repayment was made.

Businesses that are unable to claim a deduction may still wish to make a voluntary repayment. A voluntary repayment equal to the JobKeeper received less the tax paid on that amount will ensure a tax-neutral outcome overall.

If you have any questions or concerns relating to your JobKeeper payments, please don’t hesitate to contact our expert team of accountants.