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Re: JobKeeper and Cash Flow Boost: Why is the ATO rejecting those who report BAS quarterly or annual

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Enthusiast

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Replies 8

The ATO is currently rejecting small businesses from the COVID-19 stimulus support programmes, JobKeeper and Cash Flow Boost, based on when they lodge their Business Activity Statements.

 

Small businesses, which are more likely to report quarterly or annually, are being rejected, while those who report monthly and are more likely to be larger are being accepted.

 

This seems unjust and contrary to the spirit of these measures.

 

Why is the ATO rejecting JobKeeper and Cash Flow Boost applications based on when the small business files its BAS?

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions
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Most helpful response

Community Support

Replies 7

Hi @Community ,

 

Thanks for bringing your concerns to our attention.

 

The JobKeeper Payment scheme and Cash flow boosts are here to support businesses and their employees through these difficult times.

 

The JobKeeper Payment scheme is a temporary subsidy for businesses significantly affected by coronavirus (COVID-19). Eligible employers, sole traders and other entities can apply to receive $1,500 per eligible employee per fortnight.

 

Part of the eligibility requirements is that a business would need to satisfy the decline in turnover test. To support businesses and their differing circumstances we have a Basic test, Modified basic test for group employer entities and 7 Alternative tests. These decline in turnover tests apply to businesses of any size, regardless of their activity statement lodgment cycle and whether or not the entity is registered for GST.

 

The Cash flow boosts support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19.

 

The Cash flow boosts are automatically credited to most businesses when they lodge their activity statement.

 

Businesses are not disadvantaged if they've been given a deferral for their earlier activity statement or are not required to lodge their tax return yet. Please refer to impact of lodgment deferrals:

You won't be disadvantaged if, before 12 March 2020, we gave you a deferral for your:

  • 2019 tax return, or it is not yet due for you
  • activity statements, or you are not required to lodge an activity statement yet.

 

Apart from the general eligibility criteria we have discretion to give further time for a business to hold an ABN and provide us notice (through activity statement or tax return lodgment) that business income or supplies (taxable sales) were made. Please see Providing more information about your eligibility or ineligibility

 

If a business doesn't meet the general eligibility criteria but thinks they may still be entitled to the boosts, there are special eligibility rules for entities with the following situations:

 

Thanks for contributing to our ATO Community. I hope I've demonstrated that we are supporting small businesses through the JobKeeper payment scheme and Cash flow boosts measure regardless of their activity statement lodgment cycle.

 

All the best,

JasonT

8 REPLIES 8
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Most helpful response

Community Support

Replies 7

Hi @Community ,

 

Thanks for bringing your concerns to our attention.

 

The JobKeeper Payment scheme and Cash flow boosts are here to support businesses and their employees through these difficult times.

 

The JobKeeper Payment scheme is a temporary subsidy for businesses significantly affected by coronavirus (COVID-19). Eligible employers, sole traders and other entities can apply to receive $1,500 per eligible employee per fortnight.

 

Part of the eligibility requirements is that a business would need to satisfy the decline in turnover test. To support businesses and their differing circumstances we have a Basic test, Modified basic test for group employer entities and 7 Alternative tests. These decline in turnover tests apply to businesses of any size, regardless of their activity statement lodgment cycle and whether or not the entity is registered for GST.

 

The Cash flow boosts support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19.

 

The Cash flow boosts are automatically credited to most businesses when they lodge their activity statement.

 

Businesses are not disadvantaged if they've been given a deferral for their earlier activity statement or are not required to lodge their tax return yet. Please refer to impact of lodgment deferrals:

You won't be disadvantaged if, before 12 March 2020, we gave you a deferral for your:

  • 2019 tax return, or it is not yet due for you
  • activity statements, or you are not required to lodge an activity statement yet.

 

Apart from the general eligibility criteria we have discretion to give further time for a business to hold an ABN and provide us notice (through activity statement or tax return lodgment) that business income or supplies (taxable sales) were made. Please see Providing more information about your eligibility or ineligibility

 

If a business doesn't meet the general eligibility criteria but thinks they may still be entitled to the boosts, there are special eligibility rules for entities with the following situations:

 

Thanks for contributing to our ATO Community. I hope I've demonstrated that we are supporting small businesses through the JobKeeper payment scheme and Cash flow boosts measure regardless of their activity statement lodgment cycle.

 

All the best,

JasonT

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Enthusiast

Replies 6

Hi @JasonT,

 

Thank you for your message. Appreciate your time to provide such a comprehensive reply.

 

The parts that you have put in bold and italic were not previously stated on the ATO's website. ATO officers have explicitly rejected the claims of small business owners on the basis of their BAS lodgement periods.

 

Given this, hopefully you might be able to help with these follow up questions:

 

  1. When did the ATO change its position on this matter?
  2. Where is this changed position shown (specifically the ammendment of "not required to lodge an activity statement yet." to BAS/Tax return requirements) on the ATO website? (either link or QC# would be helpful please) 
  3. Now that the ATO has changed its position, how do small businesses previously discriminated against and rejected go about having their claims accepted by the ATO?

Appreciate your efforts 🙏 

 

Community

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Enthusiast

Replies 0

For the benefit of any future readers, the answer to question 2 is this is the link:
https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-...

 

As of July 31st 2020, this link contains the text:

You won't be disadvantaged if, before 12 March 2020, we gave you a deferral for your:

  • 2019 tax return, or it is not yet due for you
  • activity statements, or you are not required to lodge an activity statement yet.

 

There still remains inconsistencies across other ATO web pages related to this topic which will be hopefully addressed in the near future and acknowledging it does take time to update content.

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Community Support

Replies 4

Hi @Community ,

 

1. The eligibility criteria has been the same since the inception of Boosting cash flow for employers

 

2. Eligibility

on or before 12 March 2020, you lodged at least one of:
      – a 2019 tax return showing that you had an amount included in your assessable income in relation to you

         carrying on a business

      – an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12

         March 2020 showing that you made a taxable, GST-free or input-taxed sale.

 

You won’t be disadvantaged if you have been given a deferral for your earlier activity statement or are not required to lodge your tax return yet (2019 tax return). Read more about the impact of lodgment deferrals.

 

When we say deferral that means a deferral that has been granted from a request received or an automatic deferral. Deferrals were granted for businesses impacted by the 2019-20 Bushfires for example.

 

When we say "not required to lodge an activity statement yet" we are referring to the fact that depending on if you lodge BAS on a paper form or via the Business Portal or a Tax Professional lodges on your behalf your due date for lodging can be different. This doesn't change the relevant BAS periods required to be lodged as part of the eligibility criteria, only when it's due. This also applies to BAS for the relevant periods where a deferral has been granted.

 

Tax returns can be subject to different due dates if you're a self-lodger versus if your return is lodged by a tax professional. This doesn't change that it is the 2019 tax return that would have to show business income if you can't demonstrate supplies (taxable sales) through the relevant BAS periods. It only changes the due date of the 2019 return.

 

New to business

If you are a new business that did not have income in the 2018–19 year, you may still be eligible to receive the cash flow boost if you made supplies (or sales) in a tax period ending before 12 March 2020. The December 2019 quarter and the month of February 2020 are the last tax periods that end before 12 March 2020.

 

In most cases, if you lodged an activity statement before 12 March 2020 which showed sales, you will not need to do anything.

 

If you made a supply in one of those relevant tax periods but did not lodge any activity statements before 12 March 2020, you need to contact us and provide further information so that we can determine if you are eligible.

 

If your business made no sales before 1 January 2020 (for quarterly lodgers) or 1 March 2020 (for monthly lodgers) you will not be eligible.

 

Please see Eligibility companion guide for cash flow boost

 

3. We haven't changed our position. Businesses that don't meet the general eligibility criteria but think they may still be entitled to the boost should refer to the special eligibility rules for entities in the listed circumstances.

 

We administer the legislation on behalf of the federal government. If you feel the legislation unfairly impacts businesses please contact your local member of parliament.

 

Thanks for posting,

JasonT

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Enthusiast

Replies 3

Hi @JasonT ,

 

Based on your further reply, the original question is correct. The ATO is very much discriminating against small businesses who lodge quarterly or annually, as described here.

 

It is disappointing to see the ATO double down on this discrimination against small buisnesses which would otherwise be eligible had they instead lodged their BAS monthly and putting red tape before economic recovery.

 

 

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Initiate

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The ATO are NOT applying the legislation as it is written. They're guidelines for discretion are not in alignment with the intent of the legislation and businesses that are now DIEING are doing so as a result of these actions by the ATO.

 

eg internal test for Cashflow boost are (summarised);

- turnover <50m

- ABN

- Made payments to Employees/Dirs

- have lodged on or before 30 SEPT 2019 a tax return or activity statement

 

if you fail any of those you are denied requiring discretion.

Now look again at the last test.... It’s actually supposed to be 12 March 2020 NOT 30 September 2019!

 

The ATO support staff will internally get a 'Not Eligible' result along with a little ‘* if lodgements after 30 Sept 2019 business/tax payer can request discretion'. At which point businesses now have to JUMP THROUGH HOOPS to provide evidence that they are eligible. I was informed via the agent help line that the business needs to provide evidence they are employing and evidence they lodged IAS/BAS. Yes they specifically asked for payslips & COPIES of the activity statements. You guys have completely lost the plot you have the monthly activity statements at your fingertips and you have ALL the payroll details via STP. 

 

If Ray Regan was still alive you can bet your bottom dollar the ATO would not be getting away with half of the stuff they do these days.

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Enthusiast

Replies 1

Hi @oldSBSCHwasEasy ,

 

it is pretty frustrating. Based on your circumstances, you may also be of interest in supporting this:

 

Our dear friend Kylie has a propensity for erasing these hyperlinks (transparency and accountability is not of interest to the ATO) so if it is gone by the time you see this, you know Kylie beat you here.

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Enthusiast

Replies 0

Just a friendly update since Kylie removed the link again.

This is what you are looking for if you would like to see the ATO treat new small businesses fairly:

 

Otherwise you can head to google and search 'Jobkeeper Cash Flow Boost Change.org'

 

(Link removed by moderator to protect the integrity of the site)