ATO Community

Re: Business commencement

Initiate

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Replies 5

Hi There,
Just wondering if a company with a registered business ABN in Dec 2018 which started to trade on Dec 2019 can use the alternative income test for registering for Jobkeeper. We opened a retail shop in Dec 19 but it took one year to prepare the opening. In that year of course we did not have income but only CAPEX and establishment expenses. It looks like the interpretation of commencement of a business is when it begins to trade which is in our case Dec19. Can please someone advise?
Thanks
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Devotee

Replies 0

Sounds like you may still be eligible as it sounds like you were carrying on a business. Once you apply you'll be asked to provide evidence that you've been impacted by covid
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Most helpful response

Devotee

Replies 0

Sounds like you may still be eligible as it sounds like you were carrying on a business. Once you apply you'll be asked to provide evidence that you've been impacted by covid

Enthusiast

Replies 3

I would suggest commencement of trading would be appropriate so could use the commenced business alternative test.

 

It would be good if the ATO could clarify this.

 

If that is not accepted then perhaps the substantial increase in turnover test could be used where you sales in March last year were nil so an infinite % increase for the year to March 2020. You would then be able to test April 2020 with the average of January to March 2020 turnover.

 

All IMO

Community Moderator

Replies 2

Hi @Cardis

 

Thanks for reaching out to us.

 

The alternative test (refer to our website) can be used when there isn't an appropriate comparison period in 2019. From what you have advised, it sounds like this applies to your business.

 

There are a number of circumstances where an alternative test applies. It is important to note that the first circumstance (the entity commenced business after the relevant comparison period) applies to businesses that didn't exist in that period. In turn, @dante_941 is correct to point you to one of the other circumstances.

 

Good luck with it all.

 

Thanks, ChrisR

Enthusiast

Replies 1

Hi ChrisR,

 

Can you advise if 'commenced business after the relevant comparison period' means after teh start of that period, or after that period ended.

 

Eg if using March 2020 as the test period, and you started trading on 15th March 2019, can you use this alternative test?

 

Thanks.

Former Community Support

Replies 0

Hi @dante_941 ,

 

So sorry for the delay in responding.

 

You can use the Your entity commenced business after the relevant comparison period (the business did not exist in t...alternative test.

 

Don't use March 2019 as the comparison period as you were not trading for the whole month. Calculate your average monthly GST turnover by adding each whole month of trade and then dividing by the number of those whole months.

 

Compare April 2020 with the average monthly GST turnover to see if the required decline in turnover is satisfied.

 

See Working out the right comparison period to determine a decline in turnover for further reference.

 

Thanks for posting and let us know if you have any further questions,

JasonT