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Company director who is also contracting to the business qualify as eligible business participant?

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Newbie

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Hi,

We have a director of the company who works in the company as a contractor under his own ABN (ie not a direct employee) so does he qualify as an eligible business participant because he is a director.  He will not qualify as an employee as he bills the company from his company.

 

To be an eligible business participant, he is not allowed to be employed by the company (presumably to not allow a double claim.)

The question is does he qualify as an eligible business participant as he is not "employed" by the company as an employee but rather a contractor.  He is not getting the allowance in his own entity or anywhere else and meets all the other requirements.

Thanks

 

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Community Support

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Hi @SeekingClarity 

Companies may be entitled to JobKeeper payment under the business participation entitlement. Only one person in a director capacity may receive the payment and that individual may not receive the payment as an employee.

Hope this information helps.

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Community Support

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Hi @SeekingClarity 

Companies may be entitled to JobKeeper payment under the business participation entitlement. Only one person in a director capacity may receive the payment and that individual may not receive the payment as an employee.

Hope this information helps.

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Newbie

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Hi @RobynS ,

Thanks for your response.  That person is not receiving the payment as an employee and is the only Director that would receive the payment however he is doing work for the company as a contractor (not a direct employee). He is contracting through his own entity and will not be claiming Jobkeeper in his own entity.   

 

So just to be clear - in the above circumstance will he qualify or is he inelegible because he is being indirectly employed as a contractor rather than directly employed as an employee?

Thanks

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Community Support

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Hi @SeekingClarity

 

Thanks for getting back to us and for your patience.

 

The business (Company A) won't be able to claim the JobKeeper Payment for the director as an employee because they're not an employee of Company A. This is because they are a contractor. In turn, they don't meet all the eligible employee requirements for Company A.

 

Whether Company A can claim the JobKeeper Payment for them as a business participant will depend on whether all the eligible business participant requirements have been met. They meet the first requirement because they're not an employee of Company A and from what you have advised, it also sounds like they meet the second requirement (they are actively engaged).

 

One of the other requirements is that they're not an employee (other than a casual employee) of another entity. You have mentioned that they have another company (Company B) and that the contract is between the two companies. If they are an employee (other than a casual employee) of Company B, Company A won't be able to claim the JobKeeper Payment for them as a business participant either.

 

We hope you found this information helpful.

 

Good luck with it all.

 

Thanks, ChrisR

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Newbie

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Hi @ChrisATO ,

Thank you for your response which clarifies the situation for me.  The Company B is not a trading company.  So the person in question (as I understand it from him) is not an employee of company B but rather a shareholder (and presumably paid dividends).   So based on your response and the above,  if I understand that correctly then it seems he is eligible as a business participant.  

 

Thanks for your assistance on this.  I do have another query that I am still unsure of so it would be greatly appreciated if you could review it and provide guidance.  It is at https://community.ato.gov.au/t5/COVID-19-response/Regular-and-systematic-casual-query/m-p/60816#M162...

Many thanks again.