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On 21 July the government announced proposed changes to the JobKeeper program. These changes don’t affect Jobkeeper payments until after 28 September 2020.

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Company tax return treatment of JOBKEEPER subsidy and CASH BOOST receipts

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Where do the receipts for or a) JobKeeper wage subsidies and b) Cash Boost 1 get included in the Company Tax Return 2020.  There is no specific information in the Company Tax Return Instruction 2020.   When answering please refer to the specific page numbers and item labels in the Company Tax Return 2020 NAT 0656-06.2020.  Our current thinking is as follows:

  Include JobKeeper subsidies as part of total income on page 3 at item Q Assesable government industry payments.

  Include Cash Boost 1 (and next year 2)  on page 3 at item R Other gross income.

  Include Cash Boost 1 (and next year 2) on page 6 at item V Exempt income.

Is this treatment correct?

 

 

 

 

 

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Good question, i'm sure alot of people will be asking the same thing as we get close to tax time so it would be good to get some clarification this....

 

Jobkeeper - This is included as assessable income, not sure if you would put it under Assessable government industry payments though

All JobKeeper payments are assessable income of the business that is eligible to receive the payments. The normal rules for deductibility apply in respect of the amounts your business pays to its employees where those amounts are subsidised by the JobKeeper payment.

The JobKeeper payment is not subject to GST. https://www.ato.gov.au/general/jobkeeper-payment/employers/paying-your-eligible-employees/#Taxconseq...

 

Cash boost - You don't pay tax on this and it's not subject to GST so i wouldnt think you report it as income https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-...

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Enthusiast

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Good question, i'm sure alot of people will be asking the same thing as we get close to tax time so it would be good to get some clarification this....

 

Jobkeeper - This is included as assessable income, not sure if you would put it under Assessable government industry payments though

All JobKeeper payments are assessable income of the business that is eligible to receive the payments. The normal rules for deductibility apply in respect of the amounts your business pays to its employees where those amounts are subsidised by the JobKeeper payment.

The JobKeeper payment is not subject to GST. https://www.ato.gov.au/general/jobkeeper-payment/employers/paying-your-eligible-employees/#Taxconseq...

 

Cash boost - You don't pay tax on this and it's not subject to GST so i wouldnt think you report it as income https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-...

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The answer is incorrect.  ALL income is inluded in the first part of a Company Tax Return as this simply mimcs the actuall accounting profit or loss of the company.  The headings in the tax return require income to be reported differently from the way in which accounting income is reported.  The second part of the return reconciles the actual total accounting profit or loss to the "Taxable profit or loss" by making additions and deductions for items included in the accounting statement that are excluded in the Taxable profit.  Nothing at all to do wit whether an item is subject to GST or not.  The original question is about the item label(s) against which the JOBKEEPER and CASH BOOST are expected to be reported.  We understand that the cash boost is not subject to tax and therefore has to be deducted somewhere.  It can not be excluded from accounting profit as it is real income.  The JOBKEEPER income is subject to company tax and the original question is if is to be reported separately or is it acceptable to have it offset against an expense (eg the total salary & wages).  None of the links embedded in the answer lead to any information on the ATO help pages about this question.  

 

 

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Hi @Anxious

 

Thanks for contacting ATO Community.

 

You can find the information on our website for Job Keeper Tax consequences . All JobKeeper payments are assessable income of the business that is eligible to receive the payments. The normal rules for deductibility apply in respect of the amounts your business pays to its employees where those amounts are subsidised by the JobKeeper payment. The JobKeeper payment is not subject to GST.

 

For the cash flow boost, you do not need to pay tax on the amount . However, if you distribute the cash flow boost from the business to another entity (for example, making a trust distribution or paying a dividend to shareholders) there may be tax consequences for the recipient.

 

The amounts do not need to be paid back when your cash flow improves. However, if you have been paid more cash flow boosts than you are entitled to you will need to repay the excess.

 

The cash flow boost is not subject to GST as you are not making or agreeing to make a supply for the payment.

You will still be entitled to a deduction for PAYG withholding paid.

 

There is no effect on tax paid by employees in respect of their salary and wages.

 

The information is on our ATO Website under cash flow boost, Tax consequences.

 

I hope this information helps you and you remain well during this time.

 

MariR

 

 

 

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Your answer does not address the question of where the amounts are to be reported on the Company Tax Return Form.  We understand the consequences but nowhere is there any information about where the numbers are included or deducted.

 

Our iginal question stands.  We know the tax effect of our treatment comes to the correct result but is it where the numbers go on the forms?  

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Hi @Anxious

 

The JobKeeper payment is reported under Q Assessable government industry payments.

 

The same link above will tell you that the Cashflow Boost is non-assessable, non-exempt.

 

Hope this helps.

 

Thanks, Ari

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Final Answer - thanks to contributors

 

Labels are the references to the Company Tax Return 2020 NAT 0656-06.2020.

 

Include JobKeeper subsidies as part of total income on page 3 at item Q Assesable government industry payments.

 

Include Cash Boost 1 (and next year 2)  on page 3 at item R Other gross income.

Include Cash Boost 1 (and next year 2) on page 6 at item Q Other income not included in assessable income.