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Job Keeper Extension Eligibility for businesses who have self helped

Newbie

Views 1038

Replies 6

We have contacted the ATO business information line more than 10 times in the last 3 weeks, but we are yet to obtain any clear and concise advice.  We know no other way to communicate with the ATO to clarify Job Keeper policy except via the ATO Community.

 

In 2012 we built a tourism business in regional Victoria that pre-COVID welcomed 800,000 visitors each year, employed 100 staff and made a significant difference to the local economy by drawing tens of thousands of visitors to our region. Our business is the largest family owned tourism venue to Victoria.

 

Since March, due to COVID, our visitor numbers and sales declined by 95% compared to last year. In response we reduced staff numbers from 100 to 44 and invested heavily in product development and marketing to create online sales to reduce the impact of the COVID restrictions and to move, at reduced prices, tonnes of product that would have gone out of date. JobKeeper has supported 38 of the core team to support the low margin online sales business.

 

In the September 2020 quarter our revenue is 44% below last year which will result in us being ineligible for the JobKeeper extension, although by only 6% under the income reduction threshold. However, if we deduct the new sales from the online initiative, the revenue is 95% down on last year which will make us clearly eligible for the JobKeeper extension.

 

Our question to the ATO is…. does it have flexibility in the eligibility assessment for JobKeeper extension to allow us to deduct the online sales from our income in lodging our return due in early November. We believe the ATO should support COVID impacted businesses that have implemented self-help measures to minimise the financial impact of COVID, to retain staff and to help survive this crisis.  The financial results from operating at 56% of sales has been a massive loss but it appears the ATO only look at revenue and no other factors.

 

We have many months, if not years, of struggle ahead and many millions of deferred commitments that we must address if we are to trade into 2021. Without JobKeeper we will need to lay off all our remaining staff and close the doors of this much-loved iconic tourism venue in regional Victoria (although classed in Metro Melbourne so currently still in lockdown).

 

We seek your urgent advice so we can make critical business decisions that will impact so many people.  The Government continually states that employment is their number one priority and without JobKeeper, there will be more hardworking loyal people queuing for JobSeeker and facing family despair.

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 4

Hi @TourismVic

 

Sorry to hear about your situation.

 

When calculating your turnover we can only go by the current information about the actual turnover test and what is included and excluded for the purposes of JobKeeper. Unfortunately we don't have discretion to decide on a case by case basis what you can leave out. LCR 2020/1 has details about the decline in turnover test and the relevant supplies that should be included.

 

If you haven't satisfied the basic test you can see if any of the alternative tests are applicable. If you aren't eligible for extension 1, you may re-qualify again for extension 2.

 

All the best.

 

Ari

 

6 REPLIES 6

Devotee

Replies 0

Assume your normal turnover is over 1 billion as you would otherwise need to demonstrate a 30% decline

Most helpful response

ATO Community Support

Replies 4

Hi @TourismVic

 

Sorry to hear about your situation.

 

When calculating your turnover we can only go by the current information about the actual turnover test and what is included and excluded for the purposes of JobKeeper. Unfortunately we don't have discretion to decide on a case by case basis what you can leave out. LCR 2020/1 has details about the decline in turnover test and the relevant supplies that should be included.

 

If you haven't satisfied the basic test you can see if any of the alternative tests are applicable. If you aren't eligible for extension 1, you may re-qualify again for extension 2.

 

All the best.

 

Ari

 

Newbie

Replies 3

Dear Ari

 

Thank you for your reply. I have reviewed the material in the link that you have provided to the Law Companion Ruling.

 

The ruling states that the test period and comparison period can be a month or a quarter. Refer below extract

 

In our case if we use September 2020 as the test period and September 2019 as the comparison period, we can demonstrate that the decline in revenue is 59% thus satisfying the turnover test and resulting in our tourism business being eligible for Job Keeper extension for the December quarter

 

Can you please confirm

 

Many Thanks

 

 

  1. The turnover test period [7] must be:

a calendar month that ends after 30 March 2020 and before 1 October 2020 (that is, March 2020, April 2020, May 2020, June 2020, July 2020, August 2020 or September 2020),

or 

a quarter that starts on 1 April 2020 or 1 July 2020.

 

  1. The relevant comparison period [8] must be the period in 2019 that corresponds to the turnover test period.
  2. In this Ruling we use the term relevant period when explaining concepts that apply to both the turnover test period and the relevant comparison period.
  3. You can choose whether you are comparing monthly or quarterly periods.[9] You can choose to compare the relevant month or quarter, regardless of whether you report quarterly or monthly for GST reporting.[10

ATO Community Support

Replies 2

Hi @TourismVic,

 

Your exert refers to Paragraphs 11 to 13 of the Law Companion Ruling LCR 2020/1, JobKeeper payment – decline in turnover test.

 

Paragraphs 20 to 33 are the only sections applicable to the actual decline in turnover test. 

 

All other parts of this ruling are only relevant to the original decline in turnover test.

 

This is stated on the basic test.

 

If you do not demonstrate an actual decline in turnover using the basic test, as outlined on our website, you should see if any alternative test applies.

Newbie

Replies 1

Dear Blake, thank you for your reply.

 

I have reviewed the alternate tests which mostly refer to variations of income in the comparison periods whereas our variation occurred during the test period (Sept Qtr).

 

From your knowledge of the alternate tests, is there one appropriate for our circumstance?

 

Furthermore if the current alternate tests cannot help us, the Commissioner must have discretion to consider our case whereby we have suffered significant losses due to COVID but in response invested at great risk in new income activities to minimise the financial impact of COVID, to retain staff and to help our business survive this crisis.

 

Can you please direct us to the appropriate test or communication channels?

 

We need to have a firm decision re eligibility so we can bring our staff back to work immediately and well in advance of our first claim for extension 1 due early November.

 

Thank you

ATO Community Support

Replies 0

Hi @TourismVic

 

You briefly mentioned heavily investing in new activities in response to COVID. Take a look at the alternative test for a business restructure that changed your entity's current GST turnover 

 

Getting in touch with your local MP would otherwise be the next step as the JobKeeper payment is legislated by parliament and there's no discretion at the moment for the Commissioner to consider your circumstances if the decline in turnover test has not been met.

 

Ari