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Re: Job Keeper - Sole Trader - Response from ATO saying ineligible

Community Manager

Replies 11

Hi everyone,

 

To clarify for sole traders who started a business this year, in most cases you must have declared business income in the 2018-19 income tax year or be able to demonstrate sales between July and December 2019. If you commenced business from January 2020, you won't be able to meet either of those requirements as your business didn’t exist in the relevant periods. So even if you can show a decline in turnover (say, from January) you still can't meet the eligibility requirements and won't be eligible for JobKeeper as a business participant.

 

The only limited exceptions to this rule are where you're registered for GST on a monthly basis and/or where you want to participate in JobKeeper only for your employees.

Initiate

Replies 3


@NicolaATO wrote:

Hi everyone,

 

To clarify for sole traders who started a business this year, in most cases you must have declared business income in the 2018-19 income tax year or be able to demonstrate sales between July and December 2019. If you commenced business from January 2020, you won't be able to meet either of those requirements as your business didn’t exist in the relevant periods. So even if you can show a decline in turnover (say, from January) you still can't meet the eligibility requirements and won't be eligible for JobKeeper as a business participant.

 

The only limited exceptions to this rule are where you're registered for GST on a monthly basis and/or where you want to participate in JobKeeper only for your employees.


Hi Nicola,

 

Thanks for the response. But can you please explain why an alternative test exists for businesses which commenced after the relevant comparison period but before 1 March 2020?

 

https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/JobKeeper-tests/Applying-the-turnover-tes...

 

Specifically, the second example on the link above for Douglas details a situation were a business commenced on 15 February 2020.

 

Thanks.

Initiate

Replies 1

Exactly, as "Douglas" would have had to register for GST, select monthly BAS and then file it before March 12th to be eligible - which would be impossible - no wonder we are all confused when the ATO can't even get their own examples right.

Superuser

Replies 0

Douglas's example is monthly so it is possible for him to still meet the requirements as the commissioner can grant his discretion if the statement is lodged after 12 March as it's exceptional circumstances. I agree that new business who started this year should be entitled to jobkeeper. However that doesn't change what the current legislation is. The people on this forum have provided me with some really awesome answers. Trying to navigate the law while it's still being implemented sounds like a terrible job. If an answer provided on this forum was correct at that point in time than it's not really incorrect advice that's how forums work. Hopefully CPA are successful in advocating for a change to that benefits new businesses

Community Manager

Replies 0

Hi @dgh @BCA-Tas @Fluxpavillion 

 

Thanks for letting us know that the Douglas example on our website was confusing - we have added a note to clarify that the example only shows how a new business can meet the fall in turnover test.

 

As a sole trader running a new business, you can meet this test and claim JobKeeper for eligible employees. However, if you also want to claim JobKeeper as an eligible business participant, you'll need to meet the additional requirements which you won’t be able to if you started business after 1 Jan 2020.

 

Hopefully this helps clear things up - let me know if you have any further questions.

Initiate

Replies 6

Hi NicolaATO 

I have questions - can you provide me with evidence and or support as to where you get your dates from? It seems the ATO is changing the requirements as they go along and I would like these dates backup. 

 

Initiate

Replies 4

So I have been notified this week that my objection has been unsuccessful as I started my business on Jan 1st and even with evidence of activity for the first qtr and meeting the requirements of the alternative test it's a No . The legislation simply does not cover me and sadly much of the info provided on this site is misleading . The CPA have presented a letter to the treasury requesting the situation re new businesses be  reconsidered but how that goes is anyone's guess . Sadly with the quick set up of Jobkeeper we will be the group that is left high and dry. Good luck .

Initiate

Replies 2

Yes, same here. I started operations Feb 5th but was advised that I would have had to have also been registered for GST and done a BAS return by March 12th to even pass the basic eligibility test.

 

The ATO staff member who reviewed my objection acknowledged that the constant change of rules had made it hard on everyone and that this had quite likely led to incorrect advice, as we have seen on this forum and also had over the phone.

 

Based on that discussion, I dont see how the "Douglas" example of an Alternative test that is on the website would even be eligible as he had a Feb 15th Start date but would have had to have doen a BAS return by March 12th!.

They have at least acknowledged the shortcomings and advised that they wont pursue recovery of the first 2 fortnights that were paid. 

 

I'm still considering & in two minds as to whether an objection to the Administrative Appeals Tribunal is worth the effort / likely to succeed so interested on the views of others in similiar situations.

Initiate

Replies 1


@BCA-Tas wrote:

Based on that discussion, I dont see how the "Douglas" example of an Alternative test that is on the website would even be eligible as he had a Feb 15th Start date!. They have at least acknowledged the shortcomings and advised that they wont pursue recovery of the first 2 fortnights that were paid. 

 

I'm still considering & in two minds as to whether an objection to the Administrative Appeals Tribunal is worth the effort / likely to succeed so interested on the views of others in similiar situations.


From what I understand, in the Douglas example, he should have filed a request for the commisionner's discretion to have more time to file income tax documents before they applied for JobKeeper. Don't quote me on it but from reading here that seems to be the explanation. Clearly that's not what the ATO website for that example says, though!

 

I recieved an automated email from the ATO this week notifying me that "the Commissioner has exercised his discretion and you do not need to repay any overpayment amounts you have received", which is great news.

 

That said, my accountant is going to file a formal objection and I encourage more people in this situation to do the same.

Initiate

Replies 0

This is Douglas - lets be like Douglas

(I wish I was a clever as Douglas and able to work out how to jump through all these hoops in the right order even when only half the information is provided up front and then incorrect advice is given by ATO themselves :-) )