ATO Community

Re: JobKeeper for purchase of new going concern business

Newbie

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Replies 11

Hi,

 

Our client has purchased a new business as a going concern and will be operating the new business in the existing entity (company). Our client already operates another business in this company. The company is eligible and registered for the JobKeeper scheme and has been paying it's existing staff the JobKeeper.

 

Can my client add the new employees from the new going concern business to the JobKeeper scheme in the company?

 

The employees in the new business are already receiving the JobKeeper.

 

Thanks in advance.

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Community Manager

Replies 5

Hi @Cosi we've checked with our technical team and have put together three scenarios to help you work out whether your client's entity and employees are still eligible to receive JobKeeper payments:

  1. If you’ve taken over a company with its ABN and that entity still employs the employees, there is likely no change.
  2. If you purchase a business from an entity, the employees transfer to you and you already qualified for JobKeeper, the eligible employees will generally remain eligible. You will need to phone us to update your enrolment details.
  3. If you purchase a business from an entity, the employees transfer to you but you didn’t previously qualify for JobKeeper, the new employees don’t turn your business into a qualifying entity if you were not already.
11 REPLIES 11

Community Manager

Replies 4

 

@Cosi we're looking into this for you and will let you know once we have an answer. In the meantime, our Employee FAQs includes the following information:

Question: The business I work for has changed ownership since 1 March 2020. Am I still an eligible employee?

Answer: Yes, you are still an eligible employee of a business for the purposes of the JobKeeper scheme (if all other conditions are also satisfied). The acquiring entity will be treated as having employed you prior to the business changing owners.

For casual employees, in determining whether you are a long term casual employee (that is, employed by an entity on a regular and systematic basis during the 12 month period ending on 1 March 2020), the time you worked before the business changed ownership is counted.

Newbie

Replies 3

Thanks. Did you confirm if they can claim the JobKeeper for the new business?

Former Community Support

Replies 2

Hi @Cosi,

 

 

As per  NicolaATO response, if the employee can receive Job keeper payments from their new business owners, then yes, the new business owners will be able to claim job keeper payments.  As a reminder to receive the JobKeeper payment both the employer and employee need to meet all the eligibility requirements.

 

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

MariR

Newbie

Replies 1

Thanks for confirming.

 

The company has been deemed to be eligible for JobKeeper (previous business in the same trading company). Do you they need to apply the turnover test to the new business as well? Or they are not required to apply the turnover test to the new business,as the company has already been deemed an eligible employer?

Former Community Support

Replies 0

Hi @Cosi 

 

In this circustance it would be best to phone us so that we can assist you with your specific needs in detail.

 

I hope you and your clients continue to remain safe and well.

MariR

Most helpful response

Community Manager

Replies 5

Hi @Cosi we've checked with our technical team and have put together three scenarios to help you work out whether your client's entity and employees are still eligible to receive JobKeeper payments:

  1. If you’ve taken over a company with its ABN and that entity still employs the employees, there is likely no change.
  2. If you purchase a business from an entity, the employees transfer to you and you already qualified for JobKeeper, the eligible employees will generally remain eligible. You will need to phone us to update your enrolment details.
  3. If you purchase a business from an entity, the employees transfer to you but you didn’t previously qualify for JobKeeper, the new employees don’t turn your business into a qualifying entity if you were not already.

Newbie

Replies 2

Hi @NicolaATO 

I have read a number of your responses to business acquisition and the transfer of eligible Jobkeeper employees.

I run an eligible jobkeeper company.   We are in discussion with another eligible jobkeeper business. 

 

Due to COVID-19, the other entity is looking to close or offload a part of their business.  e.g. a business with two outlets, to either close or sell one.

 

This would involve the transfer of a number of staff, but not all.  The other entity would continue to operate in a different capacity into the future.

 

Please confirm that the staff transferred, would continue to be eligible for Jobkeeper, while the staff that remained with the existing company, would also continue to be eligible with their existing employer. But not both.

ATO Community Support

Replies 0

Hi @Hospitality

 

Sorry for the delay.

 

We'll look into this and let you know

 

Ari

ATO Community Support

Replies 0

Hi again @Hospitality

 

The below is taken from the legislation (Section 9 (6)) which refers to eligible employees for businesses that change hands.

 

Both of the following need to apply for the employees (transferred to later entity) to remain eligible:

 

                              (i)  at the later time, the individual is employed in a business carried on by the later entity or in a non‑profit body the purposes of which are carried on by the later entity;

                             (ii)  at the earlier time, the individual was employed in the same business or non‑profit body, but that business was, or the purposes of that non‑profit body were, carried on by a different entity.

 

If you need further clarification I recommend getting in touch with our Early engagement team.

 

Ari