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Re: Jobkeeper - Cash Basis Reporting

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Newbie

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Hello,

Perhaps a little early/eager to ask, but as a sole trader who reports on a cash basis (when income is recieved into bank account), I wanted to clarify what the best practice is with the jobkeeper payments. If the jobkeeper payment I recieved for April only came in May, I'd account for it via the cash basis in May. However come July, I will recieve the payment for June and of course won't have reported it in its respective financial year since it will be a new financial year in which it will be accounted for via cash basis reporting.

Is it still okay to report jobkeeper this way? Will this affect how jobkeeper is paid and elegibility criteria since it is taxable income for the respective period?

Apologies if this isn't as clear as it could be - it's all quite confusing during a stressful time.

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Hi @CleanerTax

 

When you use the words cash basis I would normally associate that to GST however I assume here you are talking about Accounting methods for Business income. The rules outlined there would apply accordingly.  Jobkeeper is a subsidy or reimbursement for wages paid however yes it does form income. See Tax consequences.

 

I hope that assists.

MarkA

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Best answer

Community Support

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Hi @CleanerTax

 

When you use the words cash basis I would normally associate that to GST however I assume here you are talking about Accounting methods for Business income. The rules outlined there would apply accordingly.  Jobkeeper is a subsidy or reimbursement for wages paid however yes it does form income. See Tax consequences.

 

I hope that assists.

MarkA

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Newbie

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Hi Mark,

Yes I was referring to accounting methods. Thanks so much for your response!

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Hello Mark A.,

 

For a sole trader with no employees using the accruals basis accounting method, would the JobKeeper payments made in July-October 2020 be included on a 2019-2020 income tax return, or a 2020-2021 income tax return?  JobKeeper is not a "work done" type of income, but the "work" of applying would have been "done" the 2019-2020 income year, which (as I understand) would normally be used for the accruals basis, but it seems weird to use 2019-2020 for passive income.

 

Thanks,

Jay