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Re: Jobkeeper payment - business participant

I'm new

Views 1099

Replies 8

One of my clients was a sole trader, but transferred the business to a company on 31 January 2020. I understand the turnover test for new entities and the company passes at this stage. My question is that as a new entity, no 2019 year tax return is required and the first quarterly March 2020 quarter BAS statement was lodged on 17 April 2020. The entity is considering nominating a business participant for the Jobkeeper payment, but would require Commissioner discretion as no activity statement or tax return has been lodged prior to 12 March 2020.

 

The company had an ABN before 12 March and is on a tax agent lodgment program. The company in all other facets appears an eligible business entity. How do I seek discretion, or do I continue with the Jobkeeper payment process as it appears that discretion would be granted in this case.  

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 5

Hi @Faron ,

 

Thanks for your question.

 

We have implemented an alternative turnover test that fits your circumstances.

  • Your entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020

 

                    - Test for a business that started business after the comparison period

You can apply the first alternative test in this category if your entity commenced business

before 1 March 2020 but after the relevant comparison period.

 

Alternative test 1

If your business commenced business before 1 February 2020:

  • you should compare your average monthly GST turnover since your entity started against the applicable projected GST turnover to determine if your GST turnover has declined by 15%, 30% or 50% or more as applicable
  • your average monthly GST turnover will be the total of the current GST turnovers for each whole month since your entity started business divided by the number of those whole months.

There's a great example that helps give clarification below the Alternative test 1 information.

 

Eligible employers has been updated, please re-check your eligibility based on the update

Refer to Partnership, trust or company to proceed with applying.

 

I hope this helps and let us know if you have any further questions,

JasonT

8 REPLIES 8

Community Moderator

Replies 0

@Faron 

 

We will check this out for you.

 

KylieS

Most helpful response

ATO Community Support

Replies 5

Hi @Faron ,

 

Thanks for your question.

 

We have implemented an alternative turnover test that fits your circumstances.

  • Your entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020

 

                    - Test for a business that started business after the comparison period

You can apply the first alternative test in this category if your entity commenced business

before 1 March 2020 but after the relevant comparison period.

 

Alternative test 1

If your business commenced business before 1 February 2020:

  • you should compare your average monthly GST turnover since your entity started against the applicable projected GST turnover to determine if your GST turnover has declined by 15%, 30% or 50% or more as applicable
  • your average monthly GST turnover will be the total of the current GST turnovers for each whole month since your entity started business divided by the number of those whole months.

There's a great example that helps give clarification below the Alternative test 1 information.

 

Eligible employers has been updated, please re-check your eligibility based on the update

Refer to Partnership, trust or company to proceed with applying.

 

I hope this helps and let us know if you have any further questions,

JasonT

Newbie

Replies 4

Hi, I hope you can help,
We are a partnership husband and wife.
We had no employees in September 2019 when my husband took leave in September and October. Returning to work October.
My question : we had no employees in our comparison period 2019,
But in January 2020 we took on an apprentice. So now we have an employee.
Are we still eligible to use the alternative test to compare turnover given that our position in the test period 2019 had zero employees?

Former Community Support

Replies 3

Hi @Sharnee77

 

Good question - I will try to answer your question in two parts :-

 

1) In terms of employee eligibility, please consider Your eligible employees. There are some rules on under 18 yo's (if this is your apprentice) as quoted -

 

"Employees who were 16 or 17 years old on 1 July 2020 and not previously eligible can become eligible for a JobKeeper fortnight starting on or after 3 August 2020 if they:

  • satisfy the 1 July 2020 test and other eligibility requirements, and
  • either were
    • independent on 1 July 2020, or
    • not in full-time study on 1 July 2020." (italics added)

To 'meet the 1 July test' (see above link), in terms of employment, as long as the employee started before 1 July 2020, then he/she would qualify (except extra conditions for a 'long term casual')

 

Another thing to consider is the relationship between a business claiming a wage subsidy through the Department of Education, Skills, and the Employment (DESE) and Jobkeeper at the same time. Please see this ATO Community thread re: job keeper apprentice subsidy for more details (linked doc was current as at 1 April 2020 - may need to check with DESE).

 

2) In terms of an Alternative test, please consider this one for sole traders/partnerships have had leave due to sickness etc.. For example, if an eligible business participant had leave in a comparison period in 2019, then you need to (quote from this webpage), "Use your current GST turnover from the month immediately before the month in which the sole trader or partner did not work due to sickness, injury or leave and multiply that by three". So, if leave occurred in Sept-Oct 2019 for the participant, then the business would need to use the August 2019 GST turnover x 3, and compare this with the turnover for each Extension quarter (Sept & Dec 2020 quarters). It doesn't matter if the employee was working for the business during the comparison period or not (dealing with business turnover, not considering expenses).

 

 

 

Newbie

Replies 2

Hi Wainwright,

 

Thanks for the update. Do you know if there was any specific reason why with the alternative test they changed the rule from Month AFTER (original JobKeeper) to Month BEFORE (Jobkeeper 2.0) the actual period of absence through sickness, leave to test. Unfortunately that 'one' word change will have a devastating effect on my business as I will not be able to claim Jobkeeper 2.0 now.

 

Kind Regards

Paul Morris

 

 

 

Newbie

Replies 1

I feel for you, 

we are in the exact same position now that they have changed the rest to "before" 

Newbie

Replies 0

Hi Sharnee

Yes it seems a bit strange that they would change the word 'After' to 'before' as it appears everything else seemed to stay exactly as the original Jobkeeper 1.0

Hope your business doesnt suffer too much

Paul

ATO Community Support

Replies 0

Hi @Peely and @Sharnee77

 

Sorry but we are unaware of the reasons why that test differs for the extension.

 

You can monitor our website for JobKeeper updates in case we get new content that may apply to your situation.

 

All the best.

 

Ari