Announcements
Have you sold crypto, shares or property? Our new capital gains tax guide has info about cost bases, calculations & more! Still got questions? Ask the Community!

ATO Community

Jobkeeper 2.1 - Alternative Test with Cash basis

Newbie

Views 572

Replies 5

Can someone please clarify if there are any additional options when applying the Alternative Test, significant change in turnover.

 

When on the cash basis, selecting a single month as a comparison (eg Feb 19 to Feb 20) is simply not representative.  For example, I have a client who had large cash collections in Jan 20, hence a lower Feb 20 but if you compared quarter on quarter, the turnover is significantly higher (more than 50%) in the Dec, Jan, Feb period but they are being disadvantaged due to this being a month by month comparison.

 

Are there any other options that I am missing here ?

 

I have already calculated the test under the scenarios shown in the ATO factsheet but to no avail.  If, however the significant increase in turnover was based on a 3 month period (instead of 1 month), they would be eligible - this seems very unfair.

 

Thanks

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 2

Hi @Stakka,

 

 

When using the alternative tests, they must be applied exactly as is outlined. For the significant increase in turnover tests to determine if the entity experienced the significant increase in turnover, you must use the month comparisons as outlined.

 

When determining if the entity shows a substantial increase in turnover for the test for a business that has had a substantial increase in turnover:

 

If you're using the September 2020 quarter as the period to determine the increase in turnover immediately before, you must use the month of June 2020.

 

If you're using the December 2020 quarter, you must use the month of September 2020.

 

If you're using 1 March 2020, then you must use the month of February 2020.

 

If you show the significant increase in turnover, you then compare the three months immediately prior to your test determining test period (for example, if using 1 March 2020, it would be December 2019, January 2020, February 2020) to the September 2020 quarter for JobKeeper extension 1.

 

There are no further Commissioner's Discretion options beyond the already available alternative tests.

 

Keep in mind if a client is not eligible for JobKeeper extension 1, they can still be eligible for JobKeeper extension 2.

5 REPLIES 5

Devotee

Replies 4

Jobkeeper extension is NOT based on monthly figures - it is based on actual turnover in the September quarter of 2020 when compared to actual turnover in September 2019 quarter

Newbie

Replies 0

That is correct for the basic test but not for the Alternative Tests.

Most helpful response

ATO Community Support

Replies 2

Hi @Stakka,

 

 

When using the alternative tests, they must be applied exactly as is outlined. For the significant increase in turnover tests to determine if the entity experienced the significant increase in turnover, you must use the month comparisons as outlined.

 

When determining if the entity shows a substantial increase in turnover for the test for a business that has had a substantial increase in turnover:

 

If you're using the September 2020 quarter as the period to determine the increase in turnover immediately before, you must use the month of June 2020.

 

If you're using the December 2020 quarter, you must use the month of September 2020.

 

If you're using 1 March 2020, then you must use the month of February 2020.

 

If you show the significant increase in turnover, you then compare the three months immediately prior to your test determining test period (for example, if using 1 March 2020, it would be December 2019, January 2020, February 2020) to the September 2020 quarter for JobKeeper extension 1.

 

There are no further Commissioner's Discretion options beyond the already available alternative tests.

 

Keep in mind if a client is not eligible for JobKeeper extension 1, they can still be eligible for JobKeeper extension 2.

I'm new

Replies 1

Hello

 

This question is regarding the March 1 example (Feb 19 to Feb 20 significant growth alternate test) for JobKeeper Extension 2 (Jan to March 2020).

 

In this situation are earnings for Dec 19 to Feb 20 compared to earnings for October to December 2020 to determine eligability for job keeper extension 2 (Jan to March 2020)?

 

Thank you

 

 

ATO Community Support

Replies 0

Hi @Chris99,

 

The short answer is yes.

 

Once you've determined you're eligible to use the test for a business with a substantial increase in turnover:

 

If you used the period immediately before 1 March 2020, then to determine if your turnover has declined by at least 15%, 30% or 50%, compare:  

  • your entity’s current GST turnover for December 2019 to February 2020, with
  • the applicable current GST turnover in the turnover test period (the September or December 2020 quarter).

 

This means for both the extension periods, you will compared against December 2019 to February 2020.