I have missed paying some of my employees the minimum $1,500 in the first JobKeeper fortnight. Can I still apply for JobKeeper for that first fortnight?
The information that the ATO has released states that for the first two JobKeeper fortnights, it will accept the minimum $1,500 payment for each fortnight has been paid by an employer even if it has been paid late. However, the amounts must be paid by the 8th of May. This means that a combined payment of at least $3,000 must be made by the 8th May to each eligible employee.
The Commissioner is given the power to treat a particular event that happened in a fortnight as having happened in another fortnight, if it is reasonable to do so in the opinion of the Commissioner.
Timing of payment
Does a business have to wait until it lodges its BAS before it gets JobKeeper payments from the ATO?
No. The rules state that the Commissioner must pay the JobKeeper payment no later than the later of:
- 14 days after the end of the calendar month in which the fortnight ends; and
- 14 days after the Commissioner is satisfied that the requirements of JobKeeper have been satisfied. The Commissioner has discretion to conclude that the requirements have been satisfied in certain circumstances.
Never Lodged a BAS
A sole trader has an ABN but has never lodged a BAS because it is not registered for GST and does not deduct PAYG withholding. Can the entity claim JobKeeper for the owner of the business?
First, it should be remembered that only one JobKeeper payment can be claimed for one individual. If the individual has another source of income, other than the business, the JobKeeper payment may have been claimed for the individual by another entity.
It will be assumed that the entity had an ABN on 12 March 2020.
The fact that a business has not lodged a BAS does not prevent it from satisfying the decline in turnover test. This is due to the way that the "projected GST turnover" and "current GST turnover" have been defined. The ATO also says “The amounts included in calculating projected GST turnover and current GST turnover are the same regardless of whether you are currently GST registered”.
On the assumption that the individual satisfies all of the requirements, including being actively engaged in the business, there can be a claim for JobKeeper provided the individual has lodged his/her income tax return for the year ended 30 June 2019 that includes assessable income from the business. The tax return would need to have been lodged by 12 March 2020, or a later time allowed by the commissioner.
The Commissioner has discretion to allow further time, but only in limited circumstances, and this includes if the entity:
- did not have a requirement to lodge its 2018-2019 return until after 12 March 2020
- deferred its lodgment under an extension of lodgment date the ATO initiated.
- Entity’s included in a registered agent’s lodgment program and the your lodgment due date is after 12 March 2020
- Entity’s that have an automatic ATO lodgment deferral in place because they have been affected by the Australian bushfires in late 2019/early 2020, and you are not registered or required to be registered for GST, so will not have lodged a BAS before 12 March 2020.
BASs and Tax Returns are Late
What if a client is behind several quarters in relation to the lodgement of BASs and is also behind with the lodgement of income tax returns? Is that a problem with JobKeeper?
This depends on whether the client is claiming for an eligible employee or whether the client is claiming for a non-employee business participant.
If an employer is claiming for an employee, the Rules do not have any reference to notifying the Commissioner of assessable income or GST taxable supplies. As discussed above, the projected GST turnover and current GST turnover, for the purposes of the decline in turnover test, are based on the value of supplies made, or likely to be made in a period. That is a question of fact and does not rely on what has, or has not, been disclosed in a BAS or income tax return. However, in the practical operation of the JobKeeper scheme, the ATO is likely to check information given to it against lodged BASs and income tax returns. If those documents haven’t been lodged, we do not know what the ATO will do.
If the client is claiming for a non-employee business participant (e.g. a partner in a partnership or a beneficiary in a trust) the lodgement of BASs and income tax returns is made specifically relevant by the integrity rules. These require (among other things) that either:
- An amount was included in the entity’s assessable income for the 2018-19 income year in relation to it carrying on a business and the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the amount should be so included; or
- The entity made a taxable supply in a tax period that applied to it that started on or after 1 July 2018 and ended before 12 March 2020.Further, the Commissioner must have had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the entity had made the taxable supply.
It should be noted that for the purposes of this test:
- the entity is assumed to be registered for GST (even if it isn’t); and
- All supplies are assumed to be taxable supplies (i.e. not GST-free nor input taxed).
 Subsections 11(6), (7), (8) and (9) of the Rules.
More than One Business in a Family
If Mum has her own business and Dad has his own business, what happens under JobSeeker?
In most situations, the fact that related people own different businesses will not affect the applicability of JobKeeper to either business. If Mum is not an employee of her business and Dad is not an employee of his business, they will able to claim JobKeeper payments in relation to their own businesses for themselves, provided all other relevant conditions have been satisfied.
If an individual operates multiple businesses, when determining whether the decline in turnover test has been satisfied, can the individual satisfy that for just one business or are all businesses involved in the calculation?
The analysis needs to be done by including the supplies of all businesses. This is due to the wording of the definition of “projected GST turnover” in the GST law. Projected GST turnover is “the sum of values of all the supplies that you have made, or are likely to make, during that period…”. There is no distinction between the enterprises that the individual operates.
Late Entry Into the JobKeeper Scheme
What happens if a business is unsure about whether it will have a 30% decline in turnover for the June 2020 quarter in April and May 2020, but realises that it will have such a
decline on say, 10 June 2020?
Can it still enter the JobKeeper scheme?
Can it (legally) back-date its involvement to 30 March 2020?
The JobKeeper scheme operates prospectively only (except for transitional provisions for the first two fortnights). The scheme operates in respect of JobKeeper fortnights. If an employer comes to the conclusion on 10 June 2020 that it is going to have a greater than 30% decline in turnover and satisfies all of the requirements of the JobKeeper scheme, it will be entitled to JobKeeper payments for the JobKeeper fortnight ending 21 June 2020 and following.
Sole Trader Gets a Job
A business owner has ceased trading for a time due the coronavirus. He is not employed by his business. On 3 April 2020, he decides to get a job to supplement his income but will quit his job and return to his business when the economy recovers. Can he get the JobKeeper payment?
If he wants to be treated as an “eligible business participant” in relation to his
business, he will need to continue to be actively engaged in the business. Will
his new job commitments enable him to do this? This is a question of fact. The policy
is that the individual will try to keep running his business, if that is permitted. Note
that he will not be able to obtain the JobKeeper payment from his new employer
because he was not employed as 1 March 2020 with that employer. Also, the
business owner will not be open to claim the JobKeeper payment in relation to his
own business if he is employed as a full-time or part-time employee with his new
employer. The JobKeeper payment may only be claimed by his own business if he is
a casual employee of this employer.