Can businesses that report quarterly GST choose to assess turnover on a monthly basis?
Yes, the periods for determining the decline in turnover can be periods of one month or three months, where:
- if a one month turnover test period is being used, it must be one of the following months:
- March 2020
- April 2020
- May 2020
- June 2020
- July 2020
- August 2020
- September 2020; or
- if a three month period is being used it must be one of the following periods:
- the quarter that starts on 1 April 2020;
- the quarter that starts on 1 July 2020.
An entity’s BAS lodgement cycle is irrelevant in determining the decline in turnover. An entity can choose any one of the 9 time periods in which to make the comparison. However, the decline in turnover test must be satisfied within one of the above periods before the employer is entitled to the JobKeeper payment.
Can a business that was established in November 2019 and effectively started trading in January 2020 receive the Cash Flow Boost and/or JobKeeper assistance?
Can both partners in partnership apply for JobKeeper assistance?
With regard to the Cash Flow Boost, the 30 June 2019 income tax return will not have been satisfied, therefore the requirement to lodge a BAS on or before 12 March 2020 will need to be satisfied. This is probably unlikely.
Nevertheless, the Commissioner has a discretion to permit a later time for the required notification to the Commissioner.
ATO information indicates that businesses in this position should contact the ATO and provide additional supporting documents to establish the business’ eligibility.
With regard to JobKeeper, where an application is being made for an “eligible business participant”, what is said above in relation to the Cash Flow Boost will also be applicable. Also, in relation to JobKeeper, it will be necessary for the business to satisfy the alternative test for the decline in turnover.
No. While an “eligible business participant” who is involved in the daily running of the business can be nominated to receive JobKeeper assistance provided they meet the eligibility criteria, only one person can be nominated.
What is a business’s monthly reporting obligations under the JobKeeper rules?
An entity that is entitled to a JobKeeper payment must notify the Commissioner of:
- its current GST turnover for the reporting month; and
- its projected GST turnover for the following month
Eligible ACNC-registered charities and gift deductible recipients must also report the amount of certain donations that they have received or expect to receive.
The report must be made within 7 days of the end of the reporting month.
Additionally, there are pre- and post-payment record keeping requirements to enable the Commissioner to verify information provided.
To qualify for JobKeeper assistance is it necessary that a business has lodged a BAS or lodged an income tax return?
Yes, where the JobKeeper assistance is being sought for an “eligible business participant”. If the JobKeeper assistance is being sought for a normal employee/employer relationship, the lodgement of activity statements or tax returns is not required.
Where an entity is seeking JobKeeper assistance in relation to an “eligible business participant”, it is a requirement that:
- 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 (e.g. a tax return) on or before 12 March 2020 (or a later time allowed by the Commissioner) that the amount should be so included,
- 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; and
- the commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the entity had made the taxable supply.
How do those closely held tax entities, that have not had to register for STP yet, go about applying for JobKeeper?
The registration process is detailed on the ATO website. Go here https://www.ato.gov.au/general/jobkeeper-payment/In-detail/JobKeeper-guide---employers-not-reporting-through-STP/
If there is no work for employees and they have been stood down, but are retained on the books, are they entitled to JobKeeper assistance?
Yes. Provided the employees were employed on 1 March 2020 and meet all other requirements.
Can employees that have been with the employer less than 12 months qualify for the JobKeeper assistance?
Yes employees, other than casual employees, who have been with their employer less than 12 months are eligible for JobKeeper assistance provided that they were an employee of the organisation as at 1 March 2020 and satisfied the other “eligible employees” tests.
Does an employer need to be registered for GST to be eligible for JobKeeper?
There is nothing in the legislation or the Rules that requires an employer to hold a GST registration to be eligible for the JobKeeper assistance.
Can an eligible employer pick and choose eligible employees?
The JobKeeper scheme is “one in all in”. An employer who meets the eligibility requirements cannot select which eligible employees will participate in the scheme. However, an employee can choose not to be involved with the scheme with a particular employer.
Is a sole trader who has employees, themselves eligible for JobKeeper assistance?
Yes, provided they meet the “business participant” eligibility criteria.
Will the JobKeeper payment attract GST when paid to GST registered businesses?
According to information in the Explanatory Statement to the JobKeeper rules, GST does not apply in relation to JobKeeper payments made to employers because the payments are not consideration for supplies made by employers to the Government.
What is the situation for a religious institution with revenue from membership fees (30%) and rental income from a tenant (70%)?
The basic decline in turnover test works by comparing the projected GST turnover of the entity for a period (the turnover test period) with its current GST turnover as calculated for a relevant comparison period (the comparison turnover).
If the rent received is residential rent, this is input taxed and is not included in the GST turnover calculations. If it is commercial rent, it will be included.
It is not usual for a religious institution to have membership fees as opposed to gifts made to the religious institution. The membership fees could either be consideration for a taxable supply or consideration for a GST free supply. In either case, they are included in the calculation to determine the decline in turnover. It is noted that there is a special provision in the decline in turnover legislation that deals with entities that are ACNC-registered charities (other than a deductible gift recipient) in relation to gifts made to the entity. Such gifts will be treated as being the consideration for a supply equal to the amount of the gift (if the gift is money) or the market value of the gift (if the gift is not money).
Are employees made redundant before 30 March 2020 and not reappointed eligible for JobKeeper assistance?
Are partner visa holders (not citizens or permanent residents) eligible for JobKeeper payment?
Only individuals that were Australian residents (within the meaning of section 7 of the Social Security Act 1991); or a resident of Australia for the purposes of the Income Tax Assessment Act 1936 and a holder of a special category visa referred to in the regulations under the Migration Act 1958 as a Subclass 444 (Special Category) visa, as at 1 March 2020 are eligible employees.
Where a business with long term casual employees was purchased within the last 12 months, and the business satisfies the decline in turnover test, are the employees eligible for JobKeeper assistance?
The Rules provides some flexibility for any changes in ownership of a business and movement of employees within the same wholly-owned group. It means that employees are not disadvantaged if these events, which are ordinarily beyond their control, occur. Refer to section 9(6) of the JobKeeper rules.