JobKeeperPayment Archives - Accounts NextGen

ATO doesn’t consider the JobKeeper payments as a part of aggregated turnover

ATO doesn’t consider the JobKeeper payments as a part of aggregated turnover

JobKeeper payments have been considered as assessable income. But there are certain concerns regarding the status of JobKeeper payments as whether they fall under ordinary income or statutory income.

For those who don’t know about it, under this scheme, the business which has been affected the most due to the outbreak of Corona COVID-19 will get money from the government (in the form of subsidy). This assistance is being given to all such businesses so that the employees of all such businesses will get the wages.

As per s328-120, if the JobKeeper payments would become a part of the aggregated turnover, it would decide whether some entity is eligible for different concessions and other measures, instant asset write-offs, base rate entity tax rate, and the refundable R&D tax offset.

Now ATO has made it very clear that the JobKeeper payments are ordinary income but are not derived in the ordinary course of business. So, they are not included in aggregated turnover.

There were certain confusions about whether the JobKeeper payments fall under the category of ordinary income or not in order to calculate the aggregated turnover as said by Tracey Dunn. When asked about this situation, she said the following, “After including the JobKeeper payments in aggregates turnover, there would be some major consequences. Things like CGT concessions of small businesses, the income tax concessions of small businesses, other R&D involvements can push many businesses to threshold after this decision.”

Here are some changes that have taken place in this scheme:

  1. The JobKeeper scheme has been extended until March 28, 2021.
  2. A detailed test of the turnover of the applicant’s firm will determine his eligibility.

Some of the factors that determine the eligibility for this scheme include:

  1. For the businesses having a turnover of at least $1 billion or more and the latest turnover has been reduced by no less than 50%.
  2. The businesses which have turnover less than $1 billion then their turnover of this period should be reduced by 30% or more.

To get the benefits of this scheme, the businesses should apply to the concerned department of the government along with the documents showing a downfall in the turnover. They also have to show the total number of employees working in their firm. But the name of the employees should be mentioned in the book of that business from March and that employee must be active in the same business at present.

It was known to the RSM and they asked about it to the experts. “The ATO has responded very quickly and they modified this information. So, it is clear that they consider JobKeeper payments as an ordinary one and assessable to the employer. But it can’t be included while calculating the aggregated turnover.”

Get ready! It’s the tax time.

Probably this year went through loads of difficult shifts; some unusual and unseen incidents have affected the economy worldwide. All of us did work from home, while most of us relied on the government’s assistance.

But, as the end of the financial year is nearer, the lines of worriment may be visible on your forehead. However, for Australians, it’s not a hectic situation, as they know how and why it’s essential for them.

Along with this, since loads of happening came into existence over time; hence most of you might be curious to know the latest updates on tax returns. Therefore, in light of that curiosity, below is some latest information for you.

If you don’t know when tax returns are due

Because the deadlines vary for tax seasons, you may have to face-off with difficulties. Hence you can take the help of agents who’ll guide on every milestone.

If you want to use an agent

In most instances, you should only seek professional tax agent help. For example- they are expert in filling the tax return and always keep you up-to-date with the latest policies.

If you receive Job Keeper payments

Job keeper payments are, however, taxed as a regular income. Hence beware, the payment is viewed as salary/wages/allowance/ by ATO.

If you receive Job Seeker payments

Like job keeper, jobseeker payments are also taxed, and ATO views it as ‘government payments and allowances.’

If you withdrew some of your superannuation early

According to ATO assistant commissioner, Karen Foat, any withdrawn amount from super are tax-free if you receive early access to your super due to COVID-19.

If you run a business

Taxpayers who don’t pay instalments for GST won’t be affected because the government has decided to suspend the indexation entirely due to coronavirus.

If you run a self-managed superannuation fund (SMSF)

You can take some advice from a charted accountant on behalf of SMSF.

Employers’ frequently asked JobKeeper questions

Source: https://www.ato.gov.au/

General

Question: What’s the difference between JobKeeper and JobSeeker?

Answer: The JobKeeper scheme supports businesses to retain their employees by contributing to their salary and wages and is administered by the ATO. Eligible businesses are required to register with the ATO to receive these payments for their eligible employees.

JobSeeker payments are a form of income support available to eligible individuals and are administered by Services Australia. These payments are paid directly to the individuals and not to their employers.

Question: I pay my employee $1,400 per fortnight before tax, plus I contribute $133 super per fortnight to meet super guarantee obligations. Does this qualify for the minimum $1,500 payment?

Answer: No. The minimum $1,500 does not include the amount you contribute as super to meet your super guarantee obligations. However, it does include super contributions made under a salary sacrifice arrangement.

Question: Do I need to be registered for GST to qualify for JobKeeper?

Answer: No, you don’t need to be registered for GST, but there are other requirements. See Employers.

Question: I run a business but do not have employees. Am I eligible for JobKeeper payments?

Answer: Yes, you may be eligible for JobKeeper payments where certain conditions are satisfied. See Sole traders and other entities.

Question: Does an employer have to be assessed by the ATO as being eligible before any payments are made?

Answer: Eligibility for JobKeeper payments is a self-assessment process, with the ATO administering the payment. However, if a payment is made and we later determine that the entity was not entitled to that payment (or was entitled to a lesser amount) the entity will be required to repay the overpaid amount.

Question: What if my pay cycles do not correspond with JobKeeper fortnights? Do I have to change my pay cycles?

Answer: You are not required to change your pay cycles to correspond with JobKeeper fortnights. What is important is that you pay your employees at some time during the JobKeeper fortnight.

However, if you usually pay your employees less frequently the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a monthly cycle, you will still be entitled to receive a JobKeeper payment if your employees received the monthly equivalent of $1,500 per fortnight.

Employee nomination notice

Question: Why do I need to get my employees to fill out the JobKeeper Employee Nomination Notice?

Answer: An employee can only nominate one employer for JobKeeper. The employee must agree to be nominated by you for JobKeeper. If the employee does not complete the nomination notice, you can’t claim JobKeeper for them.

Question: Will the ATO accept a digital self-generated employee nomination notice?

Answer: For practical reasons, an employer may choose to create their own digital employee nomination notice, but it must include key information. See Creating your own employee nomination notice.

Your employee’s signature is not required by the ATO but can be requested by you. Employees can submit their nomination notice to their employer through their internal business process (for example, a business’s HR portal) or their own form of communication channel (for example, an email).

Turnover

Question: Can businesses qualify for JobKeeper payments after April, for example, if my business experiences a downturn in the future?

Answer: Yes. If you do not satisfy the turnover test for the current month or quarter, you can still assess your eligibility at a later date. To qualify later, the turnover month can be May, June, July, August, or September 2020, provided the fortnight you are qualifying for has ended that month or an earlier month. If the turnover for a quarter is being used, it can be the quarter:

  • from 1 April 2020 to 30 June 2020
  • from 1 July 2020 to 30 September 2020, but only if first seeking to qualify for fortnights ending in July 2020 or later.

Once you satisfy the decline in a turnover test, you do not need to retest again.

Question: Do I have to show that it is COVID-19 that caused a decline in the turnover of my business?

Answer: No. It does not matter whether it is COVID-19 or the subsequent effect on the economy that has caused the drop in turnover, provided the turnover has fallen by the required percentage and you satisfy the other eligibility criteria.

Question: My business suffered a steep decline in turnover in March, but I’ve changed to a new business model and I may build the business up again soon. Does this mean I lose JobKeeper?

Answer: No. You only need to satisfy the decline in a turnover test once to be entitled to JobKeeper. For example, satisfying it for March 2020 (compared in March 2019) is sufficient, even if your business recovers to previous levels after this.

There are ongoing reporting obligations for current and projected GST turnover, but even where these show a recovery of turnover they don’t affect eligibility.

Question: What happens if my predicted fall in turnover happens to be incorrect, so that the fall ends up being less than the 30% or 50%?

Answer: This does not necessarily mean you are ineligible for JobKeeper.

Your projected GST turnover is a point-in-time test and needs to be a reasonable assessment of what was likely at the time you calculated the test. If, at a later stage, it eventuates that your actual turnover for your test period is greater than your prediction of your projected turnover, you do not lose access to JobKeeper. We will accept your assessment of these turnovers unless we have reason to believe that your calculation of your projected GST turnover was not reasonable.

If there is a significant difference between your projected turnover and what eventuates, we may need to assess whether your assessment was reasonable, so you need to keep good records of your calculations.

Integrity rules are in place to deny or reduce an entitlement to JobKeeper payments if schemes are contrived to ensure payment conditions are satisfied, such as temporarily reducing or deferring turnover. Exceeding your turnover predictions by itself does not trigger these integrity rules.

Our compliance focus will be particularly directed toward schemes where there has not been a genuine fall in turnover in substance, but arrangements are contrived to ensure the turnover test is satisfied.

Our Offices

Melbourne Office
Level 19,
180 Lonsdale Street
Melbourne, VIC 3000

(03) 9015 8540

View on Map

Sydney Office
01 Sussex St Darling Park
Tower 2 , Levels 20 & 21
Sydney, NSW 2000

View on Map

Brisbane Office
Level 27,
480 Queen St
Brisbane, QLD 4000

(07) 3011 6316

View on Map

Geelong Office
73 Malop Street Geelong VIC 3320

(03) 52982000

View on Map

Adelaide Office
Level 5, Tower 2,
121 King William Street
Adelaide, SA 5000

(08) 8423 4554

View on Map

Perth Office
Level 29 221,
St Georges Terrace
Perth, WA 6000

(08)9288 0603

View on Map

Available 24/7
T: 1300 22 36 39

Emails
info@accountsnextgen.com.au

Translate »
Book Appointment