JobKeeperPayment Archives - Accounts NextGen

The sole trader in a win-win state for Jobkeeper test case

The sole trader in a win-win state for Jobkeeper test case

The AAT has overturned the decision from the Australian Taxation Office to deny a sole trader access for Jobkeeper after the Administrative Appeals Tribunal traced down that its backdated ABN registration has satisfied the integrity rules set within the norms. In December 2020, the Administrative Appeals Tribunal ruled out te sole trader Jeremy Apted was entitles to the JobKeeper program despite not keeping and holding an active ABN before 12 March 2020. This was under an integrity rule contained in the $90 billion wages subsidiary scheme. According to Accounts NextGen sources Mr. Apted, is a known specialist retail valuer and held an ABN since back in 2012 but later canceled his registration in mid-2018 as he was about to retire.

On the contrary, the retirement did not work for Mr. Apted and he resumed providing valuation services in Sept 2019. However, he failed to reactivate his ABN because he has assumed that he only required one if he was in need of a bed registered for GST. On 31 March 2020, Mr. Apted applied online to have his ABN reinstated along with the registrar and eventually backdating the reactivation on 1 July 2019. This was happening after requesting further information on his business history. It is important to acknowledge that after satisfying all the other eligibility requirements. Mr. Apted applied for the Jobkeeper but which was later denied by the Commissioner of Taxation on the basis that at the same point of time on 12 March 2020, Mr. Apted was left with no active ABN.

Assuming the Registrar did not perform his tasks and duties

If we look back and review the first JobKeeper test case the Administrative Appeals Tribunal’s president Justice David Thomas along with Deputy president Bernard McCabe has found that the Australian Business registrar had been satisfied with the historical information of Mr. Apted and appropriately adjusted the date of registration effect to 1 July 2019 that is effectively making Mr. Apted eligible for the JobKeeper.

As per Justice Thomas, an Mr. McCabe, The Australian Business Number act explicitly authorizes the Registrar to consider a date of the effect that predates the registration application where he is very much satisfied and assumes it is very much appropriate to process the same. However, Accounts NextGen explains that the commissioner is worried about the business that was not genuinely active and might get into the violated rules and anybody can access the benefits under the Rules. These Rules are belatedly applied for an ABN and hence convincing the registrar to make amendments in the Australian Business number and convince the Registrar to change the dates of effect on the dates prior to 12 March 2020.

Further discussions on the topic

It is assumed that the Registrar does not do his task and duties according to the requirements and then satisfy himself with very matters the treasurer considered. It is further understood by Accounts NextGen that there is no evidence provided at the hearing to suggest the Australian Business number registration process lacks integrity or not. In such circumstances, the authorities are satisfied with it assumed as an approach that operates according to their respective terms.

The take by Administrative Appeals Tribunal 

The Tribunal stated that the taxpayers are in similar circumstances as Mr. Apted, and as a result, he should engage with the established Australian Business Number registration process, with any of its have a pre 12 March 2020 date of the effect that satisfying the integrity rule that exists within the JobKeeper program. Accounts NextGen further noted that the senior tax controversy partner who led the case on behalf of Mr. Apted, appeals and explains that the decision would be welcomed by the small businesses that are locked out because of the 12 March 2020 integrity rule.

This year was seen to be a difficult year to survive and it’s been disappointing to see all the small businesses dissolving and the owners facing the word economic shift which is affecting them adversely. This requires access that requires support for simply not meeting an arbitrary deadline. In the scheme of foreseeing the Jobkeeper and the other measures have cost and affected this country, these are an important fact to understand that the small businesses claims are costing nothing. However, in view of such businesses and people, this is everything they mean.

In a conclusive viewpoint:

According to the Tribunal, their judgment was about the Jobkeeper scheme to provide the support for an active business that is facing pandemic-related challenged to survive. This decision will be an act that will support the small businesses a vital boost to step in this new year with a fresh start. It is hence understood that the Australian Taxation Office is currently considering the decision of the Tribunal along with its implications that include whether to appeal or not. Furthermore, the information is set to base and structure in the forthcoming weeks.

ATO takes back $120 million from JobKeeper funds and highlighted new eligible areas

ATO has recovered about $120 million from the JobKeeper. It was done because a lot of businesses made severe mistakes while claiming assistance from this scheme. New guidelines have been released by the ATO for JobKeeper.

We came to know about it on Tuesday when second commissioner Jeremy Hirschhorn that because of some mistakes made by the businesses claiming assistance from JobKeeper, ATO has permanently stopped the payments of $200 million and it has started reviewing other $100 million. Considering those who have already applied for it but have not got the money yet, the ATO has stopped the other $350 million.

A total of $69 billion has been paid since the JobKeeper scheme was launched in March. Of that $69 billion, about $120 million has been taken back by the ATO.

Mr. Hirschhorn also said that the government has tried to stop the payment to only those who have made reckless mistakes. In the cases where honest mistakes have been made, the money has been released, but we want to make it clear that these people too won’t get JobKeeper payments in the future.

The new strategy for JobKeeper 2.0:

The government has extended JobKeeper 2.0. Based on the mistakes made by the people claiming money from this scheme, there are some new areas where the government will be focusing now. First, it will test the claimed decline in the turnover of the firms who have applied for this scheme, and second the government will point-out the persons who are not eligible for it but they are claiming high-tier rates.

To avoid further mistakes, ATO will closely monitor the decline in turnover by studying the GST turnover in September. When an applicant is chosen for review, he will be required to submit documents for proving their claim. Those documents include trading and sales records, correspondence of customers and sales contracts, invoices issued by you, and bank statements.

The ATO said that they will ask the businesses which are claiming higher rates about how the employees of that firm have met the 80-hour threshold and the firm will be asked to present the documents as evidence for it.

Here is a list of documents that can be used to prove the claim includes payroll data, contracts of employment, business diaries, logbooks and appointment books, invoices, attendance records, etc.

Along with these new areas in focus right now, the focus areas of JobKeeper that were introduced in the beginning are still the same. Here is a list of conditions that devoid a business from getting the benefits of JobKeeper 2.0:

  • If they are claiming for more than one business by showing the other business participant as an employee.
  • If the businesses fail to meet the conditions set for wages.
  • Claiming for business partners who are not eligible.

Are you eligible for JobKeeper?

This information is for all those who have applied for JobKeeper. It is time for them to check whether you are eligible for this scheme any more.

A business participant is eligible for this scheme if he is not employed in your business but is active in one of your business’s operation. He might be a person who can manage the sales of your business or he has a say in making the strategy for your business.

Here are all the details of the business participants who is eligible for JobKeeper:

  • He should be a non-bankrupt sole trader.
  • He should be a shareholder in a firm or a director of a company.
  • He should be a partner in a partnership.
  • He should be an adult beneficiary but not a trustee.

And you have to keep in mind that the individual who has been engaged in the business from March 1, 2020, and he should also be active in the fortnight for which the Jobkeeper payment is being claimed. There were some changes introduced in the JobKeeper on July 20, 2020. As per those changes those who are active in child care services can’t claim JobKeeper payments for business participants.

Here are some key points to remember about this scheme:

  • If you have several persons in your company who meet the criteria of JobKeeper, only one person from your business is eligible for this scheme.
  • In case you have nominated one person from your business for this scheme, even if he leaves your business, you can’t nominate someone else who is working for your business.
  • You can nominate someone as an eligible employee or an eligible business participant but not both.
  • Only an individual can be eligible for this scheme.

In this blog, we try to provide all the essential information about accounting and taxation. You can visit our official website for more information.

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.

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