Dear Clients and Associates,
Starting on the 20th April 2020 businesses and Sole Traders have been able to start applying for JobKeeper providing they were able to demonstrate a drop in turnover of more than 30% year on year. We have been receiving a lot of questions about eligibility, the test and registering and have answered some of the more common questions below.
To determine your eligibility please flollow the link below and complete the self-assessment checklist. Self Assessment Checklist Link
What tests are available to show a drop in turnover?
The tests have now been clarified and currently you can either:
Compare April - June 2020 to The tests have now been clarified and currently you can either:
• Compare Apr - June 2020 to Apr - June 2019
• Compare March 2020 to March 2019
• Compare April 2020 to April 2019, and onwards month-by-month to September
• If you are GST registered on a Cash basis you can use either Cash (recorded when paid) or Accrual (recorded when invoiced) methods for these tests.
• If you are GST registered on Accrual you can use only Accrual
• If you are not GST registered, you can only use Accrual
If you are not eligible in April, you can continue testing in May onwards and you may be eligible to apply in future months.
My income did not drop year-on-year due to growth but has steeply declined in the last 3-6 months. Am I eligible?
At present no, but the ATO are in the process of setting up an 'Alternative Test' where we will be able to request the ATO review a different comparison versus what is currently on offer.
We will update you once we have more information, and these new tests will be approved via the ATO's discretion.
I did not lodge my 2019 tax and/or are not GST registered. Can I apply?
Currently there is a requirement that to apply for JobKeeper you either need to have had your 2019 tax return lodged by the 12th March 2020 and/or have GST lodgements made since 01/07/2018 onwards to be eligible. A number of sole traders and other businesses had not lodged their returns yet as they are not due for most until the 15th May 2020.
The ATO are currently working on setting up a system for extensions on this lodgement requirement and we will update you when we know more.
How do Sole Traders apply?
Sole Traders and can apply through their online MyGov account linked to the ATO. It is also available to be setup through the Business Portal or the Tax Agent Portal if you are unable to get either of the previous two methods working. You will need to keep records of how you satisfy the above tests so you can demonstrate your method if the ATO ever request more details.
When applying for JobKeeper make sure you choose the specific option to receive payments as a Sole Trader and enter that you have 0 eligible employees (unless you are employing and have run the relevant tests).
You must also not be getting paid any wages from an employee on anything other than a casual basis. The ATO may reject your application or clawback funds at a later date if you receive JobKeeper and a Part-Time of Full-Time wage in an overlapping period.
Please let us know if you need a Notice of Assessment or any details to link your MyGov to the ATO.
I am on JobSeeker but want to apply for JobKeeper. What should I do?
You can only receive one of the above payments at a time so once you are successfully registered for JobKeeper you need to inform Centrelink what payments have been received and for what period. You may need to use some of your initial JobKeeper payment to repay overlapping JobSeeker amounts received.
If I work in my Company/Trust/Partnership and do not take a wage how to I apply?
Currently the ATO allow one member of a company/trust/partnership to be nominated as an Owner working in the business. They are able to receive the JobKeeper payment but the payment does not need to be paid out to them as a wage and can be used in the business to pay bills and keep things running. The payment does count as income and can be used down the track to issue the standard dividend or distributions. The owner must not be receiving JobKeeper from any other source or JobSeeker.
If you are a Shareholder, or Beneficiary of a company/trust and you also satisfy the employee test you can nominate as either as an employee or business owner. If you and other business owners are already being paid as employees and nominate to be paid as employees the restriction of one owner per business will not apply to these payments.
The application is done by the Entity and not the Owner, and must be done through the Business Portal. This requires a MyGovID (app on your phone) which is linked to the Business via Relationship Authorisation Manager. If this is unavailable we are able to assist with the enrolment process through the Tax Agent Portal.
Additional Links https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/ - JobKeeper details https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/Applying-the-turnover-test/?anchor=Basictest#Basictest - Basic Test https://www.mygovid.gov.au/how-do-i-get-set-up - Set up MyGovID https://info.authorisationmanager.gov.au/get-started - Linking your Business https://bp.ato.gov.au/ - Business Portal
If you have any questions or require further information, then please do not hesitate to contact Connect Advisors on (03) 9863 9779.
Connect Advisors Accountants
Level 11, 350 Collins Street Melbourne VIC 3000 GPO Box 430 Melbourne VIC 3001