JobKeeper - What's next?

The Coronavirus Economic Response Bill (JobKeeper) passed both houses of Parliament on the 8th of April 2020, and it has also been given royal assent.

The Bill has allowed Treasury to set out the details of how the JobKeeper package will work, and also allows the ATO to administer it. That said, the fact sheets are still being updated daily, and the ATO are still in the process of creating its own JobKeeper website: https://www.ato.gov.au/general/gen/JobKeeper-payment which has had an update today to include a massive amount of important information. The ATO have stated that you will be able to enrol in the JobKeeper Scheme from the 20th of April 2020 using an online form on their website. After you enrol you will be later asked to identify your specific eligible employees and you will then have 7 days to advise your employees that you have nominated them as an eligible employee. The employee must agree to be nominated by you and they must complete the ‘JobKeeper Employee Nomination Notice’. Section A is to be completed by the Employer and Section B through to D is to be completed by the employee. This is not to be sent to the ATO but a completed form must be kept on file.   

One of the most common questions I am asked is ‘How do I determine a fall in turnover?’

Well, the ATO have now announced that you only need to satisfy this requirement once – you don't need to retest turnover each month.

At the time you enrol in the JobKeeper payment scheme, you need to confirm that your business in a relevant period has had, or is likely to have, a:

- 30% fall in turnover (for an aggregated turnover of $1 billion or less)

- 50% fall in turnover (for an aggregated turnover of more than $1 billion), or

- 15% fall in turnover (for ACNC-registered charities other than universities and schools).

How to calculate a fall in turnover for the first fortnight starting 30 March 2020

To work out your fall in turnover, you can compare either:

- GST turnover for March 2020 with GST turnover for March 2019

- projected GST turnover for April 2020 with GST turnover for April 2019

- projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.

How you choose to project your fall in turnover is not dependent on whether you report a quarterly or monthly BAS, though you can do that if it is easier. The turnover calculation is based on GST turnover, but there are some modifications, including disregarding GST grouping (where two or more associated business entities operate as a single GST group). The ATO will provide more information soon about applying the turnover test.

If you work out that you qualify for the JobKeeper payments for the first fortnight because your turnover has declined by the relevant amount, you remain eligible and do not need to keep testing turnover in following months. However, you will have ongoing monthly reporting requirements. More information will be provided soon.

The Commissioner of Taxation also has the discretion to set out alternative tests that can establish your eligibility when turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year). They will provide more information soon about alternative tests.

Correctly calculating and keeping evidence about the projected turnover will be crucial. Failure to comply with the record keeping requirements will render the business ineligible and they will be caught through the integrity provisions. I recommend that you carefully monitor and keep records of any;

• Decreases in quotes

• Decreases in bookings

• Decreases in sales

• Decreases in the number of customers

• Any other circumstances that may cause a decrease in the business’s turnover

For more information and frequently asked questions, please see the fact sheet by clicking here.

If you have any problems, please do not hesitate to contact me on 03 9762 6652 or subscribe here to get updates as they are announced.