JobKeeper – Establishing whether the projected GST turnover of a business has fallen or is likely to fall

In determining whether the turnover of a business has fallen (or is likely to fall) by at least 30% (or 50% as the case may be), the business would generally need to show a decline in its projected GST turnover in the current period (i.e., either a month or quarter) relative to its current GST turnover in the corresponding period in the 2019 income year.

The concept of ‘projected GST turnover’ and ‘current GST turnover’ for these purposes have been modified to apply to the period (i.e., either a month or a quarter) rather than the month, with the GST grouping provisions to be disregarded as well.

Specifically, the modified ‘current GST turnover’ is determined at the end of the period and takes into account the total value of all supplies made by the entity during that period, excluding input taxed supplies, supplies that are not for consideration and supplies that are not made in connection with the enterprise that the entity carries on.

The modified ‘projected GST turnover’ is determined at a time during a particular period and takes into account the total value of all supplies made, or are likely to be made, by the entity during that period, excluding input taxed supplies, supplies that are not for consideration and supplies that are not made in connection with the enterprise that the entity carries on.

 

PRACTICAL TIP – The ATO’s discretion for JobKeeper eligibility

Where a business was not in operation a year earlier, or where the turnover of a business a year earlier was not representative of their usual or average turnover (e.g., because there was a large interim acquisition, they were newly established, or their turnover is typically highly variable), the Commissioner will have discretion to consider additional information that the business can provide to establish it has been significantly affected by the impact of the Coronavirus. Currently, the ATO has not released any information on what factors it will take into account when considering exercising this discretion.

The Commissioner also has the discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g., eligibility may be established as soon as a business has ceased or significantly curtails its operations). There will also be some tolerance where employers have, in good faith, estimated at least a 30% (or 50%, as the case may be) fall in turnover, but actually experience a slightly smaller fall.

 

 

 

 

Make sure to connect with us on social media.