ATO Updates Previous Guidance on JobKeeper Calculations Relating to Cash or Accruals (Invoice) Based calculations

The ATO previously stated that you can calculate your JobKeeper turnover on either a cash basis or accruals basis, as long as this basis was consistent between comparison periods.

The ATO are still allowing this, but have also said ”As a practical matter, we expect that you will use the GST accounting method that you normally use”.

The ATO have also said that if you account for GST on an accruals basis, but seek to calculate on a cash basis (or vice versa), they may seek to understand your circumstances to ensure that the calculation achieves an appropriate reflection of your turnover.  

One of the key ATO intentions is to stop businesses deferring sales invoices so that turnover is reduced for April and the business becomes eligible for JobKeeper payments.

If you have calculated JobKeeper turnover on a basis different to how you report GST, it’s advised to document why you have done this and why it is reasonable to use this basis of calculation.

If you are unsure whether you are eligible for JobKeeper, double-check revenue and ensure you are clear about the comparison periods

For qualification from the start of the scheme, the comparison periods are any of March 2020 with March 2019, April 2020 with April 2019 or forecast revenue for April to June 2020 with April to June 2019.

You do not need to add up March and April to form one period.

If your business started after March 2019, there are separate rules that need to be applied. Please contact me if you want to discuss.

To qualify and to receive JobKeeper payments from a later time, the turnover month can also be May, June, July, August or September 2020. However, you must still enrol for JobKeeper by 31 May and base 2020 turnover for the revenue comparison for any period after May on forecasts. If applying for a later time, you will only receive payments that end on or after your turnover test period starts.

Ensure you calculate revenue with reference to either what has been received in the bank account (cash basis) or what has been invoiced (accruals basis) and ensure you apply the same basis to both 2020 and 2019 comparison periods. You may need to edit your accounting reports to ensure revenue is shown on a ‘cash’ basis.

Timing of JobKeeper Receipts from ATO and JobKeeper April Payments to Employees due by 8 May 2020

If you enrolled for JobKeeper by 30th April, funds should be received from the ATO this week, in time to pay staff by 8th May.

Employers have until 8th May to ensure all eligible employees have been paid $1,500 (before tax) for each of the two April fortnights.

If employees are not paid by 8 May, employers will not be able to claim JobKeeper for the first two fortnights

JobKeeper enrolment date to receive April JobKeeper Payments is 31 May but April payments to employees are still due by 8 May

if you are delaying enrolment until up to 31 May but will receive JobKeeper payments for April, you will still need to pay employees Jobkeeper amounts for April by 8 May.

How to adjust April payroll for JobKeeper if you have paid staff on JobKeeper less than $1,500 per fortnight

You will need to bring payments up to $1,500 per fortnight by paying the difference between the original pay and $1,500 (note that tax has to be taken out). This must be done by 8th May.

If you have registered for single touch payroll, file the amended payrun with the ATO. The amendment should have the details of the payment to make up the difference, rather than the full $1500, as the ATO will already have details of the initial payment (assuming it’s already been filed with the ATO).

If you’re using xero, you should process an unscheduled pay run.

What to do with JobKeeper receipts if you are a sole trader, company director or shareholder, trust beneficiary or partner (‘eligible business participant’)

If you are a sole trader, trust beneficiary or partner, you can spend the JobKeeper amounts on anything you like, including non-business expenses.  You must account for any withdrawals for personal spending similarly to other withdrawals (eg. drawings).

If you are a company director or shareholder (as opposed to a trust beneficiary), taking JobKeeper funds out of the company is subject to the normal rules and these transactions need to be accounted for as a wage or dividend.

Regardless of how you spend Jobkeeper amounts or your business structure, the receipts will be included in your business’s revenue and as a result, tax may be payable depending on your overall profit for the full financial year.

Can employees receiving JobKeeper work elsewhere and still receive JobKeeper?

Yes. The JobKeeper Payment is not income-tested, so employees may earn additional income without JobKeeper payments being affected as long as they are eligible and maintain their employment (including being stood down) with their JobKeeper-eligible employer.

However, employees can only receive the JobKeeper Payment from one employer, the primary employer, and only receive the JobKeeper Payment if they are a permanent employee of the primary employer, or if a casual employee, not a permanent employee of any other employer. 

Can you reassign employees on JobKeeper to other roles in your business

This is an area that you may need to be careful of following a newspaper report from an employment lawyer, who stated that if you reallocate a staff member to a role that is not part of their ordinary role, the staff member may have the possibility of refusing to do this work and it may be referred to arbitration. The arbitration process may be lengthy and thus invalidate the request to do the alternative work. If you have any queries as about this, you should speak to an employment lawyer.

Early release of superannuation

These rules allow individuals financially affected by coronavirus to assess up to $10,000 of their superannuation for both this financial year and next financial year.

The amount that you withdraw is tax-free and can be spent on anything you choose.

To be eligible you must satisfy one of the following requirements about your employment status;

  1. at the time you apply you are unemployed or eligible to receive jobseeker payments.
  2. On or after 1 January 2020 you were either made redundant, working hours were reduced by 20% or more or, if you are a sole trader, your business was suspended or turnover was reduced by 20% or more.

You need to apply using your mygov account and lodge a declaration online.  The ATO will assess your application and issue a determination. You then have to provide this determination to the SMSF trustee who will then make the payment.

You are restricted to a single application each financial year, meaning you can only apply to one fund if you have a self-managed super fund and an industry fund or multiple industry funds.

You are able to decide how much to receive up to $10,000 and which fund to receive the payment from.

The application for the next financial year must be made by 24 September 2020.

If you make a false and misleading statement to obtain the early release of super subject there will be significant penalties and the super that you have withdrawn will be included in your assessable income.


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