Our Shoebox Bookkeepers have received extensive
training in the use of our Jobkeeper Kits. These kits allow our
bookkeepers to determine whether you are eligible using the BASIC TURNOVER TEST
or the ALTERNATIVE TURNOVER TEST. These tests are the most important
aspect of eligibility. If these are wrong, then you may be liable to pay
the ATO back up to 5 years into the future.
alternative tests apply in the following cases:
of a business;
or disposal of a business;
increases in turnover during a prior period;
or natural disasters;
turnover periods that are not cyclical;
there is sickness, injury or leave of a sole trader or a partner of a
to the Alternative Tests
the heart of the JobKeeper payment scheme is a requirement that, in order to be
eligible to participate, an entity must satisfy a decline in turnover test. The
Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the
Rules), which were registered on 9 April 2020, set out the "basic test” and
provided the Commissioner of Taxation with a power to determine alternative
tests. The alternative tests are set out in the Coronavirus Economic Response
Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020
(the Alternative Test Rules), which were registered on 23 April 2020.
the Alternative Tests?
the entity meets the requirements to apply an alternative test, the entity is
provided with an alternative period or amount that may be used to compare
against the projected GST turnover for the relevant "test period”. The table below provides a high-level summary of the Commissioner’s alternative
tests that may be used in the scenarios identified above.
when an Alternative Test is appropriate
Alternative Test Rules identify the following scenarios when the comparison
required under the basic test is not appropriate.
- Entity commenced business before 1 March 2020 and
after the comparison period in 2019
be used when a business began to actually turnover revenue prior to the
comparison period, i.e. Using March month, prior to 1st March 2019 OR using May
month, prior to 1st May 2019. This will be sliding as we progress through the
months of the scheme.
ACQUISITIONS AND DISPOSALS
acquired or disposed of part of their business and the acquisition or disposal
changed the entity's turnover
be used if a business acquired or sold an asset that changed the nature of
their turnover. Examples include, rent rolls, machinery and/or transport
vehicles, purchase of another business to incorporate into existing business.
RESTRUCTURE OF BUSINESS
- Entity restructured part or all of it's business
and the restructure changed the entity's turnover
be used if the business restructured internally. Examples include a business
with a sales, production and warehouse capabilities. The business may have put
the warehousing arm into a separate entity.
SUBSTANTIAL INCREASE IN TURNOVER
turnover has increased substantially under the 50% / 25% / 12.5% rule
the entity grew significantly by 50% over the last 12 months, or 25% over the
last 6 months, or 12.5% over the last 3 months then this rule can apply.
- Non-cyclical business has irregular turnover during a quarter over
the last 12 months
your turnover in your lowest quarter in the last 12 months is 50% or less of
your best quarter in the last 12 months, and your business is not cyclical in
nature. For example, entities with regular seasonal variance in their turnover
have an appropriate comparison period same time last year, so can use the basic
test. i.e. a ski resort would not be able to use the test.
SOLE TRADER OR PARTNERSHIP
- Impact where the sole trader or partner of small partnership is
effected by sickness, injury or leave
be used for a sole trader entity or a partnership that have NO employees. To be
used if the sole trader of one of the partners of the small partnerships could
not work and produce revenue for the entity for reasons or sickness, injury or
DROUGHT OR NATURAL DISASTERS
- Some or all of the business carried on in a declared drought or
other natural disaster zone
For business where the
Australian Government have declared them to be affected by a natural disaster
and have already been given.
the next steps?
application of the Alternative Test Rules is very fact specific and requires a
number of GST turnover calculations to be made for the various alternative
periods. Due to the breadth of the alternative tests, taxpayers will likely be
able to test using at least one of these alternative methods. Furthermore, in
some cases, it may be possible for an entity to be able to access multiple
tests (for example, where the business commenced, there was a restructure and
an acquisition during the 12-month period).
the 30 April deadline for access to the first two JobKeeper payments is drawing
near, taxpayers should start looking at these alternative tests now. Please
contact your Pitcher Partners representative for further information or for
assistance in applying these measures.
there are additional adjustments to each of the tests where the entity
qualified for the ATO’s Bushfires 2019-2020 lodgement and deferral program or
receive Drought Help concessions during the relevant period.