JobKeeper – Turnover Test

Enrolment for JobKeeper opens today….. over the weekend the ATO has released the inner workings of the Turnover Test, enabling employers to be eligible. Key points below:

  • For qualification from the start of the scheme, the turnover month used can be either March 2020 or April 2020.
  • To qualify at a later time, the turnover month can also be May, June, July, August or September 2020. In other words, you will only be eligible for JobKeeper payments for JobKeeper fortnights that end on or after your turnover test period starts.
  • If turnover for a quarter is being used (as opposed to monthly), it can be the quarter:
    • 1 April 2020 to 30 June 2020
    • 1 July 2020 to 30 September 2020, but only if first seeking to qualify for fortnights ending in July 2020 or later.
  • The relevant comparison period must be the same period in 2019 that corresponds to the turnover test period. Eg April 2020 v April 2019
  • The Turnover Test excludes the following:
    • GST you included in sales to your customers (if any)
    • Sales that are input taxed sales (e.g. bank interest, sale of shares, residential rental income)
    • Sales not connected with an enterprise that you carry on (e.g. sale of private car)
    • Sales that are not made for payment (unless a taxable supply to an associate)
    • Payments for no supply (e.g. JobKeeper payments)
    • Gifts and donations (except for deductible gift recipients and ACNC-registered charities)
    • Sales not connected with Australia, for example:
      • Sales of services made through a business you carry on outside Australia
      • Sales of goods purchased and sold from a place outside Australia
      • Sale of real property situated outside Australia
  • The accruals basis (date of invoices) of accounting may be used to calculate both the current GST turnover and projected GST turnover as both calculations require you to include sales that you have made or are likely to make without any reference to when you are paid.
  • If you prepare your activity statements on a cash basis, the ATO will allow you to calculate both the current and projected GST turnovers on a cash basis. The basis used must be the same for calculating your projected and current GST turnover.
  • If the shortfall percentage is greater than or equal to the 30%, you satisfy the basic fall in turnover test.
  • The reasons for a fall or expected fall in turnover are not prescribed and are not limited only to the direct impacts of the coronavirus.

Lastly, the ATO may determine an alternative test for fall in turnover for a class of entities where there is not an appropriate relevant comparison period. This can cover start-ups or businesses impacted by natural disaster for example. The ATO is set to release more information on this in the coming days.

Please contact us if you wish to discuss the specifics on how this applies to you.