Latest COVID-19 Govt Assistance for Businesses

Thanks @Simon Hampel , the qualify once is an interesting one, I wonder how many business can show a single, one off decline through one of the tests, enough to pass the test, then continue to make good money for the next 5 months and not get called out?

 

That would fall under the fraud investigation etc I would imagine.

Due to the ongoing GST reporting as stated by Simon above, this would be flagged as an anomaly perhaps.

 

1. As the company will have a equal or greater outgoing its not likely overall taxable

2. No. The measure is based on GST turnover for that reason. Even if the entity is not registered for GST.

3. No it is non-assessable, non-exempt income. It is ignored. It is also not GST turnover.

 

The employer is required to continually reassess employee eligibility. Employers can join or cease jobkeeper at any time subject to being eligible based on turnover in one of two ways as noted below. The measure is each fortnight but the declaration is required monthly.

You can read the explanatory material - appendix A

The decline in turnover test is a test required to be met at the commencement of application. If applied for by the end of April and the employer was eleigible for the conditions in March the fortnights backdate to 1st March. Once met the employer could have increased turnover and this does not exclude the employer. A new employer entering after April must only meet the test for that first fortnight and remains eligible for the shorter duration.

The decline in turnover test needs to be satisfied before an entity becomes eligible for the JobKeeper payment. Once this occurs there is no requirement to retest in later months. If an entity does not qualify for the month of April 2020 because its turnover has not been sufficiently affected, it can test in later months to determine if the test is met. This allows entities that only become affected part way through the six month period of operation of the JobKeeper scheme to continue to monitor for any decline in turnover until they qualify for the scheme in a later period.
The JobKeeper scheme aims to assist entities that have a significant decline in turnover due to the economic impacts of the Coronavirus. Accordingly, to properly target the JobKeeper payment to affected employers, section 8 of the Rules establishes a decline in turnover test that must be satisfied at the end of a fortnight for an employer to qualify. Once an entity satisfies this test it does not need to retest its turnover in later months.​

 

Simon, I have some sound tips for accounting software. All software packages will need to be modified.

Two acccounts should be created and clearly labelled as I describe:

1. Cashflow boost Income (Tax Free), No GST codes
2. Jobkeeper Income, No GST codes
If the software has an "other income" section that is probably best used.

Its important to have TWO accounts so that the tax free nature of the cashflow boost is kept distinct from jobkeeeper. It could be missed and may be time costly if the accountant has to ask and fix it. And very important that the net BAS is not allocated as a BAS payment but is split into the relevant portions

eg Fast Pty Ltd lodges its March BAS with net GST of $1100 and PAYG withholding of $14,000. A total of $15,100 is payable but the ATO credits $14K cashfow boost so the company only pays $1100. Its very important that there is an allocation of the actual BAS amount/s. ....A DEBIT to PAYG withholding payable and CREDIT to cashflow boost income each for $14,000 should also be entered even if it is a journal.

 

Any idea how to do that in Xero? Scratching my head all morning here, I can add new accounts and edit how they behave for GST but I can't for the life of me find a way to set the cash-boost one as a tax exempt income. It always shows up additional profit in the the P&L report.

 

Not sure why this would be a fraud investigation - the rules seem to clearly state if you qualify once then you don't need to retest for the rest of the six month period. My business is be borderline <30% down in April, definitely won't be in May and then extremely likely to be <30% down in June - there doesn't seem to be any rule that you only get jobkeeper for the months you are down in revenue.

If people are fiddling the books to make it appear they are <30% down in one of the months, then that's a different story.

Regards,

Jason

 

Further to my above post re. accounting for it in Xero, it seems you can't set a tax exempt income item in Xero? If anyone else has the same issue, then what have done for my forecasting is create a custom P&L report that has a new grouping for "Tax exempt income" and then exclude that group from the formula at the end, just have to remember to always run your custom P&L and not the standard one then.

 

It will add to accounting profit. It won't add to taxable profit.

 

As Mike says, Accounting profit remains unaffected. In the tax return the company would adjust accounting profit to exclude the exempt income. This is why the wording Tax Exempt in the account name is so important as it could otherwise be missed. You cannot "not account" for receipt of the exempt income.

 

Sort of....The 31 May extension comes with a trigger date of 8th May. Its very chicken or egg so employers do need to be organised - Now. eg They need to pay to be eliible but need to know if they must pay and also have all the employees onboard. They may end up paying staff by 8th May (for 30March to 26 April) and being unentitled.

Extension of time to enrol for the JobKeeper scheme
The Commissioner has extended the time to enrol for the initial JobKeeper periods, from 30 April 2020 until 31 May 2020.

If you enrol by 31 May you will still be able to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight.

For the first two fortnights (30 March – 12 April, 13 April – 26 April), we will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.

You can enrol and claim for JobKeeper earlier if you choose. For example, you can enrol by the end of April to claim JobKeeper payments for the two fortnights in April.​

 

The jobkeeper is seemingly simple but far more complicated than many realise. Common misunderstandings largely due to media announcements and poor journalism describing it as an aemployee benefit.

• Sole traders etc cant get it. Yes they can. Either for their employees and / or themself
• 30% reduction test and its timing
• Eligible business participants vs employees. This is how many can get access but only ONE working person, partner, trust beneficiary and they cant also be an employee registered for the scheme. And cant be paid by any other employer.
• March start date...Start date is the f/night commencing 30 March. Not 1 March
• Employees must be paid rule
• Casuals. Must have worked for the employer 12mths+
• All In Rule. ATO has some new guidance on this coming. If one employee says no this doesnt make the employer ineligible. All in means the employer cant cherry pick some staff and not others
• The employee may not get all $1500. the employer may deduct tax. NO FEES OR SHARE ALLOWED... If a employer asks this can be reported to the ATO.

and here is a fresh one just released for those who defer their applications based on paying employees late etc

As a warning, employers must be aware that, despite the fact they can now pay their employees as late as 8 May 2020 and still be eligible for JobKeeper Payments for fortnights 1 and 2, they are still required to pay their employees a further $1,500 by 10 May 2020 in relation JobKeeper fortnight 3 (which ends on the same date). At the current time, no extension to this date has been announced, and it would be unwise for employers to anticipate that there will be one. [NTAA]

 

Think some confusion by people.

1. Cashflow Boost is Non Assessable Non Exempt Income
2. Jobkeeper is assessable income.

 

Hi guys, I am self-employed and my accountant confirmed I am eligible for job-keeper allowance. However, he said it has a monthly reporting requirement so will charge me $110 + GST per month for it. Does this seem fair? Is the amount fair?

 

Sounds fair. Otherwise you can register through mygov and do the reporting yourself.