JobKeeper 2.0 update - Alternative tests confirmed
27 September 2020
As outlined in our eAlert last week, the ATO has released information on the extension of JobKeeper and the changes that will come into effect today (28 September 2020). Please refer to our original eAlert here for further information, including key dates.
On the 22 September 2020, Treasurer Josh Frydenberg released the legislative instrument which outlines the alternative tests for decline in turnover for business entities where there is no appropriate relevant comparison period.
The alternative tests can be used to determine whether an entity has satisfied the actual decline in turnover test for the September 2020 quarter or the December 2020 quarter.
If an entity satisfies the basic test, it does not need to satisfy an alternative test. Also, you only need to satisfy one of the alternative tests listed below even if more than one could apply.
Please be aware that while the alternative decline in turnover tests for JobKeeper 2.0 remain relatively the same, there have been some minor changes made.
Circumstances where an alternative test applies:
- The entity commenced business after the relevant comparison period but not on or after 1 March 2020
- The entity acquired or disposed of part of its business from the start of the relevant comparison period but before the applicable turnover test period (for multiple acquisitions or disposals the requirement to use the period after the last transaction has been removed)
- The entity restructured the whole or part of the entity’s business from the start of the relevant comparison period but before the applicable turnover test (for multiple restructures the requirement to use the period after the last transaction has been removed)
- The entity’s turnover substantially increased by:
- 50% or more in the 12 months immediately before the applicable turnover test period or before 1 March 2020, or
- 25% or more in the 6 months immediately before the applicable turnover test period or before 1 March 2020, or
- 12.5% or more in the 3 months immediately before the applicable turnover test period or before 1 March 2020.
- The entity was affected by drought or other declared natural disaster during the relevant comparison period in 2019
- The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period or 1 March 2020, excluding entities that have cyclical or regular seasonal variance in their turnover, or
- The entity is a sole trader or small partnership with no employees where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.
It is important to note that the actual decline in turnover tests only use quarters, the original decline in turnover tests used months or quarters.
For the purposes of the September 2020 actual turnover test, the start of relevant comparison period is 1 July 2019 and the start of the applicable turnover test period is 1 July 2020.
More information on how to apply the alternative tests can be found on the ATO website here or contact your local Boyce Accountant.