Jobkeeper Payment for people flying Solo

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Jobkeeper payments for People Flying Solo

Small businesses such as sole trader, partner of a partnership, Pty Ltd with 1 director or 1 beneficiary of a trading trust can access Jobkeeper payment.

Under jobkeeper payment arrangement, ATO has clarified business owners operating through following structures and associated entities are eligible to apply for $1,500 per fortnight.

Entity typeEligible Entity
Sole TraderIndividual
PartnershipA partner
Trading TrustAn adult beneficiary
CompanyShareholder or director

Eligible business participant has been introduced in order to ensure sole traders, partner in a partnership, sole directors of Pty Ltd and main beneficiary of a trust who work for themselves and donot pay themselves salary and wage are eligible to receive jobkeeper payment. Only 1 person per entity is eligible to get this payment per structure. Person nominated by this structure cannot be nominated by any other structure.

An entity is not entitled to a jobkeeper payment under this section unless the entity had an ABN on 12 March 2020 (or a later time allowed by the Commissioner), and the following requirement in A or B is satisfied.

This requirement is satisfied if:

(a) an amount was included in the entity’s assessable income for the 2018‑19 income year in relation to it carrying on a business; and

(b) the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the amount should be so included.

So in nutshell, if you included taxable income in FY 19 tax return, you can be eligible. 

OR

This requirement is satisfied if:

(a)  the entity made a taxable supply in a tax period that applied to it that:

(i) started on or after 1 July 2018; and

(ii) ended before 12 March 2020; and

(b) the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the entity had made the taxable supply.

Requirement can easily be confirmed if you are registered for GST and have been lodging BAS.

Other eligibility requirements include:

30% or more drop in revenue either:

  • Year on year or
  • Forecast which will be subject to validation against actuals. An example demonstrated below
On 15th April an entity (sole trader/partnership/ pty ltd or trust makes an estimate of GST turnover
MonthFY 19 ActualFY 20 ForecastFY 20 Actual
April25,00023,00024,000
May35,00022,00023,000
June32,00017,00019,000
Quarter Total92,00062,00066,000
  33%28%

Option 1

Compare GST turnover for April; forecast and actual do not meet the criteria

Option 2

Compare GST turnover for June 2020 quarter. Forecast reflect drop of 30% or more though actual does not.

Note: Both monthly and quarterly options are available. If actuals for any month are available no further work is required. However, if actuals don’t show true picture, you can use forecast.

ATO will be considerate re Actuals V Forecast if drop is reasonably close to 30% drop.

Work with your tax agent to establish forecast, they will have a copy of calculations which can be used later on to explain variances. ATO is more likely to accept a case with higher level of substantiation in place. ATO will be monitoring this space closely to avoid any fraudulent activity. Hence, it’s better to be safe than sorry.

Steps to Register

For now you can register your interest using following link

https://www.ato.gov.au/Job-keeper-payment/

Subsequent steps:

On 20th April 2020, ATO has issued forms for businesses to register. 

https://www.ato.gov.au/assets/0/104/300/362/5f4639ad-8475-4d66-a4f3-4ff0ef2d79f7.pdf

Once, the above form is filled, give it to your accountant for records purposes or save it. 

Please note: 

1).This form is not for sole traders. If you are a sole trader you need to use ATO Online Services or the Business Portal or registered tax or BAS agent can do this on  your behalf in Online Services for Agents. If you cannot nominate electronically you can call 13 28 66.

2). There is a glitch in the apply online form for Business Owners. ATO is aware of and is working on solution for businesses with no employees. Applications with ONLY eligible business persons has to wait until this glitch is fixed.

For more information and further queries, please contact us on M: 0432 120 120

Note: ATO and treasury are updating this information on daily basis. Please check with your advisors to ensure accuracy before relying on this information.

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