Monthly Archives: May 2020
As we all may now know, a small business can access JobKeeper reimbursements from when turnover fall by 30%. Treasury surprisingly proposed that turnover be defined as being GST turnover.
That’s when the confusion started!
All the big accounting firms and research houses were adamant from the start that a small business could assess a fall in turnover on either an accrual basis (when an invoice is raised) or cash basis (when money is received) where a small business reports GST on a cash basis.
The ATO appeared to agree with this. Then they reversed their position by saying that turnover had to be assessed on the basis of the GST registration. This meant cash for the majority of small businesses.
A cynic would say this was done to reduce the number of firms that could receive JobKeeper.
How would that be?
Well cash is a lagging indicator. A very convenient way to ignore reality – reality being that the true measure of a downturn and when it happens is when the value of invoices raised fall.
Thankfully reality has been recognised. Last Monday the ATO officially stated that a small business that reports income on an accruals basis (as in the accounting software and Tax Return reports income when an invoice is raised) could identify a fall of more than 30% in turnover on either a cash or accrual basis. Yes, you get to pick the best result.
We have since re-visited our clients’ positions.
Please contact us if you would like help assessing whether your turnover has fallen enough for you to know qualify. We have read the ATO’s companion paper and are across all other considerations. We welcome your call.
Today we have the distraction of ATO systems crashing and not being able to complete the JobKeeper enrolment process. That said, we are however pleased to report that some of our clients have today received the JobKeeper payments for the first two fortnights.
Being a reimbursement process, many businesses will be using that to fund the balance of the JobKeeper fortnight ending Sunday, particularly those that have casuals earning less than $1,500pf.
And whilst on the matter of Sunday, please ensure you have topped up employees’ pays where their gross is under $1,500. Our clients will know this given the educational program we have delivered. If we are not your accountant, then we suggest it is time you were.
Tax agents around the country currently can’t log into the Tax Agent Portal to attend to the next stage of JobKeeper reporting.
Once again ATO systems fail to handle the workload they created! Blind Freddie should have seen and PREPARED for all agents to pretty much be logged on at once. And who suffers – all those business owners waiting for the monetary lifeline!
It appears the ATO hasn’t appreciated in any way the rules, systems and requirements that they have put in place.
Take for example the enrolment process. Again even Blind Freddie could have foreseen that:-
Many would presume that registering their interest was actually enrolment.
Seven, yes only 7 days from Monday 20th to Sunday 26th April was never going to be enough time for everyone to enrol. And even then it took them 5 days to work out the process needed to be extended to 5 weeks.
It reminds me of the ATO’s 5 in 5 service when GST was introduced. They promised to reply to any question within 5 days. 5 weeks was quickly the norm; then followed in time by being lucky if ever got an response.
As it is their JobKeeper support is poor – to say the least. We have ATO staff simply hang up or refer us to a link (that didn’t answer the question) and then promptly hang up.
So we will just keep trying to log in and stay back as long as is necessary.
Why didn’t they just adopt the UK system which sounded much simpler and appears to have fewer anomalies?