ATO Issues Alternative Tests for JobKeeper Eligibility 24.04.2020

The Commissioner has released their guidelines for the alternative tests for fall in turnover for classes of entities where there is not an appropriate relevant comparison period.

Circumstances where an alternative test applies:

1. The business commenced before 1/3/2020 but after relevant comparison period
2. There was a business acquisition or disposal that changed the entity’s turnover during (the business is not the same business in that period as it is now)
3. There was a business restructure that changed the entity’s turnover
4. The business had a substantial increase in turnover
5. The business affected by drought or other declared natural disaster
6. Business has an irregular variance in turnover
7. The business is a sole trader/small partnership with sickness, injury or leave impacted the ability the turnover

For the more common scenarios that may affect you:

For scenario 1- new business

1^st Alternative Test

• If the comparison period is a calendar month = use the average monthly current GST turnover
• If the comparison period is a quarter = multiply the average monthly current GST turnover by 3
• Where:
  • The average monthly current GST turnover = if before 1/2/2020, each whole month after entity commenced and before 1/3/2020 added together divided by number of whole months
  • The average monthly current GST turnover = if after 1/2/2020, then turnover divided by no. of days times by 29

2^nd Alternative Test

• If the comparison period is a calendar month = divide 3 months current GST turnover by 3
• If the comparison period is a quarter = use the 3 months’ current GST turnover
• Where:
  • 3 months’ current GST turnover = total current GST turnover in the 3 months immediately before 1/3/2020 (i.e. 1/12/2019 – 29/2/2020)

For scenario 4 – business had substantial increase in turnover

If the entity had an increase in turnover of:

1. ≥50% in the 12 months immediately before the applicable turnover test period
2. ≥25% in the 6 months immediately before the applicable turnover test period
3. ≥12.5% in the 3 months immediately before the applicable turnover test period

Alternative Test

• If the comparison period is calendar month = divide 3 months’ current GST turnover by 3
• If the comparison period is a quarter = use 3 months’ current GST turnover
• Where:
  • 3 months’ current GST turnover = current GST turnover in 3 months immediately before turnover test period

There are also detailed and different Alternative Tests for the other scenarios identified by the ATO above, that we can assist you in manoeuvring through should you fall within those circumstances.

If you fall into more than one of the classes of entities covered by the alternative test, you can choose which alternative decline in turnover test to apply. You only need to satisfy one of the tests (it does not matter if you do not satisfy one of the other tests that applies to you).

More information can be found here.

Should you have any questions or need any help ensuring you receive all available assistance, please reach out to our team and we will endeavour to do our best to assist.

Stay Safe.

The Team at Rose Partners