There are two issues that practitioners should be clear about in relation to JobKeeper payments. Both relate to the 12 March 2020 criteria for business owners seeking JobKeeper assistance through an eligible business participant.
1. Commissioner’s discretion is not automatic
The income tax return or BAS lodgment deadlines set out in section 11 of the JobKeeper rules state “on or before 12 March 2020 (or a later time allowed by the Commissioner)”.
The ATO has provided examples (QC 62190) of when the Commissioner would allow a later time, such as a taxpayer under an agent lodgment program. However just because an entity falls within one of the examples provided does not mean the entity is automatically allowed a later time. The Commissioner’s discretion must still be sought. The ATO has made this clear (QC 62190):
“If the business entity and the eligible business participant met all JobKeeper eligibility requirements, other than the requirements to hold an ABN and/or provide notice to the Commissioner of income or taxable sales by 12 March 2020, you should consider applying to the Commissioner to exercise his discretion to grant further time.
“You cannot enrol to receive a JobKeeper payment until you are notified that the Commissioner has granted the further time requested.“
Additionally the ATO has provided the process an entity should follow in seeking the Commissioners discretion.
“JobKeeper – application form for Commissioner’s discretion in respect of an eligible business participant (QC 62540).“
2. Tax period before 12 March 2020
For entities seeking to satisfy the 12 March 2020 criteria by way of a BAS lodgment, those entities should note that section 11 of the JobKeeper rules precisely requires that “the entity made a taxable supply in a tax period that applied to it that started on or after 1 July 2018 and ended before 12 March 2020.”
For entities with a monthly BAS cycle the “tax period ended before 12 March 2020” will be February 2020. However for entities with a quarterly BAS cycle this will be the quarter ended December 2019.
Therefore if a business that commenced in, say, November 2019 is on a quarterly BAS lodgment program, but did not make any supplies until January 2020, that entity does not and cannot meet the eligibility criteria in section 11(8).
This situation is explained in Practice Statement PS LA 2020/1, including an example of the exact situation described above.