The ATO has now advised on its approach for those seeking eligibility for the cash-flow boost measure and have not lodged a tax return or activity statement before 12 March, but the equivalent JobKeeper guidance has yet to be released.
Tax Office updates 12 March lodgement condition
A key eligibility criteria in the cash-flow boost measure requires entities to have lodged on or before 12 March 2020 their 2018–19 tax return or an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020.
The ATO has now taken into account the fact that tax agents and their clients may be covered under lodgement deferrals and have sought to reassure that they will not be disadvantaged by being rendered ineligible.
Instead, business can now provide a list of additional supporting documents to confirm their eligibility for the cash-flow boost or wait for the cash-flow boost to be credited when the first return is lodged.
Hieu uses a tax agent to prepare his business income tax and annual GST returns. He did not lodge his 2018–19 tax return or annual GST return by 12 March 2020 because his due date for these lodgements is 15 May 2020.
Hieu remains eligible to receive the cash-flow boost as long as he lodges his 2018–19 tax return or 2018–19 annual GST return before his due date.
If Hieu lodges his March 2020 activity statement before either of the 2018–19 returns are lodged, the cash-flow boost will be credited when the first return is lodged.
Alternatively, Hieu can provide us with supporting documents that assist us to determine that he is eligible.
Likewise, sole traders, partnerships, trusts or companies looking to qualify for the JobKeeper payment under the business participation entitlement will also need to satisfy the condition of lodging their 2018–19 tax return, or an activity statement or GST return, on or before 12 March 2020.
Under the JobKeeper rules issued by Treasurer Josh Frydenberg, the ATO will have the discretion to provide for a later time after 12 March under certain circumstances, but it has yet to provide definitive guidance.
It remains to be seen if the ATO will adopt the same approach as it has with the cash-flow boost measure.
TaxBanter senior tax trainer Robyn Jacobson said it was important employers understood that the 12 March lodgement condition was only applicable to sole traders and other entities applying under the business participation entitlement.
“That’s an important distinction because I can see people getting really caught up in knots about satisfying those rules and they may not need to if they’re an employer with paid employees, as opposed to those who are applying on the basis of business participation,” Ms Jacobson told Accountants Daily.
View the ATO’s guidance on the impact of lodgement deferrals for the cash-flow boost here.