Eligibility to the cash-flow boost measure requires entities to have held an ABN on 12 March and 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.
Likewise, sole trader and entities such as partnerships, trusts or companies looking to enrol for the JobKeeper payment under an eligible business participant will be required to satisfy the same eligibility requirements.
As such, the Tax Office has now released Practice Statement Law Administration (PS LA) 2020/1, providing guidance to ATO staff on the commissioner’s discretion to allow further time in limited circumstances.
The discretion will hinge on the policy intent of the law, with the ATO noting that the eligibility requirements were included to “prevent new entities from being established, or inactive entities being revived, solely to obtain the benefits provided under either measure”.
The practice statement notes that the commissioner will likely allow further time to provide notice that business income or supplies were made where a business had a pre-existing lodgement deferral in place, such as through the tax agent lodgement program or the deferrals for taxpayers affected by the recent bushfires.
It will also likely apply the discretion where the entity was a new business established from 1 July 2019 that is not registered or required to be registered for GST, but have made supplies during a period ending between the 1 July 2019 and 12 March 2020 period.
Exceptional and unforeseen circumstances, such as the loss of a significant amount of records due to the recent bushfires, will also likely prompt further time from the ATO.
“When having regard to all the relevant facts and circumstances of an entity’s situation, the ATO may need to contact the entity and obtain more information before we can determine whether the discretion should be exercised,” the practice statement said.
“Additional supporting documentation will depend on the entity’s circumstances.”
You can view PS LA 2020/1 here.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.