Australian Taxation Office (ATO) | 16 October 2020
Are you a sole trader navigating the JobKeeper payments, the recent extension and changes? As a sole trader, you may be eligible for the JobKeeper Payment if your business has experienced a decline in turnover according to the eligibility criteria.
As has been widely reported, the JobKeeper Payment has been extended until 28 March 2021. The JobKeeper extension will continue to support businesses and not-for-profits, including sole traders, that are impacted by coronavirus (COVID-19).
Key changes include:
• a need to demonstrate a decline in actual GST turnover relative to a comparable period
• changes to JobKeeper payment rates for employees based on their hours worked during their reference period.
Sole traders enrolled in the program before 28 September 2020 need to pay themselves $1,500 per fortnight (before tax) up to and including JobKeeper Fortnight 13, which ended on 27 September 2020.
After this, there are two tiers of payment for eligible employees and sole traders based on hours worked. From 28 September to 3 January 2021, these are $1200 for tier 1 and $750 for tier 2 before tax. Remember, you need to nominate the rate you are claiming for.
You have until 31 October 2020 to meet the wage condition for fortnights ending in October by paying yourself the correct amount.
If you are currently enrolled and would like to continue to claim JobKeeper payments in the first extension, you’ll need to check your continuing eligibility from 1 October 2020. Once confirmed, you will need to submit this information to the ATO online.
A further change will be made to the tiered rates from 4 January 2021 until the program ends on 28 March 2021.
Eligible businesses and not-for-profits, including sole traders, can still enrol at any time until the program closes.
• Eligibility can now be assessed as of 1 March 2020 or 1 July 2020.
For more information on the extension and these changes, visit www.ato.gov.au/jobkeeperextension
There are other ways the ATO can support you and help your business through this difficult period. For example, the ATO may be able to:
• help you with JobKeeper and Cash Flow Boost payments
• help you understand the increased extended instant asset write-off
• provide lodgment deferrals for upcoming lodgment dates
• offer deferrals for payments that may be due
• develop flexible payment plans
• change your GST reporting cycle or vary PAYG instalment amounts
• remit (reduce or cancel) interest charges
You still need to lodge your activity statements and tax returns on time, even if you can’t pay by the due date. This will show the ATO that you’re aware of your obligations and doing your best to meet them.
The ATO has been making it easier for small businesses to negotiate and enter into payment plans if you need them. If you’re trying to do the right thing, they’ll try to help you where possible. For more information on what support is available, visit Support for businesses and employers.
You can also speak with the ATO via their Emergency Support Infoline on 1800 806 218, or ask someone to speak with the ATO on your behalf such as your trusted tax professional or advisor.
It has been a difficult year, and your business may have made a tax loss. If your business’s expenses have been greater than your income, you may be able to claim a loss. If you’re a sole trader, and depending on whether you meet at least one of the non-commercial losses requirements, you may be able to either:
– offset your business losses against other types of assessable income for the same income year
– defer the loss or carry it forward and offset it when you next make a profit.
For more information, visit ato.gov.au/businesslosses.
Remember to keep records. You can use the myDeductions tool on the ATO app to keep records of your income and deductions.
The ATO’s small business tax time toolkit also has practical information and fact sheets to help small businesses on a range of topics, including if you’ve had to pause or permanently close your business due to COVID-19. Find out more at ato.gov.au/SBtaxtimetoolkit.