[vc_row][vc_column][vc_column_text]Alternative Tests for determining Decline in Turnover where no appropriate relevant comparison period.

On the 23rd April the Government provided details as to the ‘Alternative Tests’ certain classes of entities may adopt when determining their decline in turnover for the JobKeeper provisions.

Broadly these Alternative Tests can only be used by entities for where there is not an appropriate relevant comparison period for an entity.

The Alternative Tests applies to classes of entities that fall within any of the following categories:[/vc_column_text][vc_column_text]

• The entity commenced business after the relevant comparison period (e.g. April 2019)
• The entity acquired or disposed of part of the business after the relevant comparison period
• The entity undertook a restructure after the relevant comparison period
• The entity’s turnover substantially increased by:

• • 50% or more in the 12 months immediately before the turnover test period; or
  • 25% or more in the 6 months immediately before the  turnover test period, or
  • 12.5% or more in the 3 months immediately before the turnover test period.

• The entity was affected by drought or other declared natural disaster during the relevant comparison period
• The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or
• The entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.

[/vc_column_text][vc_column_text]Each class has its own modified GST turnover tests to determine whether there is a 30% reduction in GST Turnover.

The tests generally adopt a shorter period (e.g. the 3 months preceding as the comparable period).

The Legislative Instrument is a hard read and we suggest if you believe you meet any of the criteria that you seek assistance.

Further changes to these classes of entities have already been announced (e.g. service entities) and we await further details.

As usual our link to the relevant Legislation is below:[/vc_column_text][mk_button dimension=”flat” size=”medium” url=”https://www.legislation.gov.au/Details/F2020L00461/Download” target=”_blank” margin_top=”10″ margin_bottom=”40″ btn_hover_bg=”#c4b097″]Click here[/mk_button][mk_padding_divider size=”10″][vc_column_text]Cash vs Accruals

As outlined in our last update the ATO recently issued a statement advising entities that they may adopt either a cash or accruals method for calculating their decline in GST turnover under the JobKeeper provisions, provided the same method is used for both comparison periods. Since then, the ATO has revised its statement to adopt a more cautionary approach to this concession as follows:[/vc_column_text][mk_blockquote font_family=”none”]If you normally account for GST on an accruals basis, but seek to calculate on a cash basis (or vice versa), we may seek to understand your circumstances to ensure that the calculation achieves an appropriate reflection of your turnover.[/mk_blockquote][mk_padding_divider size=”5″][vc_column_text]Caution should be taken if you are choosing to adopt a different method to ensure it is appropriate to your circumstances and is properly documented.

Please do not hesitate to contact the Trove team if guidance is needed on any of the above.[/vc_column_text][/vc_column][/vc_row]