Further to our article on 31 August 2020, the ATO have now reversed their position on the inclusion of JobKeeper income in the calculation of aggregated turnover. It has been confirmed that JobKeeper payments will not be included in calculating aggregated turnover.
This change in position has come about due to lobbying by various tax professional bodies, including a submission from RSM after an ATO officer provided initial guidance that JobKeeper income would be ordinary income derived in the ordinary course of carrying on a business.
The ATO has now confirmed that whilst JobKeeper payments are ordinary income, they are not derived in the ordinary course of carrying on a business and therefore not included in calculating aggregated turnover.
This will provide welcome relief to many businesses who rely on their turnover being below a certain threshold to gain access to a myriad of tax concessions, including but not limited to:
- $10m aggregated turnover threshold for Small Business Entity concessions
- $2m aggregated turnover threshold for Capital Gains Tax (CGT) Small Business Entity concessions
- $50m aggregated turnover threshold for Base Rate Entity concessions
- $20m aggregated turnover threshold for the refundable Research and Development tax incentive (non-refundable for entities over this threshold)
- $50m aggregated turnover threshold for instant asset write-off of assets less than $30,000 acquired between 1 July 2019 and 11 March 2020.
You can view the ATO’s updated guidance here.
If you have any concerns about how to account for JobKeeper payments or your eligibility for the relevant tax concessions, please contact your local RSM representative.