Following the release of the JobKeeper Payment Scheme, the government have subsequently tightened some eligibility within the Cashflow Boost system (which is effectively a delivery of PAYG withholding offsets/refunds). The rules currently state that:
You will not be eligible for cash flow boosts if you (or a representative) have entered into or carried out a scheme for the purpose of:
- becoming entitled to cash flow boosts when you would otherwise not be entitled, or
- increasing the amount of the cash flow boosts.
This includes restructuring your business or the way you usually pay your workers to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.
Effectively this means that owners – who have not paid or declared wages in the past – are not permitted to start declaring wages in the March 2020 quarter in order to gain access to this cashflow boost scheme. It also means that if you have consistently paid a certain level of wages in the past, you would be expected to continue declaring wages at a similar level unless there is a significant reason for your increased wage amount.
Industry bodies and the tax practitioners board have indicated that this will be enforced under a very literal interpretation unless further provisions are made specifically allowing owners wages to be started, when they haven’t been paid in the past.
The industry believes that this is an unfair application of the rules and is lobbying to have this interpretation changed. We will keep you updated on this, but it is important to note that any increased declaration of wages on the March BAS may be subject to a further audit or review. As always, if any wages at all are declared for the March BAS it is extremely important to ensure that the correct PAYG withholding is calculated and the correct superannuation payment made is made on time (must be received by the fund before 28 April).
If you are self employed within your own business, you may now instead be eligible for the JobKeeper payment (if you meet the criteria). Although part of the eligibility criteria relates to being a particular type of employee as at 1 March 2020 – there are other provisions within this legislation that allow for sole traders, trusts and partnerships to access the payment under most circumstances. Please refer to our article on the JobKeeper Payment Scheme to help determine your eligibility.