When the JobKeeper subsidy was first announced, it stated that the payments received by an employer would be included in the employer’s assessable income as wage subsidies, but not subject to GST. Therefore, it is classed as ‘ordinary income’.
Ordinary proceeds from business activities that are carried on regularly and in an organised, systematic way, on a large scale or with view to profit, are classed as ordinary income.
Last week, the Tax Practitioners Stewardship Group pressed the ATO for clarification on the Jobkeeper payments. If they are classed as ‘ordinary income’, would it be included in aggregated turnover? This could result in the loss of a range of small business concessions based on aggregated turnover thresholds.
Small business concessions include:
- Small business income tax concessions
- Small business CGT concessions
- Instant asset write-off
- Refundable R&D tax offset
- Base rate entity tax rate
We are pleased that the ATO has now confirmed that while the payments are classed as ordinary income, they are not derived in the ordinary course of business, and therefore will NOT be included in aggregated turnover. This should put small business owners mind at rest, that they will not lose any concession they are normally eligible for.
You can view the ATO’s update guidance here
If you have any questions about this, please contact your Taxpro accountant on 08 9240 7629 or email admin@taxproaustralia.com.au
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