Speaking on the MyBusiness webcast on all things JobKeeper, Deborah Jenkins, Deputy Commissioner from the ATO, confirmed that businesses that are yet to lodge their 2018–19 tax return are still able to apply for the government’s wage subsidy measure under certain circumstances.
“Those people who have not yet lodged their income tax return, or maybe they’re not registered for GST, if you have a deferral in place for your lodgement, then we have exercised our discretion in those cases,” Ms Jenkins told MyBusiness.
In announcing the JobKeeper measure, the Treasurer had said that eligibility criteria required businesses to demonstrate business activity by lodging, before 12 March 2020, their 2018–19 income tax return showing business income, or an activity statement or GST return showing supplies.
However, the ATO has since made an exception and has released Practice Statement Law Administration (PS LA) 2020/1, setting out the commissioner’s discretion to allow further time in limited circumstance.
“There’s an integrity check in there to make sure that people have actually lodged their tax returns or either a tax or BAS return. And that’s for those eligible business participants that we’re talking about, mainly sole traders,” Ms Jenkins said.
“People have said to me, ‘Look, actually we have got an extension, we’ve got a deferral, we used a tax agent.’ Or they may have been impacted by bushfires, so they have a deferral as well.
“The commissioner actually has the discretion and he has exercised that discretion in a number of those circumstances.”
And according to the Tax Office’s new guidance, the commissioner will likely allow further time where an entity has not lodged by the relevant due date because either they have a pre-existing lodgement deferral in place, or they are a new business established from 1 July 2019 that is not registered or required to be registered for GST, but have made supplies during a period ending between the 1 July 2019 and 12 March 2020 period.
The ATO further explained that a pre-existing lodgement deferral is one made through the tax agent lodgement program or the deferrals for taxpayers affected by the recent bushfires.
Exceptional and unforeseen circumstances, such as the loss of a significant amount of records due to the recent bushfires, will also likely prompt the commissioner to grant further time.
“When having regard to all the relevant facts and circumstances of an entity’s situation, the ATO may need to contact the entity and obtain more information before we can determine whether the discretion should be exercised,” the Tax Office underlined.
“Additional supporting documentation will depend on the entity’s circumstances.”
