Information about ‘How Does a Sole Trader Apply for JobKeeper’ has just been made available from the ATO to help small businesses understand the process for securing the fortnightly payment. It is part of a raft of initiatives from the Government during COVID-19 to help businesses survive the economic impact COVID-19 has caused. Nearly 1 million companies have shown interest in getting information about the process.
The Australian Taxation Office (ATO) has officially opened JobKeeper applications and is encouraging businesses to sign up with information about the $130 billion scheme releasing on their website.
1. What is JobKeeper?
$1,500 paid fortnightly from the Government to help keep the economy active during COVID-19.
- Sole traders and self employed people may be eligible to receive the JobKeeper Payment if your turnover has reduced due to COVID-19. It follows a registration process for eligible businesses.
- The Government will provide $1,500 per fortnight until 27 September 2020 for eligible businesses.
2. How is a sole trader eligible for JobKeeper?
A business needs to meet eligibility criteria to get access to JobKeeper.
Sole traders will be eligible for the JobKeeper Payment if, at the time of applying, they;
- Estimate their business’ GST turnover has fallen or will fall by 30 per cent or more (assuming their business’ aggregated turnover (for income tax purposes) is less than $1 billion)
- Had an ABN on or before 12 March 2020, and
- Either had an amount included in their assessable income for the 2018-19 year and it was included in their income tax return lodged on or before 12 March 2020 (or such later time as allowed by the Tax Commissioner), or
- Made a supply during the period 1 July 2018 to 12 March 2020 and provided this information to the Tax Commissioner on or before 12 March 2020 (or such later time as allowed by the Tax Commissioner)
- Were actively engaged in the business
- Are not a permanent employee of any other employer
- Are not entitled to another JobKeeper Payment (either a nominated business participant of another business or as an eligible employee)
- Were aged at least 16 years of age as at 1 March 2020
- Were an resident for Australian tax purposes on 1 March 2020
- Were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020
An example of eligibility of a sole trader provided by the ATO.
- Jameela is a sole trader and operates a cupcake business.
- She is an Australian resident with an ABN and has been running her business since 2017.
- Jameela runs her business as a sole trader with no employees.
- Jameela projects a fall in turnover in her cupcake business of approximately 80% in April 2020 compared with April 2019 as a result of the coronavirus.
- Jameela is an eligible business participant and qualifies for the JobKeeper Payment scheme
3. What could a Sole Trader be spending their JobKeeper payment on?
After paying bills sole trader small businesses could develop their business to plan for the future.
While times are tough in some industries, every Sole Trader has an opportunity to develop their business and plan for the future as things begin to recover. Every small business could be looking at how they are presented online, review their search engine performance or even their competitive position in the marketplace.
So after bills have been paid & staff kept on, a portion of your JobKeeper payment could go into business and brand development. Below are some examples of work we have done for other small businesses.
4. How Does A Sole Trader Apply for JobKeeper?
The ATO has released a new information page specifically for Sole Traders about the JobKeeper Payment
You need to log into the business portal on the ATO’s website using your MyGovID & follow the steps provided. Applications will remain open until the end of May but of course the faster you do it the better to start receiving payments.
For those using an AUSKEY login you need to switch over to a MyGov ID which is the new authentication system that went live in April.
5. Where can you get more information about JobKeeper?
Go to the ATO Website for specific information and updates about JobKeeper
The ATO has released a guide for Sole Traders
There is a lot of other information available on the ATO website to help sole traders work out what they can claim and the difference between JobKeeper and other Government assistance available.