Update: New guidance released 30 April 2020 from the ATO - Enrolling for JobKeeper payments? If you account for GST on a cash basis, you can use cash or accruals to calculate your GST turnover. If you currently use accruals to account for GST, we'd expect in most cases you'd continue to use this method. However, if you choose to use the cash basis, we may want to understand why the different approach is an appropriate reflection of turnover. Whichever calculation you use, you'll need to keep records to show how you worked it out and why this method was chosen.
JobKeeper cash v accruals
The ATO today updated their position on cash v accruals for JobKeeper - taking a much stauncher position.
One of the most common issues raised in relation to the JobKeeper package has been how to undertake the turnover reduction calculation and whether a cash or accruals basis should be used. Unfortunately this is also an area where the ATO has continued to update and change its guidance, including further updates in this area today.
The ATO's latest comments on this are below and basically suggest that if you use a method that is not consistent with your normal GST reporting basis then you may be asked to explain the position:
"The turnover calculation requires you to include sales that you have made, or are likely to make, in the relevant month or quarter. The calculations are based on the time you make the sales.
There are different ways of calculating turnover that may be reasonable in your circumstances.
As a practical matter, we expect that you will use the GST accounting method that you normally use. In other words, you may use a cash or accruals approach to determining the value of your sales in the relevant month or quarter. If you do this, typically, turnover for the relevant period will equal your GST exclusive sales less your input taxed supplies.
If you use GST calculations to determine turnover, don’t forget to include GST-free sales.
If you normally account for GST on an accruals basis, but seek to calculate on a cash basis (or vice versa), we may seek to understand your circumstances to ensure that the calculation achieves an appropriate reflection of your turnover.
If you aren’t registered for GST, we would expect you to use the same accounting method you use for income tax purposes.
Importantly, whichever basis you use must be used consistently in comparing the month or quarter in 2020 with the comparison month or quarter in 2019."
We'll bring you the latest as we hear or see it.