Despite previous guidance from Government, the ATO has today advised AusBiotech that its application for a class ruling on the JobKeeper payment for pre-revenue companies cannot be made by the Tax Commissioner.
The ATO advice said, “This is because the JobKeeper payment provisions do not fall within any of the categories of provisions for which the Commissioner can make a class ruling under division 358 of Schedule 1 to the TAA.”
The ATO last week released additional eligibility criteria has been added to the current scheme to make it more broadly-applicable to some revenue-generating companies, previously excluded from the payment.
AusBiotech CEO, Lorraine Chiroiu, said: “The ATO response is hugely disappointing, with pre-revenue biotech and medtech companies hurtling badly.”
“With venture capital and cash-flow that life sciences companies rely on drying up during the COVID-19 crisis, access to Government support is critical in retaining Australia’s world-class life science talent while managing the crisis.”
“The request that pre-revenue life science companies be included due to their unique business model, was also in acknowledgment of their contribution to health, society and the economy.”
For those with revenue, access to JobKepeer has been slightly expanded with an alternative ‘decline in turnover’ test that recognises that sometimes it may not be appropriate for an entity to compare their current monthly or quarterly GST turnover with the same period a year ago, for example, for those with lumpy revenue or those who have experienced high growth.
Circumstances where an alternative test applies include:
- The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover.
- The entity’s turnover substantially increased by
- 50% or more in the 12 months immediately before the applicable turnover test period, or
- 25% or more in the 6 months immediately before the applicable turnover test period, or
- 5% or more in the 3 months immediately before the applicable turnover test period.
- The entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020.
- The entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now).
- The entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now).
More information on alternative tests, including how to apply, can be found on the ATO site.