JobKeeper Payment 2.0... the final phase!

To continue receiving JobKeeper payments between 4 January 2021 and 28 March 2021, employers will need to re-assess their eligibility to continue into Extension Period 2. You will need to demonstrate a significant decline in actual GST turnover using the " Basic Test " comparing the December 2020 quarter to the December 2019 quarter.

If you do not satisfy the decline in turnover test using the Basic Test, you can consider the various Alternative Tests which we have explained in detail in previous Tax Alerts:

Alternative Test categories 1 to 7 – click here
Alternative Test category 8 – click here

Extension Period 2

The full details of Extension Period 2 have been summarised in the following table:

Extension Period 2
Relevant dates?	4 January 2021 to 28 March 2021

JobKeeper Fortnights
JobKeeper Fortnights?	Wage Payment Date? (ie. date employees must be paid on or before)
FN #21 - 4 January 2021 – 17 January 2021	31 January 2021 **
FN #22 - 18 January 2021 – 31 January 2021	31 January 2021
FN #23 - 1 February 2021 – 14 February 2021	14 February 2021
FN #24 - 15 February 2021 – 28 February 2021	28 February 2021
FN #25 - 1 March 2021 – 14 March 2021	14 March 2021
FN #26 - 15 March 2021 – 28 March 2021	28 March 2021
Note:** JobKeeper Fortnight #21 has been given an extended Wage Payment Date, to provide additional time for a business to perform their "decline in turnover test" and ""80 hour test" analysis – both are explained below.

"Decline in turnover tests" for the Business/Employer …

Basic Test period for " decline in turnover test "?	The Business will need to confirm it has experienced a decline in "actual GST turnover" (and not projected turnover) for the December 2020 quarter (compared to the December 2019 quarter) …
Business with group aggregated turnover more than $1 bn …	.. of at least 50%
Business with group aggregated turnover less than $1 bn …	.. of at least 30%
Charities and ACNC entities …	.. of at least 15%

If you do not satisfy the decline in turnover test using the Basic Test, you can consider the various Alternative Tests which we have explained in detail in previous Tax Alerts: • Alternative Test categories 1 to 7 – click here • Alternative Test category 8 – click here

New rules/tests for Employees/ Business Participants/ Religious Practitioners …
Two-tier payment rates?	Determines the minimum wage each eligible employee, business participant or religious practitioner is paid per fortnight …
Tier 1 - High Rate …	$1,000 per Fortnight (when Hours Worked more than 80 hours* during the test period)*
Tier 2 - Low Rate …	$650 per Fortnight (when Hours Worked less than 80 hours* during the test period)*

Number of " Hours Worked "?	This test determines the Payment Rate which will apply to each eligible employee, business participant or religious practitioner during each Extension Period. When the total hours worked during the test period is; more than 80 hours the High Rate applies , and if it is less than 80 hours the Low Rate applies . *Note:* the threshold of 80 hours for the test period* is equivalent to the previous terminology used (ie. 20 hours or more on average per week for a four weeks period).*

For Employees …	The total "hours worked" by each eligible employee (including work performed, paid leave and paid absence on public holidays) in either : the 28-day period ended before 1 March 2020 ; or the 28-day period ended before 1 July 2020 .
For Eligible Business Participants ….	The total "hours actively engaged" by the eligible business participant (including work performed, undertaking specific tasks in business development, planning, regulatory compliance or similar activities) in the month of February 2020 .
For Religious Practitioners …	The total "hours spent doing activities" by the religious practitioner (including in the pursuit of their vocation by performance of the rituals or practices (ie. participation in services, prayer, contemplation or meditation) and furtherance of the objectives of the religious organisation (ie. missionary or charitable work)) in the month of February 2020 .
*Note:* In some circumstances, an alternative reference period can be applied for the "80 hour test" if the standard reference period is not suitable.

Wage payment due date extended for JobKeeper Fortnight #21 (4 January 2021 – 17 January 2021)	As explained above for Extension Period 2, the Business needs to test actual "decline in turnover" for the December 2020 quarter (and this can only be done after 30 December 2020 has passed). Consequently, the ATO has extended the "wage payment due date for Fortnight 21 until 31 January 2021 , in order to meet the wage condition for all employees included in the JobKeeper scheme.

New Participants (who have not enrolled yet)

If you have not enrolled for the JobKeeper Payment scheme until now, you will need to complete the following actions by the end of the month that you wish to claim for:

Enrol for the JobKeeper Payment (be aware that it may take the ATO up to 3 days to process before you can submit your decline in turnover form and identify your eligible employees).
Submit your decline in turnover form.
Identify your eligible employees or business participant and tell us whether the tier 1 (high rate) or tier 2 (low rate) payment rate applies to them – the payment rates are detailed in the table above.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

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Practice Update – October 2025

October 3, 2025

ATO interest charges are no longer tax deductible – What you can do As we explained in our Practice Update for September, general interest charge ( GIC ) and shortfall interest charge ( SIC ) imposed by the ATO is no longer tax-deductible from 1 July 2025. This applies regardless of whether the underlying tax debt relates to past or future income years. With GIC currently at 11.17%, this is now one of the most expensive forms of finance in the market — and unlike in the past, you won’t get a deduction to offset the cost. For many taxpayers, this makes relying on an ATO payment plan a costly strategy. Refinancing ATO debt Businesses can sometimes refinance tax debts with a bank or other lender. Unlike GIC and SIC amounts, interest on these loans might be deductible for tax purposes, provided the borrowing is connected to business activities. While tax debts will sometimes relate to income tax or CGT liabilities, remember that interest could also be deductible where money is borrowed to pay other tax debts relating to a business, such as: GST; PAYG instalments; PAYG withholding for employees; and FBT. However, before taking any action to refinance ATO debt it is important to carefully consider whether you will be able to deduct the interest expenses or not. Individuals If you are an individual with a tax debt, the treatment of interest expenses incurred on a loan used to pay that tax debt really depends on the extent to which the tax debt arose from a business activity: Sole traders: If you are genuinely carrying on a business, interest on borrowings used to pay tax debts from that business is generally deductible. Employees or investors: If your tax debt relates to salary, wages, rental income, dividends, or other investment income, the interest is not deductible. Refinancing may still reduce overall interest costs depending on the interest rate on the new loan, but it won’t generate a tax deduction.

Audit Lowe Down – Costs incurred in acquiring / forming a business

September 9, 2025

Costs incurred in acquiring / forming a business. Further to the recent blog about capitalisation of costs when acquiring an asset, we have received a number of questions in relation to costs incurred in setting up / purchasing a business. Formation costs on establishing a business: These costs would include: Incorporation fees ASIC registration fees Legal fees Business name registration Pre-operating costs Pre-opening costs. The relevant standard for these costs is AASB 138 Intangible Assets and paragraph 69a confirms that these start-up costs are expensed when incurred. There is no identifiable asset controlled by the entity when the costs are incurred as the entity does not exist. Business acquisition costs These costs would include: Legal and accounting fees Due diligence and valuation costs Stamp duty Advisory or brokerage fees Project management costs related to the acquisition Internal costs allocated to the transaction In contrast to the asset acquisition discussed previously, AASB 3 Business Combinations requires all acquisition costs to be expensed as incurred. This means that they are not included as part of the consideration paid and therefore do not affect calculated goodwill. Entities purchasing businesses should be aware that these costs are not able to be capitalised as they can often be substantial, and purchasers often do not expect the costs to be taken directly to the income statement

Practice Update – September 2025

September 8, 2025

ATO to include tax 'debts on hold' in taxpayer account balances From August 2025, the Australian Taxation Office ( ATO ) is progressively including 'debts on hold' in relevant taxpayer ATO account balances. A 'debt on hold' is an outstanding tax debt where the ATO has previously paused debt collection actions. Tax debts will generally be placed on hold where the ATO decides it is not cost effective to collect the debt at the time. The ATO is currently required by law to offset such 'debts on hold' against any refunds or credits the taxpayer is entitled to. The difficulty with these debts is that the ATO has not traditionally recorded them on taxpayer's ATO account balances. Taxpayers with 'debts on hold' of $100 or more will receive (or their tax agent will receive) a letter before it is added to their ATO account balance (which can be viewed in the ATO's online services or the statement of account). Taxpayers with a 'debt on hold' of less than $100 will not receive a letter, but the debt will be included in their ATO account balance. The ATO has advised it will remit the general interest charge ( GIC ) that is applied to 'debts on hold' for periods where they have not been included in account balances. This means that taxpayers have not been charged GIC for this period. The ATO will stop remitting GIC six months from the day the taxpayer's 'debt on hold' is included in their account balance. After this, GIC will start to apply.