Home – New Forums Money matters Government Stimulus Package for Small Business Reply To: Government Stimulus Package for Small Business

#1222776
James Millar
Participant
  • Total posts: 1,739
Up
0
::
cloud777, post: 269334, member: 117496 wrote:
I am a company director who generally takes ‘drawings’, as many do. The company is registered for PAYG and we have employees, but it’s still unclear to me whether I’m personally eligible for the $1,500 payment.

My impression from this thread is that the answer is probably no, but the links below seem to suggest yes:

“Yes you can apply for JobKeeper … you can convert drawings to wages.”
(https://www.dailytelegraph.com.au/coronavirus/hibernation/david-gandolfo-answers-your-small-business-questions/news-story/d0ccff9f85118b4d962aaa2cccae8fda)

“The subsidy is available to their employees and the principal has the option of converting their drawings to a fortnightly wage to receive the subsidy also”
(https://acapmag.com.au/2020/03/wage-subsidy-what-you-need-to-know/)

Would really love to know the answer because my accountant isn’t sure either…

Thanks,

Jason

All rubbish. There is nothing in any measure that states that a drawings to wages switch is outright acceptable and certainly, when it comes to the cash flow boost payment the ATO has specifically warned against this (they have an integrity measure to guard against abuse). Jobkeeper legislation will likely have the same provision.

It is possible that if you can show evidence of intent to record as a wage before March 2020 and administratively had not done it yet then that may be safe. Also perhaps for new entities and those first turning a profit. Point is you need a case to show that claiming these entitlements was not your sole or dominant purpose. For everyone that is now making that decision you run the risk of the integrity measures being applied and repayment. Remember the Commissioner is right until you prove him wrong (reversal of the onus of proof – normally you are innocent until proven guilty but tax law does not work that way)

Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900