According to the ATO, the basic turnover test is satisfied when your businesses projected GST turnover for the turnover test period falls short of your current GST turnover for the relevant comparison period (by at least 30%).
In the event your business doesn’t satisfy this test, you are now able to apply for an alternative under the Federal Government’s Coronavirus Economic Response Package (Payments and Benefits) Act 2020.
The alternative test covers sole traders who may have taken leave, new businesses, high-growth business and more.
When does an alternative test apply?
There are seven circumstances where an alternative test would apply includes:
1. You commenced business after the relevant comparison period – i.e. your business did not exist in that period.
- For example: start-ups who may be less than a year old and would not have revenue figures from a year ago to compare to.
2. You acquired or disposed of part of your business after the relevant comparison period – i.e. the business is not the same business in that period as it is now.
3. You undertook a restructure after the relevant comparison period – i.e. the business is not the same business in that period as it is now.
4. Your turnover substantially increased by:
- 50% or more in the 12 months immediately before the applicable turnover test period.
- 25% or more in the 6 months immediately before the applicable turnover test period.
- 12.5% or more in the 3 months immediately before the applicable turnover test period.
5. Your business was affected by drought or other declared natural disasters during the relevant comparison period.
- For example: if your agriculture business has been heavily impacted by the ongoing drought in Australia, your revenue figures may be skewed when compared.
6. Your business has a large irregular variance in its turnover for the quarters ending in the 12 months before the applicable turnover test period (this excludes businesses that have cyclical or seasonal variance in their turnover).
7. If you’re a sole trader or part of a small partnership where sickness, injury or leave has impacted your ability to work which has, in turn, affected turnover.