• Test 2: Is your STS average turnover less than $1 million?

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    You work out your STS average turnover for an income year either by looking back to actual turnover in previous years or by looking forward to estimated future turnover.

    Before you can work out your STS average turnover you need to know your STS group turnover.

    Your STS group turnover is the value of business supplies you make in the ordinary course of your business and the value of business supplies any businesses you are grouped with make in the ordinary course of their business. It does not include any business supplies made between you and businesses you are grouped with.

    For more information, phone the Business Infoline on 13 28 66 or see Taxation Ruling TR 2002/11 - Income tax: Simplified Tax System eligibility - STS average turnover.

    Look back method

    Under the look back method, you calculate your STS average turnover using the average of your STS group turnovers of any three years out of the previous four income years (excluding the current year).

    If you have been in business for fewer than three years, you will need to calculate your STS average turnover for the number of years you have been in business (excluding the current year).

    If your business has operated for only part of any of those years, you must use a reasonable estimate of what your turnover would have been if you were in business for the full year.

    Use worksheet 1 to assist you with your calculation.

    Worksheet 1

    Income year

    STS group turnover

    2001-02

    $

    2002-03

    $

    2003-04

    $

    2004-05

    $

    Cross out the largest turnover amount if you have been in business for each of the four income years.

     

    Total of the three* years

    $

     

    (divide by 3*)

    STS average turnover

    $

    * or the number of years you have been in business if less than three years

    If your STS average turnover is less than $1 million you satisfy this test. Go to Test 3. Otherwise read on.

    Look forward method

    Under the look forward method you calculate your STS average turnover using a reasonable estimate of STS group turnovers for the current year and the following two years (ignoring any of those years for which you do not expect to be carrying on a business at any time in that year).

    Alternatively, you can use your actual STS group turnover for the current year and a reasonable estimate of your STS group turnover for each of the following two income years (ignoring any of those years for which you do not expect to be carrying on a business at any time in that year).

    If your business (or a grouped entity) has operated for only part of the current year, you must use a reasonable estimate of what your STS group turnover for this year would have been if you (or the grouped entity) had carried on a business throughout this year.

    Use worksheet 2 to assist you with your calculation.

    Worksheet 2

    Income year

    STS group turnover

    2005-06

    $

    2006-07

    $

    2007-08

    $

    Total of the three* years

    $

     

    (divide by 3*)

    STS average turnover

    $

    * or the number of years you expect to be in business if less than three years (see above)

    If your STS average turnover is less than $1 million you satisfy this test. Go to Test 3.

    Last modified: 01 Sep 2006QC 18499