Servicing Greater Sydney, Parramatta

COVID-19 Lockdown - Business Support - August Special Edition

There have been some recent changes to the eligibility criteria for businesses to access both the COVID 19 Business Grant and the JobSaver program. Notably the decline in turnover test comparison period has been broadened which will see more businesses qualify for the support measures.

Further, rent relief will be mandated for eligible tenants and smaller landlords can access a monthly grant.

Three primary methods of financial support are available to businesses during this extended lockdown:

Other support is available through:

As usual, please do not hesitate to call us on (02) 9891 6100 should you wish to discuss how any of the points raised in the report specifically affect you, or click here to send us an email.
           

Warm regards,

Anthony

Anthony Saccaro, Director
Spry Roughley Services Pty Limited


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2021 COVID-19 Business Grant of up to $15,000

The COVID-19 Business Grant provides up to $15,000 to eligible businesses (including not-for-profits and sole traders) with annual wages of up to $10 million.

The value of the grant is determined by the impact of the lockdown on your turnover. Your business will need to prove a decline in turnover across a minimum 2 week period from 26 June 2021 to 17 July 2021 (or 27 May 2021 to 17 July 2021 for businesses on the NSW border with Victoria).
            
            
Decline in turnover  Grant
70% or more $15,000
50% or more $10,500
30% or more $7,500
        

Eligibility

The 2021 COVID-19 business grant is available if you:

  • Have an active ABN; and
  • Can demonstrate that your business was operating in NSW as at 1 June 2021; and
  • Had total annual Australian wages of $10m or less as at 1 July 2020; and
  • Had an aggregated annual turnover between $75,000 and $50m (inclusive) for the year ended 30 June 2020; and
  • Have unavoidable business costs from 1 June 2021 for which there is no other government support available; and
  • Maintain employee headcount as at 13 July 2021 – the number of people you employed in NSW including full time, part time and long-term casuals that have been employed by the business for more than 12 months; and
  • Have experienced a decline in turnover of 30% or more over a minimum 2-week period from 26 June 2021 to 17 July 2021 (27 May 2021 to 17 July 2021 for businesses on the NSW border with Victoria) compared to:
    • The same period in 2019;
    • The same period in 2020; or
    • The 2-week period immediately before the start of the relevant lockdown test period.

Some businesses are ineligible for the grant. These include businesses predominantly earning passive income (rent, interest, or dividends), businesses owned by sovereign entities (foreign Governments), businesses in liquidation or bankruptcy proceedings, businesses that did not have an ABN as at 1 June, government agencies, local governments, banks, and universities.

For new business and businesses where 2019-20 was not a normal year

For businesses that were in operation on 1 June 2021 but:

  • Were a new business that did not operate for a full year; or
  • Were impacted by acquisition, disposal or restructure

you can use a 3 month period that is representative of your normal operating environment to prove your turnover. Generally, a business activity statement or income tax return will be required as evidence of turnover, or if these are not available, a letter from your accountant or bank statements can be used.

For businesses where 2019-20 was not a normal year, for example your business was impacted by the bushfires or for sole traders or small partnerships impacted by illness, you can use 2018 as your comparison period.

These alternatives apply to the 2021 COVID-19 Business Grant, JobSaver and Micro-business grant.

How to apply

Applications are made online through Service NSW and close at 11:59pm on 13 September 2021.

To apply for the grant, you will need a series of documents to evidence your application:

  • An Australian Income Tax Return (or Notice of Assessment) or other documentation demonstrating your business had, or would have had, an aggregated annual turnover
  • If your business is not on the highly impacted list of industries, you must supply a letter from your accountant evidencing your businesses decline in turnover
  • Details of your accountant, tax agent, BAS agent
  • For businesses operating outside of NSW but claiming they were operating in NSW as at 1 June:
    • Commercial rates notices or lease agreements
    • In the absence of rates or lease agreements – utility bills, insurance documents, supply invoices, registration papers, contractor licenses etc

Eligible expenses such as invoices may also be required if an audit is undertaken.

Common questions

How is aggregated annual turnover measured?

Aggregated turnover is generally your business's annual turnover plus the annual turnover of any business connected with you or that are an affiliate of yours. If you have any related entities that carry on a business, please contact us and we'll work with you on calculating this figure.

Annual turnover generally includes income that has been generated in the ordinary course of carrying on a business. You would normally use GST-exclusive figures for this purpose. ATO guidance suggests that JobKeeper and cash flow boost amounts would probably be ignored as part of this calculation.

How is decline in turnover measured?

In general, the concept of 'current GST turnover' is used to determine whether the business has suffered a decline in turnover of at least 30%. This turnover test includes proceeds from the sale of capital assets, GST free supplies such as exports, and supplies made between members of a GST group.

When you are calculating turnover, if your business accounts for GST on an accrual basis, you should use this method. If you account for GST on a cash basis, you should use this method.

Can I get the JobSaver and the business grant?

If your business meets the eligibility conditions, you can access both the grant and JobSaver.

If your business does not have any employees, you cannot access the grant if persons associated with the business, and who derive income from it, have applied for, or are receiving, the Commonwealth COVID-19 Disaster Payment.

If your business is in the performing arts sector, please see the NSW Performing Arts COVID support package – CreateNSW is streamlining all applications through them.

I don't employ staff, can I still get the grant?

For sole traders and other businesses without employees, you can access the grant if you meet the other eligibility criteria but only if persons associated with the business, and who derive income from it, have not applied for, and are not receiving, the Commonwealth COVID-19 Disaster Payment.

If your business is in the performing arts sector, please see the NSW Performing Arts COVID support package – CreateNSW is streamlining all applications through them.

I don't employ staff, can I still get the grant?

For sole traders and other businesses without employees, you can access the grant if you meet the other eligibility criteria but only if persons associated with the business, and who derive income from it, have not applied for, and are not receiving, the Commonwealth COVID-19 Disaster Payment.


JobSaver: Cashflow Support of up to $100,000 

JobSaver is a weekly payment between a minimum of $1,500 and maximum of $100,000 based on 40% of the NSW payroll payments of your business (including not-for-profits).

Eligible businesses without employees that meet the eligibility criteria (such as sole traders with no employees), will be able to access a payment of $1,000 per week.

JobSaver applies from week four of the lockdown (from 18 July for Greater Sydney) and will cease when lockdown restrictions are eased or when the Commonwealth hotspot declaration is removed.

Funding is limited to specific purposes such as salaries and wages, utilities and rent, financial and legal support, marketing and perishable goods, etc.

Eligibility

To access JobSaver, you must:

  • Have an active ABN; and
  • Demonstrate that your business was operating in NSW as at 1 June 2021; and
  • Have an aggregated turnover between $75,000 and $250 million for the year ended 30 June 2020 (for businesses that were not in operation for the full year or where conditions were not usual in 2019-20, see For new business and businesses where 2019-20 was not a normal year above); and
  • Have experienced a decline in turnover of at least 30% over a minimum 2-week period from the start of the Greater Sydney Lockdown (from 26 June 2021), compared to:
    • The same period in 2019, or
    • The same period in 2020, or
    • The 2-week period immediately before the start of the lockdown period (26 June 2021).
  • And, maintain employee headcount as at 13 July 2021 – the number of people you employed in NSW including full time, part time and long-term casuals that have been employed by the business for more than 12 months.

Some businesses are ineligible for JobSaver. These include businesses predominantly earning passive income (rent, interest, or dividends), businesses owned by sovereign entities (foreign Governments), businesses in liquidation or bankruptcy proceedings, businesses that did not have an ABN as at 1 June or backdated their ABN, government agencies, local governments, banks, and universities.

How to apply

Applications can be made online through Service NSW and close at 11:59pm on 18 October 2021. 

If your business has successfully applied for the COVID-19 business grant, your business will be automatically eligible for JobSaver but will need to provide the additional information on payroll and headcount. 

To apply for JobSaver, you will need the following for the business: 

  • Australian income tax return, Notice of Assessment or other documentation demonstrating the business had a national aggregated annual turnover of between $75,000 and $250 million for the financial year ending 30 June 2020.
  • Weekly payroll – W1 amount excluding amounts withheld for contractors on the most recent BAS submitted prior to 26 June 2021 for the 2020-21 financial year, 2019-20 payroll reconciliation for those without a W1 amount (see How is the 40% of payroll calculated? below)

If your business is not on the highly impacted industries list, you will also need to submit a letter from your accountant demonstrating that that you meet the decline in turnover test.

How is the 40% of payroll calculated?

Payroll is based on your most recent Business Activity Statement (BAS) lodged with the ATO prior to 26 June 2021 for the 2020-21 financial year. Use the figure at item WI, removing any amounts withheld on behalf of contractors. To determine weekly payroll, divide the amount by the number of days in the BAS period and multiply this by 7.

For businesses with employees outside of NSW, you will need to calculate the amount based on just the NSW employees using the same method you use to report on your BAS.

If your business does not submit a BAS with a W1 amount, use your 2019-20 NSW payroll tax reconciliation return. If your business does not submit a BAS, you will need to contact ServiceNSW to discuss alternatives.

Where an employer's headcount changed because of circumstances outside the control of the employer (such as voluntary resignations, death of an employee) it will not be taken as a reduction in employee headcount on 13 July.

Common questions

I don't have employees; can I still qualify?

If your business does not have employees (such as sole traders) but meets all the other eligibility tests, you can apply for JobSaver but only if the individuals associated with and deriving income from the business have not received a Commonwealth COVID-19 Disaster Payment since 18 July 2021. You also need to ensure that the business is the primary income source for the associated person.

I have stood down my employees, do they still qualify for the headcount test?

Yes. If you have stood down your full time, part time or long-term casual employees, they are counted in the headcount. During a stand down the employment relationship remains (their role has not been terminated), the employee is not paid (unless they are taking paid leave), and they continue to accrue annual leave. See the FairWork website to clarify how and when an employer can stand down employees.

An employee has resigned, does this impact my headcount?

No. If the employee is no longer with the business due to circumstances outside of your control, such as resignation or death, this will not impact the headcount test.

If, however you forced the employee to resign or terminated their employment, this will impact on your headcount and eligibility for JobSaver and the COVID-19 business grant. Any actions taken by the business that reduce headcount will need to be reported to Service NSW.


$1,500 Micro-Business Grants 

The micro-business grant provides $1,500 per fortnight to sole traders and other small businesses with aggregated annual turnover between $30,000 and $75,000. The grants are available from week one of the lockdown until restrictions are eased.

Grants are for costs incurred from 1 June 2021 including salaries and wages, utilities and rent, financial and legal costs, perishable goods, etc.

Eligibility

To access the micro-business grant, you must:

  • Have an active ABN registered in NSW or can demonstrate your business was operating in NSW as at 1 June 2021; and
  • Have aggregated annual turnover of more than $30,000 and less than $75,000 for the year ended 30 June 2020 (for businesses that were not in operation for the full year or where conditions were not usual in 2019-20, see For new business and businesses where 2019-20 was not a normal year above);
  • Have experienced a decline in turnover of at least 30% over a minimum 2-week period from the start of the Greater Sydney Lockdown (from 26 June 2021), compared to
    • The same period in 2019, or
    • The same period in 2020, or
    • The 2-week period immediately before the start of the lockdown period
  • Have business costs for which there is no other government support available; and
  • Have not applied for either the 2021 COVID-19 Business Grant or JobSaver; and
  • Have less than 20 full time equivalent employees at 1 June 2021; and
  • If you are an employer, maintain your headcount as at 13 July 2021; and
  • If you do not have employees, such as a sole trader, the business making the application is your primary source of income.

Businesses that received the $1,500 small business fees and charges rebate can apply for this grant.

If your business does not have any employees, you cannot access the grant if persons associated with the business, and who derive income from it, have applied for, or are receiving, the Commonwealth COVID-19 Disaster Payment.

Ineligible businesses include those predominantly earning passive income (rent, interest, or dividends), or businesses in liquidation or individuals in bankruptcy proceedings.

How to apply

Applications are made online through Service NSW and close at 11:59pm on 18 October 2021.

If we submit the application for you, we will provide a letter to ServiceNSW documenting your decline in turnover and aggregated annual turnover.

If we are not submitting your application for you, you will need show evidence such as your income tax return, business activity statement, and business bank accounts.

If your business operates in another State or Territory, you will also need to evidence that your business operates in NSW (e.g., utility bills, insurance papers, supply invoices, registration papers, contractor licences).

Where your business operates through a trust structure, you will need to provide additional information to demonstrate that a national aggregated annual turnover of more than $30,000 and less than $75,000 is derived through the trust.

If your business is a not-for-profit, you will also need to provide a copy of your constitution, minutes and resolutions from your AGM for the last 3 years, and audited financial statements for the last 3 years.


Rent protection and grants 

Eviction moratorium

An eviction moratorium is in place for rental arrears where a tenant has:

  • An annual turnover of up to $50 million; and
  • Is eligible for the Micro-business COVID-19 Support Grant, the COVID-19 NSW Business Grant and/or the Job Saver Grant.

Commercial and retail landlords will need to attempt mediation before recovering a security bond or locking-out or evicting a tenant impacted by Public Health Orders.

See the NSW Small Business Commissioner for further details.

Rent Relief

Rent relief will be mandated for eligible tenants and smaller landlords can access a monthly grant.

The NSW Government will re-introduce the National Cabinet's Mandatory Code of Conduct for Commercial Leasing to mandate rent relief for eligible tenants impacted by COVID-19.

A new $40 million Hardship Fund will also be established to provide a monthly grant of up to $3,000 for small commercial or retail landlords who provide rental waivers of at least the value of the grant and any land tax relief they are eligible for.

The Retail and Other Commercial Leases (COVID-19) Regulation 2021 will be extended until 13 January 2022 and will require landlords to renegotiate rent having regard to National Cabinet's Code of Conduct. The Code of Conduct requires landlords to provide rent relief in proportion with their tenant's decline in turnover. Of the rent relief provided, at least 50 per cent must be in the form a waiver, and the balance a deferral.

The Regulation applies to commercial and retail tenants with a turnover of up to $50 million who qualify for the COVID-19 Microbusiness grant, COVID-19 Business Grant or JobSaver Payment. It will prohibit a landlord from evicting or locking out a tenant for certain breaches of the lease unless they have first renegotiated rent and attempted mediation.

The previous Retail and Other Commercial Leases (COVID-19) Regulation 2021 – which required commercial and retail landlords to attempt mediation before locking out or evicting their tenant – was due to expire on 20 August 2021 and has been amended to include these new measures.

Land tax relief

Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants is available for up to 100% of the 2021 land tax liability.

See Apply for COVID-19 land tax relief and Residential Tenancies Moratorium Application for rent negotiation


Payroll tax relief 

Payroll tax and lodgement deadline deferred

The due date for the 2020-21 annual reconciliation has been deferred until 7 October 2021. You also have the option of deferring July and August 2021 payroll tax payments until 7 October 2021.

Previous payroll tax deferrals and payment arrangements for 2020-21 due in July 2021 have not been deferred.

See Revenue NSW for further details.

25% payroll tax waiver for businesses between $1.2m and $10m

Businesses with Australian wages of between $1.2 million and $10 million that have experienced a 30% decline in turnover, will be provided with a 25% payroll tax waiver in 2021-22. Further details of the reduction will be available by the end of August from Revenue NSW

Gaming machine tax deferrals

All businesses paying hotel or club gaming machine tax will be able to defer the taxes for the 2021-22 financial year:

  • Hotels: deferrals for June and September quarter until 21 January 2022.
  • Clubs: deferrals for the August quarter until 21 December 2022.

Support for Performing Arts 

The NSW Performing Arts COVID support package covers performances impacted by NSW Government Public Health Orders from 26 June 2021.

The funding amount per performance is calculated using a formula of average ticket price multiplied by the number of tickets available for sale and a specified percentage tied to the lockdown period.

To be eligible for funding, you must be one of the following:

  • An eligible venue
  • A producer of an eligible performance scheduled to perform at one of the eligible venues
  • A promoter of an eligible performance scheduled to perform at one of the eligible venues.

See the full details and the list of eligible venues and performances here.

How to apply

Applications are made online through SmartyGrants.

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Spry Roughley Chartered Accountants

Phone
(+612) 9891 6100

Fax
(+612) 9635 4782

Email
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  • Our firm is built on being attentive to and extensively knowledgeable about our clients so we can work with them to help them to both achieve their goals and protect them from risk. We are forward looking in our advice and always aim to be practical and right.
    - Martin Roughley, Founder Associate
  • In business, there is so much going on and you don’t always have all the answers. That’s when you need to know who to call. Our clients call us.
    - Shaun Madders, Director
  • Going beyond the compliance and routine is what we do. By maintaining open and frank communication we are able to provide valuable insights and assist in driving the changes required to help our clients achieve their goals.
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