Welcome to iTax.com.au
We are a firm of Chartered Accountants in Surry Hills near Sydney's Central Railway. The City is conveniently located at our doorstep.
Services offered include Accounting Systems and Taxation Advisory, Income Tax Return and Financial Report Compilation for the full spectrum of entities.
COVID 19 GOVERNMENT ASSISTANCE
The announced support packages for NSW businesses will require up to date records to determine and support eligiblity. There is also a disaster or emergency payment for individuals in NSW SA and Victoria. (see below)
- According to a NSW Govt spokesperson, business applicants need to be able to reasonably demonstrate that the downturn in turnover is "due to restrictions in place" from the lockdown. ( per NSW Govt Accountants seminar 9 August 2021)
- The spokesperson said that by signing a Certificate for the Business assistance packages, Accountants are effectively "attesting that there is a linkage"; that the downturn is "attributable" to these restrictions. ( per NSW Govt Accountants seminar 9 August 2021) This stance may be disputed by the Accounting profession, but it certainly adds to the pressure felt by our community..
- Impacted Businesses and individuals in NSW need to apply via the Service NSW App. Some applications may require an Accountants certified statement based upon evidence provided.
- Evidence of payroll and turnover may need to be supplied with each application. Links to the relevant NSW application are provided below.
- Residents of Victoria and SA may be eligible for disaster payment and other benefits.
- Certain businesses that may have been eligible for jobkeeper will be excluded from the NSW Government grants. An example is entities whose source of income is principally passive.
- The Tax impact has been listed alongside each category. "NANE" is short for non assessable non exempt.
- This is NOT an exhaustive list of available assistance.
- Details keep changing. Be cautious re expiry dates; do not rely on the dates listed here as they have changed several times over past few weeks.
- Before considering other criteria NSW based businesses must demonstrate at least a 30 % reduction in turnover.
- In some circumstances a director of a business that has employees may be personally eligible for the disaster payment. Non employing sole trader businesses may not be eligible for job saver and disaster payment.
- This summary is provided as a public service but is not to be relied on without advice from our Firm or an appropriate professional advisor.
Turnover Test - Previously Relevant if already applied for assistance
For the business grants, the test period was stated to be minimum of a fortnight within a time frame for 2019 and 2021; the starting point being selection of "lowest turnover fortnight" in the 2021 period. This has been one of many sources of confusion as the NSW Government have confirmed that the full 3 week period to 17 July 21 may be chosen. The emphasis has been a "Minimum of a fortnight."
More Flexible Turnover Test Announced 9 August 2021
At a webinar presented to the Accounting profession, a more flexible comparison period for decline in turnover test was introduced; for the jobsaver for minimum two week period 26 June to 28 August 2021,
compared to the same period in 2019,
or the same period in 2020 , or
the two week period immediately before lockdown commenced (11- 25 June 2021).
Threshholds :
1 and 2 below are for businesses having turnover between $ 75,000 and $ 250 million (increased 28 July 21) Hours lost is the trigger for entitlement to disaster payment for individuals.
NSW Government Tool kit version 28 July 2021 - Download
1. Covid Business Grant Tax Impact "NANE" (from $ 7,500 , $ 10,500 or $ 15,000) to be expended for defined operating expenses based upon a test period for turnover between 26 June and 17 July
www.service.nsw.gov.au/transaction/2021-covid-19-business-grant
2. Job Saver Grant Tax impact - "NANE" (40 % of gross wages = $ 1,500 to $ 100,000 per week-cap increased 28 July 21) will be for businesses based upon a test period 26 June to 26 July ( may be extended to 28 August 2021) and be similar to job keeper, being a % of gross wages
www.service.nsw.gov.au/transction/jobsaver-payment
3. Micro Business Grants ( $ 1,500 per FN tax free) for businesses with turnover of at least $ 30,000 and lower than $ 75,000, The test period will be 26 June to 26 July ( may be extended to 28 August 2021)
www.service.nsw.gov.au/transaction/2021-covid-19-micro-business-grant Deadline now 18 October 2021
Eligible turnover seems to be based on the GST method selected by the business for activity statement purposes. So for a business registered for GST receipts based turnover would be based on debtors collected excluding GST, accruals based would be amounts invoiced less GST. For micro businesses this is unclear but the receipts based method may likely apply.
The Grant appears to be a one off lifeline for eligible businesses that have been adversely impacted by Covid and is quite onerous. Its now open but expires 13 September 2021.
The grant applied early in the lockdown whereas the other packages commenced after 26 July 2021 but may be ongoing whilst the lockdown persists in NSW. Applicants will be required to sign a declaration as to the bona fides of the basis for a claim and obtain a certificate from their Tax Agent plus provide supporting evidence. The grant needs to be expended for operating the business, whereas the job subsidy is just that. Each application for a grant may be audited.
Disaster Payment -Tax Impact "NANE" Non Assessable non exempt - applies for NSW SA and Victoria
This will be a weekly payment of $ 450 pw if 8 to 19 hours lost or $ 750 pw if 20 hours pw or more lost since start of lockdown in NSW (defined different dates base on location but since 18 July for greater part of Sydney) The "liquid assets test" of $ 10,000 was abolished after the first week.
www.servicesaustralia.gov.au/individuals/services/centrelink/covid-19-disaster-payment
SA Residents : www.servicesaustralia.gov.au/individuals/services/centrelink/covid-19-disaster-payment-south-australia
Victorian Residents www.servicesaustralia.gov.au/individuals/services/centrelink/covid-19-disaster-payment-victoria
General Security and Business Identification Issues
- Service NSW App - Please ensure business data is up to date so that you and your business may be identified.
- ABR Website Data - Please check details are up to date.
- Business decisionmakers need to prepare and securely make available an inventory of important documents and online access details in case they are disabled. Are the files and documents accessible to a trusted person who can assume that role ?
- Small business owners need to therefore consider whether they have requisit powers of attorney in place and the right people know where and how to access these documents.
- Businesses need to revisit their tax and cash flow plans for the year ahead. Will employees need to work remotely or take leave ? Consider annual and long service leave scenarios for employees.
- Once we have our realistic achievable plans in place we need to communicate with all internal stakeholders, both employees and Directors and then with Debtors, Creditors, our Bank and the Australian Taxation Office where appropriate. Does the business require assistance from the Bank or a concessional payment arrangement with the ATO, or is action required to ensure the business benefits from the recently legislated Government assistance packages. (see some key matters below)
Stay Vigilant Stay Healthy !
iTax Solutions, Chartered Accountants for professional assistance: 02 9319 2504
Note and Disclaimer : This Firm provides financial counselling; but not investment (as defined by ASIC); advice. References or links on this site to investment products, superannuation or investment advisors are not to be construed as endorsements, advice or referrals; by our Firm.
