Service NSW tweaks turnover comparison period for Covid grants

Service NSW has now changed the turnover comparison period for its COVID-19 business support payments, as it hopes to streamline its claims process that has resulted in over 20,000 calls a day.

Businesses in NSW will now be able to gain access to the COVID-19 business grant, micro-business grant and the JobSaver payment if they are able to prove a decline in turnover over a minimum two-week period during the lockdown compared to the same period in either 2019, 2020, or the two-week period immediately before the Greater Sydney lockdown that commenced on 26 June.

“So, any two weeks in that period with the equivalent two-week period either in 2020 or if bushfires or other lockdowns affected them that year, then they can go back to 2019,” said Michael Gadiel, executive director of economic strategy at NSW Treasury.

“If the business doesn’t have a trading history that long, then it can compare that revenue to two weeks immediately prior to the lockdown.

“I think this is an improvement because it gets up front with what the tests are; people don’t have to contact Service NSW; they can just apply directly using one of those three comparisons of their choice.”

Mr Gadiel has also clarified that the decline in turnover must be calculated using the same method that GST is currently accounted for by the business.

“If you are reporting GST on cash terms, then it is cash; if you are reporting GST on accrual terms, then it is accruals,” said Mr Gadiel on Monday.

“I know there are issues around a cash business saying I can’t demonstrate a decline because I am still getting cheques coming in.

“We know the main difference between cash and accrual is timing, and given the length of the lockdown, you will be eligible at some point because if the business has ceased to trade then the income will decline, but it just may be a deferred decline to what it might be for an accruals business.

“You will still be eligible for payments under the JobSaver package, but you might have to wait until the revenue has actually declined before making the application.”

The change in the turnover comparison period comes as Service NSW looks to ease pressure on its application assessment team, who have been dealing with up to 20,000 calls a day and a further 5,000 requests for a callback each day.

To date, Service NSW has received 104,000 applications for its COVID-19 business grant, with $278 million approved to be paid. Its micro-business grant has attracted 22,000 businesses, with $417,000 worth of payments approved. Over 67,000 businesses are also on JobSaver, with $86 million approved for payment.

Service NSW has also now confirmed that accountants can apply for the support payments on behalf of their clients. Businesses will need to provide a letter of authority to show that their accountant is authorised to act on their behalf if their accountant is not listed as an associate on the Australian Business Register.

Small businesses to get (temporary) tax relief

MORE than a million small businesses will get relief on their tax bills in the new year to help cope with the economic slump.

In a fresh move to prop up the economy, the Federal Government will cut the December quarter tax instalment for small businesses by 20 per cent. Most businesses pay the instalment in February.

The Government will announce the move today as more danger signs emerge, with unemployment edging up for a second successive month and with China suffering a slump in exports and imports — a development one analyst described as a disaster for Australia.

About 1.3 million Australian businesses with an annual turnover of $2 million or less will qualify for the tax relief.

The Government says the reduction in the December quarter instalment will more accurately reflect small businesses’ average actual profit growth in the current economic environment.

It says it will provide immediate and much-needed cash flow relief to small businesses and encourage small business confidence.

If a business’s income ultimately justifies higher tax than is paid, the business will have to make up the unpaid amount later. But it will have had advantage of the cash until then.

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