Latest COVID-19 Govt Assistance for Businesses

NSW Govt has announced a Victorian style incentive to affected smaller buisness and sole traders as they wont benefit from payroll tax concessions etc. $10K grants will be available.

Victorian Grants and application : Business Support Fund

www.nsw.gov.au was referred to by Premier at press briefing at 8:20am today for info and applying but at this time no info is given. Coming soon.

 

NSW Grants, Limited info by media release

To be eligible, businesses (incl sole traders) will need to:

• have between 1-19 employees and a turnover of more than $75,000
• a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000
• have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020
• be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020
• use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice
• provide appropriate documentation upon application.

Assumption turnover likely to be based on a prior period ?
Assumption that records supporting how it was spend will need to be retained. May not be available for sole traders to live off as such. Unsure if business rent is include - strange this was not mentioned as its a key concern for retail industry

 

Tip - All NSW persons job affected should seek the service nsw website. You can custom search for all concessions available based on range of factors. eg Drivers licending fees, rego + gas, electricity and more. Applicants for Centrelink consider the health care card being issued !! Quite a extensive and helpful toool. 70+ available savings

Tell any affected friends.

Cost of Living | Service NSW

 

the concessions available to a sole trader who doesn't have employees ? they keep referring to employees in these releases and a sole trader working on their own isn't an employee. wish they would stop doing that

 

The NSW govt suggest eligibility is based on must have employees. The sole trader no employee issue isnt apparent at present. I can see the concern theNSW Govt may have. A sole trader without a employee may have capacity under other measuers to seek jobseeker, jobkeeper etc and they could double dip at the benefit to genuine small business with employees. We have to wait see. All we have is a media release.

I dont think anyone is surprised with these inconsistencies. Just lawful reasons for being on a street vary massively between states. eg NSW a boyfriend can travel to visit and stay with GF. Not in Vic. You can walk or exercise alone or in pairs but not golf (Vic) and dont sit to gather your breath in NSW. Go fishing alone in NSW but on the other side of the Murray you could b fined. 2 people is a limit in NSW but up to how many can gather and meet in a room ? Yet Coles and Woolies have no limits to capacity. But the local corner store is.

Red tape and Govt doing what it does best They are making it up as they go and we all need to adapt and be patient and do as we are told.

 

The way I'm reading this a sole trader with no employees CAN get the jobkeeper assistance.
See Melissa the Florist example in "Fact Sheet Support for Sole Traders"

The case less clear for partnerships, trusts and pty ltds where mum and dad not drawing a wage in the true sense of the word. But I did read this on the HIA site The JobKeeper Payment Explained

"Businesses without employees will need to:

• provide an ABN for their business,
• nominate an individual to receive the payment and provide that individual’s Tax File Number; and
• provide a declaration as to recent business activity.

People who are self-employed will need to provide a monthly update to the ATO regarding their turnover to declare their continued eligibility for the payments.

Payments will be made monthly to the individual’s bank account."

Also these attached Fact Sheets are not EMs as such but they are issued by govt so have some basis I guess. Hope this helps.
Cheers.
FM

 

Foxy yes sole traders are eligible for JobKeeper even if it is just the sole trader (ie no employees) i actually have a visual on it (and others)

I was referring the new NSW Grant

Michael A. on LinkedIn: COVID Incentives Visual as at 02 April 2020 | 21 comments

 

Hi Paul, my login to Service NSW isn't bringing up any pages (need to call them) however where can this grant be applied at?

 

Could be wrong here and definitely don't encourage the behaviour

But sole traders that have switched or potential switch structures (eg sole trader - company/director) may also be eligible for Jobkeeper depending on the actual legislation

I believe this is the case with early superannuation access as technically their business has ceased since the corona virus

 

The trouble with applying for job seeker etc help is the amount of information you have to give. It is very time consuming, especially if self employed and you have assets and loans.

 

Switching from company to sole trader or vice versa will fail for activity based issues as well as turnover etc Benefits are intended for those who have reduced income. Are you suggesting redirection of income so a stable business is complying. That's appalling.

Seeking to claim incentives when unentitled is fraud and unqualified suggestions and opinions with an apparent disclaimer are unhelpful.

 

The application bit is a bit onerous but Centrelink are waiving a lot of subsequent follow up. Basic info only appears reqired to support reuced income, hours etc. I have suggested a few sole traders retain diligent records of the productive hours they can (if any) work. This pattern may also apply to invoiced work etc. One has provided feedback that when he was called back after almost 2 weeks they just wanted to see the reduced hours and $$$. He had unpaid invoices etc and they did say they will need to consider this is and when this is paid. The basic view I fear is that a robodebt mark II could be about to happen.

 

The jobseeker laws are before the senate and expected to be passed. They contain two basic issues.

1. They don't actually say anything! To be flexible they give massive powers to the Treasurer to literally make regulations. So no new news here. Those seeking answers get none. For now
2. Massive penalties like never seen for overclaims, fraud or efforts to game the system. I have never seen such penalties. All I can say is don't. It's all covered

Basic issue is a eligible employee can be paid by a employer and provided they are paid 1500 each fortnight the employer will get 1500 back. Sole traders too which is more than Centrelink but they can just receive it in arrears. Confusing that the employer will be paid fortnightly!!! ATO reporting will need to address this. How? Some form of new report which lists employees.

Message is to get registered at ato.gov.au now GET and get BANK DETAILS UPDATED. Tax agents can do this in minutes.

Key test is drop in revenue of 30% to 50%. Still no idea what this test is. Regulations to be made. Tomorrow?

 

That's the bit I'm waiting for, how to prove (and what constitutes) a revenue drop.

We haven't won a new contract since end of January, but our revenue income is still stable (and greater than the same periods of last year due to growing the business throughout the years).

We're just about out of work, so I'm now paying the staff wages to do nothing while we wait to see if we can qualify them for Job Keepers.

Problem is, our invoiced income won't see a downturn for another 6-8 weeks as the income coming in is for work completed and invoiced months ago (construction industry, try getting someone to pay their bills within 3 months of issuing them).

End of April will be our first massive drop in invoicing raised, but end of May/early June will be our first massive drop in income on the books yet we have't won a job for 8-9 weeks and by the time we"officially" qualify for Job Keepers I'll have been paying 3 staff for possibly up to 2 months+ to get to a qualifying point, only to likely not be back paid as whilst I'm paying them from hereon in we may not be in a qualifying position?

The cherry on top is, once this all picks up and we start winning work again, I'll have to pay wages for up to 3 months for the staff while we get through new projects that don't see income from until 90 days after we've started them, it'll be like starting the business all over again.

The really complicated bit is the sporadic nature in when our clients pay, so we may get through next month looking like we'll meet the 30% revenue downturn then at the end of the month a client decides to pay a large outstanding invoice and pushes us over.

I'm hoping they'll look at "sales" as such, and not just revenue/income. I can easily show a pattern of how much work we win per month for the last 4 years and that since end of Jan we've basically won nothing.

 

I read somewhere that the jobkeeper can be for staff recently laid off/stood down/furloughed, and who then return to work?

This might be an avenue.

 

Indeed, but then that means I'm sending guys home with no pay in the hope Job Keepers will back date for me to then pass the money to them? If we ultimatly don't qualify for the period where we have no work bu still income then they'll be home with no pay and no Centre Link?

Should know more in the next few days I guess, surely they would have thought this scenario though, must be any industries that run on essentially 90 day accounts?

 

The way the laws are drafted are very flexible so a reactive delay is not the result. The Treasuer and hence the Commissioner appear to be given broad power to literally make up their own tests for what an affected business is and the timing. I am speaking to many who say deposits at present are stable BUT they have no true orders and sales WILL fall or crash. The test date will need to become clearer in time.

Its important to remember that at present the application make for jobkeeper is a INTENT TO APPLY to join a mailing list at best. So do that first. Once regulations and ATO determinations are made and details become clearer the process will likely rapidly evolve. It may be frustrating but its day not weeks now.

Some strateies to prepare;
1. Bank details with ATO up to date ? Tax agents can update and check in seconds.
2. Intention has been applied for.
3. List of empliyees ? TFN, Date of birth etc
4. Check each employee who is NOT Full time. Are they employed elsewhere. Only ONE employer can claim so get them to advise which it will be.
5. Anyone employed under 12mths. Mark for later review. They may or may not be entitled
6. Plan future payments to staff. Will it be more of less than $1500 a FN ? This may affect entitlement
7. A employee stood down can be reinstated. And then eligible for jobkeeper but remember this is paid to the sole trader OR employer not the employee. The employer must pay then emplyee THEN claim jobseeker.
8. A employee cannot access both jobseeker and jobkeeper. Affected stood down employees you plan to re-engage need a plan. Start or consider this issue early. If you cant afford to pay them then jobkeeper may not be a option. You cant claim jobkeeper and leave them stood down !!! .

Also
1. Vic / NSW $10k grant applied for ?
2. Apprenticeship support ? This may prevail v's jobkeeper.

AND New income accounts in your accounting software (wouldnt you hate to pay tax by accident !!)
1. Cashflow Stimuus Boost (Tax Free)...Important tax free isnt misssed. No gst applies too
2. State Grants. No GST
3. Jbkeeper subsidies (No GST)

Warning; Here are the penalties (attached law) which can apply for fraud or even reckless claiming of benefits :
Read page 40-41. On top of this a complicit or reckless tax agent may also be struck off or charged for criminal conduct.

We would stringly advocate the support of tax agent advice on these issues if you have any concerns or issues.

 

Important to remember that jobkeeper applies to
Individuals as sole traders operating a small business + partners in a partnership that is a small business
Trusts that dont pay salary and wages will not have entitlement to jobkeeper and cannot now correct their choice. Switching beneficiaries to salary is also covered. Dont even think about it.

Jobkeeper penalies for fraud and reckless claiming are shown (attachment) on pages 40-41 of the law passed last night. On top of that TPB sanctions and criminal charges are issues for advisers

 

Wrong. You cant claim what wasnt paid to a employee. That is an offence. You must re-engage them and pay them a complying amount of $1500+ per fortnight then get reimbursed aftre making a declaration and application. Your declaration to the Commissioner would be false. The penalties may include any or all of these : repayment with a 75% penalty, jail, fines and criminal conviction whether intentional or reckless.

 

I think I'm missing a full stop somewhere in that paragraph, that wasn't at all what I meant.

What I meant was, to do right be the guys I have to pay them a minimum of $1500 per fortnight from now to do nothing, in the hope that we'll qualify for that to be re-reimbursed (though our actual income hasn't dropped yet). If we don't qualify for this period, I have paid them out of my pocket to do nothing essentially.

OR

We stand them down unpaid now until such a point we qualify, then the government picks up the tab from that point on, but the guys are sitting home with zero pay until the point we officially get the nod that the government will start picking up that tab.

Essentially, I have a choice to either gamble my own funds and keep paying them now hoping we'll qaulify that will get reimbursed, or do the selfish thing and send them home unpaid until I know they'll be covered.

Hope that makes better sense?