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Applications for a one-off, tax-free grant of up to $15,000 are now open to NSW businesses, with accountants to play a key role in satisfying eligibility requirements.
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Accountants relied on heavily as NSW opens COVID-19 grant program
19 July 2021
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The 2021 COVID-19 business grant will be open to NSW businesses who have less than $10 million in total wages at 1 July 2020 and aggregated annual turnover between $75,000 and $50 million for the year ended 30 June 2020.
The grant program will be administered by Service NSW, and businesses must prove they have suffered a decline in turnover over a minimum two-week period from 26 June 2021 to 26 July 2021 compared with the same period in 2019.
Those who have experienced a decline of 70 per cent or more will be provided with the full $15,000 grant, while those with a 50 per cent decline will receive $10,500, and those with a 30 per cent decline can expect $7,500.
As part of the eligibility requirements, a letter from a business’s qualified accountant, registered tax agent or registered BAS agent will need to be provided to Service NSW, verifying the appropriate decline in turnover.
Service NSW has published a template accountant’s letter and notes that it will be relied on in future audits.
Chartered Accountants Australia and New Zealand tax leader Michael Croker said accountants will now be under pressure to digest the new information and work with new rules set by Service NSW.
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“The NSW grant is act of grace payment under the state law, meaning there is no proscriptive legislation like there was with JobKeeper,” said Mr Croker.
“While the NSW government has embraced some of the technical jargon used when JobKeeper was rolled out in 2020, the main difference is that NSW agencies and not the ATO will regulate the support program.
“This is also state-based, not national, so cross-border businesses may need to demonstrate they are physically located and operating in NSW.”
Likewise, the Institute of Public Accountants’ general manager of technical policy, Tony Greco, believes accountants will need to be prepared for a different experience under Service NSW.
“While the eligibility criteria use some well-established tax concepts, there will be many scenarios where eligibility will be at someone’s discretion, as the rules are less than clear, as opposed to JobKeeper which was quite refined in comparison as it had a longer gestation period,” said Mr Greco.
“Unlike JobKeeper, the accounting profession has not been widely consulted this time round in the compensation framework, so we are told to roll with the punches and do our bit by dropping tools to help clients access survival money.”
JobSaver rules inbound
Applications for the new cash flow boost payment — coined “JobSaver” — will open from 26 July, with eligibility requirements expected to be published this week.
Announced by Prime Minister Scott Morrison last week, the JobSaver initiative will provide businesses between $1,000 and $10,000 a week to help them retain employees.
Eligible businesses must have an annual turnover between $75,000 and $50 million and demonstrate a 30 per cent decline in turnover compared with an equivalent two-week period in 2019.
Micro-businesses with a turnover between $30,000 and $75,000 can also expect support of up to $1,500 per fortnight. Eligibility requirements will be provided this week, with applications to open in late July.
Details on the 2021 COVID-19 business grant and template accountant letter can be accessed here.
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