Key questions about NSW COVID-19 - 13 August 2021 - Chartered ...
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Key questions about
NSW COVID-19
assistance
–––––––
13 August 20211
Accessing Service NSW
I can’t get through to Service NSW, The most common complaint has been about the long waiting times, and
call times are long, phones drop phones dropping out when calls are made to Service NSW. CA ANZ has been
out advocating for guidance to be published urgently on common issues so that
phone calls do not need to be made. We’ve also requested dedicated phone
lines and an online portal for accountants, tax agents and BAS agents.
Changes have been made to CA ANZ has also been advocating for better notification and visibility of
Service NSW website: how do I changes to material available on the Service NSW website.
find out what they are?
Where is the toolkit Service NSW The ToolKit can be found here.
refers to?
Owners of micro businesses
Is a director an employee? Not under common law, which is the definition used in 2.1 T&Cs JobSaver, 2.1
T&Cs Business Grants. A director is an office holder.
However, a director may also have an employment contract with the company
and be an employee because of that contractual relationship. The employment
relationship should be documented and verifiable (e.g. via Single Touch Payroll
and an employment contract) through a payment which is not a director's fee.
That evidence would need to show that the director was an employee as at 13
July 2021 – 2.1 T&Cs JobSaver and 3.3(f) T&Cs Microgrants.
Can a director of a non-employing No access to JobSaver. Refer 3.4 Guidelines and 3.5(d) T&Cs (Jobsaver)
company get COVID Disaster
Payment (because of reduced No access to Micro Grant. Refer 3.2 Guidelines and 3.5 T&Cs (Micro Grant)
hours for his or her job with a 3rd
party or their own company) and
obtain NSW business support for
the company?
Can a director of an employing Yes. Refer 3.1 Guidelines and 3.4 T&Cs (Jobsaver)
company get COVID Disaster
Payment (because of reduced Yes. Refer 3.3 Guidelines and 3.6 T&Cs (Micro Grant)
hours for his or her job with a 3rd
party) and obtain NSW business
support for the company?
Can a director of an employing Only if the director is an employee of the company. See response to the
company get COVID Disaster question above about whether a director is an employee of the company.
Payment (because of reduced
hours for running the company)
and obtain NSW business support
for the company?
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.2
Eligible expenses
Payment of staff - Do employees No. There are no requirements that employees have to be paid to access the
need to be paid for a business to be grants or that the grants are to be paid to employees. The grants are designed
eligible to get the 40% Jobsaver to defray eligible expenses, which include wages.
amount? Do employees need to be
paid with the Micro Grant?
Are sole trader "drawings" A sole trader cannot be an employee of himself or herself. CA ANZ has raised
classified as eligible expenses? this issue with Service NSW. No response has been received as yet. CA ANZ
recognises that this issue is of extreme importance to a large number of
members.
Over what time period do the COVID Business Grant expenses need to be incurred from 1 June to 17 July
expenses need to be incurred? 2021 (cl 1.1 & 2 T&Cs)
Micro Business Grant expenses need to be incurred from 26 June 2021 (cl 1.1
T&Cs). No end date is specified. This may be due to the programme being
open ended – 1.1 T&Cs says the micro grants operate until the programme
ends.
At a Service NSW webinar on 9 August 2021 the NSW Treasury made it clear
that the grants received can be used for future business expenses.
What happens if the grant is more Re: the micro grant – the unused portion can be clawed back by the
than my expenses? government.
4.1(c) T&Cs of the MicroBusiness Grant states that a condition of the grant is
that the business " uses the payments to cover Eligible Expenses incurred since
1 July 2021”. 6.1 T&Cs states that If a business or not-for-profit organisation
has received a payment under the Program and DCS, Service NSW and/or
NSW Treasury is satisfied that the conditions in clause 4.1 were, or have been,
contravened, the payment or part of the payment may be recovered from the
business by the Crown as debt due to the Crown, pursuant to section 5.7(3) of
the GSF Act"
When considering a business's eligible expenses take note of meaning of
incurred at paragraph 9 of TR97/7.
However, at a Service NSW webinar on 9 August 2021 the NSW Treasury
stated that the government does not expect to claw back the expenses.
Re: JobSaver – The newly updated frequently asked questions for JobSaver
state that “While JobSaver payments can be used to cover general business
costs, the primary objective of this payment is to help businesses to survive,
maintain relationships with their employees and be in a position to trade when
restrictions are lifted.”
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.3
Decline in Turnover – accounting method and
charities
Cash v accruals: which method Service NSW has issued a toolkit which states that "if your business accounts
should be used? for GST on an accrual basis, you should use this method. If your business
accounts for GST on a cash basis, you should use this method."
I use the cash basis but I need to The decline in turnover period has been extended to 28 August 2021 for micro
refund amounts, will there be grants and JobSaver – see JobSaver common questions and 3.1 Guidelines
special rules? Microbusiness (note that terms and conditions for both grant types have been
updated for the change announced on 28 July 2021 and the JobSaver
guidelines have not been updated). It is expected that this will allow such
businesses to qualify later.
CA ANZ is asking Service NSW how this will apply to regions such as
Newcastle, New England and Bryon Bay who have entered longer lock downs
at a later point in time.
I use the cash basis but my invoices See the above answer.
relate to earlier periods. My
decline in work won’t be reflected
until later periods. Will there be
special rules?
Charities: are government grants, CA ANZ has raised this issue with Service NSW. No response has been
JobKeeper and reimbursement received as yet.
Income included in turnover?
Decline in turnover for new businesses, growing
businesses, drought etc
There are a variety of circumstances when comparing a business’s decline in turnover from 2021 to 2109 is not
appropriate. This has been recognized by Service NSW and the guidelines for Jobsaver and MicroGrant were
changed and as at 10 August 2021, the comparison periods have now been expanded to allow comparison between:
the same period in 2019, or
the same period in 2020, or
the 2-week period immediately before lockdown commenced (11 June to 25 June 2021)
This applies for all businesses, not just new businesses or businesses that have special circumstances such as
restructures, affected by natural disasters.
New businesses: how will Service See above commentary. When approaching Service NSW about these issues, it
NSW treat them? may be useful to refer to JobKeeper guidance material on new business.
Note that businesses must have been operating before 1 June 2021 to access
support per JobSaver common questions.
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.4
Note that businesses must have been operating before 1 January 2021 to access
support per Micro Grant common questions and have been registered for GST
on or before 1 June 2021 per Micro Grant common questions.
Growing businesses See above commentary. When approaching Service NSW about these issues
NSW it may be useful to argue your client's case by reference to guidance
issued in relation to JobKeeper regarding growing businesses
Changing business Businesses that have added business lines, changed the type of business they
are undertaking, or undergone restructures may have difficulty meeting the
decline in turnover
See above commentary. When approaching Service NSW about these issues it
may be useful to refer to the following JobKeeper guidance material Business
acquisitions/disposals
Changing business structure During a Service NSW webinar on 9 August 2021 for accountants, it was stated
that a change in business structure (e.g. change from a sole trader to a
corporate structure) would not affect a business’s entitlement to a grant
provided it could show that the business had continued, CA ANZ is calling for
this to be documented.
When approaching Service NSW about these issues it may be useful to refer to
the following JobKeeper guidance material Business restructure
Decline in turnover: service entities
Service entities: What happens During a Service NSW webinar on 9 August 2021 for accountants, it was stated
when the decline in turnover is in that Service NSW expects the employing entity should have a decline in
an entity that is different to the turnover due to the reduced use of employees. The employing entity can then
entity that holds the employees? apply for JobSaver. During JobKeeper, the ATO accepted that COVID could
trigger arm’s length reductions in the amount paid by the operating entity to
the service entity, reducing the latter’s turnover.
Decline in aggregated and GST turnover:
consolidated groups
Consolidated groups: how is During a Service NSW webinar on 9 August 2021 for accountants, it was stated
aggregated turnover calculated? that ATO concepts for aggregated turnover were relevant and that ‘National’
aggregated turnover is meant to refer to aggregated turnover as defined by the
tax legislation rather than limiting the aggregated turnover to Australian
operations. CA ANZ has asked for documentation of this statement.
Consolidated groups: how is a During a Service NSW webinar on 9 August 2021 for accountants, it was stated
decline in turnover over that when calculating decline in turnover you use GST concepts which operate
calculated? on a stand-alone entity basis.
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.5
Partnerships
It appears possible for partners to access the COVID Disaster Payment and for their partnership business to access
NSW business support in certain scenarios.
The main safeguard is that NSW business support is not available to a non-employing business if a person associated
with the business (i.e. a partner), and who derives income from it, received a Commonwealth COVID-19 Disaster
Payment.
No access to JobSaver. Refer 3.4 Guidelinesand 3.5(d) T&Cs (Jobsaver)
No access to Micro Grant. Refer 3.2 Guidelines and 3.5 T&Cs (Micro Grant)
It is unclear when the income should have been derived (i.e, a non-employing partnership business in lockdown may
not be currently deriving any income at all).
There is no such safeguard for a partnership which is an employing business. Indeed, the JobSaver Common
Questions state that “If you have employees, they can still receive the Commonwealth COVID-19 disaster payment if
[your business is] receiving JobSaver.”
2-Week Period
Period length: can it be greater Service NSW toolkit states that "a business will be able to use the full three-
than 2 weeks? week period to show the decline in turnover"
Which two-week periods do you CA ANZ has raised this issue with Service NSW. No response has been
measure? Is it the "lowest received as yet.
fortnight turnover"?
It is noted that the online application form in the early stage of the rollout
required the lowest fortnight turnover.
Significantly impacted by public health orders
What evidence is required to prove During the Service NSW webinar for accountants on 9 August 2021, the NSW
the decline in turnover and Treasury official was at pains to distinguish the decline in turnover due to
expenses incurred have been public health orders from a decline due to seasonality – e.g. a farmer whose
significantly impacted by public crop matures at a slightly different time.
health orders?
Members should form a view on whether the decline in turnover is due to
COVID restrictions (and not other factors) as part of their deliberations before
signing the accountants letter based on the material provided to the accountant
by the applicants. It may be useful to refer to PCG2020/40 - schemes in
relation to the JobKeeper payment
The Accountant’s letter template emphasizes the reliance placed on the
information provided by the applicant that they satisfy the 30% decline in
turnover requirement. It is strongly recommended that the accountant
document this information and in particular, check that the client has
verifiable data connecting the decline to the COVID restrictions.
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.6
Headcount
Annual leave, stand downs, unpaid No. The eligibility section of the micro grants frequently asked questions states
leave, reducing staff hours: do they that "Employees who have been stood down under the Fair Work Act 2009 or
affect headcount? take leave without pay are considered employees for the purpose of
headcount.”
Exclusions
In the list of ineligible entities, CA ANZ has raised this issue with Service NSW. No response has been
what’s the Service NSW approach received as yet.
in terms of the percentage of
income to classify an entity as one It is noted that the dictionary meaning of “primarily” is " in the first place;
which ‘primarily earns passive chiefly; principally".
income’
Accountants letter
Can a sole practitioner accountant At a Service NSW webinar for accountants on 9 August 2021, a NSW Treasury
with no professional employees official said that an independent accountant must be engaged to sign the letter.
sign the accountant’s letter The sole practitioner could not do so.
declaring that his or her practice
has suffered a decline in turnover?
Can a multi partner accounting At a Service NSW webinar for accountants on 9 August 2021 a NSW Treasury
practice have one of its partners official said that this was acceptable
sign the accountant’s letter
declaring that the practice has
suffered a decline in turnover?
Common questions asked are: CA ANZ has produced resources regarding the accountants letter - see here.
Can I sign for: T&Cs of all grants define Independent practitioner as an "Accountant, tax
agent or BAS agent…who is not: (a) an employee or director of the applicant;
my spouses' company if I (b) an associated entity of the applicant; or (c) a director or employee of an
am a shareholder? associated entity of the applicant."
family businesses?
What about my cousin's
business?
What is the risk associated with
signing this letter?
Do I need to charge to be covered
by personal indemnity insurance?
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.7
How can an Accountant apply on Your accountant can apply on behalf of your business. Your accountant will
behalf of a business? need to provide a letter of authority from you to show that they are authorised
to act on behalf of your business if they are not listed as an associate on the
Australian Business Register. See JobSsaver common questions
ABNs
Can an entity with multiple ABNs No per 2.4 of the Eligibility Criteria for 2021 Covid-19 business grant –
but no employees obtain multiple Guidelines
grants? (i.e. one grant per ABN?)
No per 3.5(c) Covid 19- Jobsaver payment Terms & Conditions
No per Microbusiness under Frequently asked questions - applying for the
grant
Can an entity with multiple ABNs Yes for JobSaver – “Individuals with multiple businesses with more than one
and employees obtain multiple employee, you may submit one application per AB” per Jobsaver common
grants? (i.e. one grant per ABN?) questions.
The situation for microgrants is unclear as it is not mentioned.
Disclaimer:
This Q&A document has been prepared for use by members of Chartered Accountants Australia
and New Zealand (CA ANZ) in Australia only. It is not intended for use by any person who is
not a CA ANZ member and/or does not have appropriate expertise in the Q&As subject matter.
This Guide is intended to provide general information only and is not intended to provide or
substitute legal or professional advice on a specific matter. Laws, practices and regulations may
have changed since publication of this Guide. You should make your own inquiries as to the
currency of relevant laws, practices and regulations. No warranty is given as to the correctness of
the information contained in this Q&A, or of its suitability for use by you. To the fullest extent
permitted by law, CA ANZ is not liable for any statement or opinion, or for any error or
omission contained in this Guide and disclaims all warranties with regard to the information
contained in it, including, without limitation, all implied warranties of merchantability and
fitness for a particular purpose. CA ANZ is not liable for any direct, indirect, special or
consequential losses or damages of any kind, or loss of profit, loss or corruption of data, business
interruption or indirect costs, arising out of or in connection with the use of this publication or
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without express prior written permission from CA ANZ.
© 2018 Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.You can also read
