COVID 19 Survival Assistance for SMEs Number 2

Greetings, 

This week the Australian Taxation Office has released rules relative to the calculation of alternative decline in turnover for the JobKeeper payments and confirmation has been issued on JobKeeper payments that can be claimed for people other than employees.

• Business owners actively engaged in their business in the form of a sole trader, company, trust or partnership can also qualify for the JobKeeper payments where a business owner (as shareholder, adult beneficiary or partner) is actively engaged in the business, or a director is actively engaged in the business. This is limited to one entitlement for each entity, even if there are multiple business owners or participants.
  
  The qualification is that the business must have had a 30% fall in turnover when comparing a month or three-month period in 2020 with 2019.

• Registration for the JobKeeper Payment Scheme can continue until 31st May 2020 to claim wages payments to employees paid from 30th March 2020. However, to claim the full benefit for the month of April the wage payments need to have been paid to the employee by 30th April 2020.
• The Taxation Commissioner has released a “Legislative Instrument” which identifies 7 Tests that the Taxation Office will use, as alternative tests, to determine the decline in turnover if a straight comparison with 2019 is not possible.

The statement from the Taxation Office indicates that “the Commissioner cannot determine an alternate decline in turnover test in all circumstances”.

The Alternative Decline in Turnover Tests have been identified by the Tax Department as:

• Test Number 1 - Business commenced
• Test Number 2 - Business acquisition or disposal that changed the entity's turnover
• Test Number 3 - Business restructure that changed the entity's turnover
• Test Number 4 - Business had substantial increase in turnover
• Test Number 5 - Business affected by drought or natural disaster
• Test Number 6 - Business has an irregular turnover
• Test Number 7 - Sole trader or small partnership with sickness, injury or leave

Last week’s presenters in COVID-19 Survival Panel for SMEs, Paul Barnaby, Australasian Representative for Plan Guru and a prescriptive accounting consultant and Jordan Lowry, Managing Director of Blackstone Business Group, human resources consulting had some great advice for small businesses and medium-sized operators, including:
Paul Barnaby:

• "You need to know where your cash is going".
• "Predictive accounting is simply predicting into the future what your financial statements will look like".
• "There was never a bigger need for strategic plans and budgets for businesses then there is now".
• "If you have a plan you will be more successful in business".
• "We now have to plan for the downturn".

Jordan Lowry:

• "Your team is usually the most valuable asset in your business".
• "If you operate a trucking business or a taxi service you know that it’s important to have maintenance undertaken on those vehicles – the same is true with your staff and one way that you can supply maintenance is through 'culture' ”.
• "I think culture is one of the most exciting sides of human resources".
• "Business managers need to exhibit leadership skills to lead their team so as to enhance their business' performance".
• "Team members need information, especially in the current very difficult times".
• "Business people need to be the 'chief morale booster' as a leader in their businesses".
• "Business leaders can assist in the development of a strong culture by communicating with the team – including dropping in on a Zoom meeting to communicate with team members when many of them are working from home".

The next COVID-19 Survival Panel for SMEs webinar is being presented on Wednesday, 29th April 2020 at 12-noon AEST. You can register for this free webinar by clicking here. The keynote presenters are:

Priscilla Bea Smith

Tax Agent, Senior Accountant, Partner of Cloud Nine Associates – conducts training courses for bookkeepers and for people who wish to be accredited as tax agents.

Geoff Goodrich

An experienced business person who is also the Ambassador for a major business promotional organisation in the Northern Territory.

These two presenters will deliver a commentary from both an accountant’s point of view and from a business person’s point of view on the issues confronting all businesses in Australia from the challenges of COVID-19 coronavirus.

I would like to invite you to visit the ESS Small Business' website - Survival in Difficult Times - Learn More which includes all of the material we have produced to assist small businesses and medium-sized enterprises to combat the challenges of COVID-19.

We have prepared a more detailed summary of the key issues relative to the contents of this edition of Empowering SMEs. You can obtain this complimentary detailed summary - “Want To Know More” by clicking here. I also invite you to view the “Empowering SMEs” video which gives you more details on the key issues that we have discussed in this edition – to access please click here.

Stay safe. If you want to have a discussion, please don’t hesitate to contact us. If you have a friend or a colleague who you think might find this article interesting please forward it to them.