2021 COVID-19 Business Support
Simplifying the 2021 COVID-19 Business Support for new businesses!
I often speak with new business owners and am noticing a lot of confusion still exists about who is eligible to receive the 2021 COVID-19 Business Grant and the JobSaver payment (‘the Grants’). I find that the confusion arises because of the requirement that to be eligible for the Grants, the business must have had an aggregated annual turnover greater than $75,000 for the financial year ended 30 June 2020 (‘FY20’).
However, per the 2021 COVID-19 Business Support guidelines, Service NSW lists some alternative circumstances where a business may not meet the eligibility criteria but may still be eligible for the grant. One of these circumstances includes businesses not operating for the entire 12 months of FY20 e.g. new businesses.
The online application process at the onset did not specifically cater for new businesses and you or your accountant would’ve had to speak to a Service NSW representative (a near impossible task) to find out how to successfully lodge your application. As more time has passed, the application process has since been updated to cater for the applications from new businesses and this blog post is going to show you how to successfully navigate the refreshed online applications.
Answering the ‘Turnover’ question
During the application process, the first roadblock you’re going to face is answering the question regarding whether your business had a turnover of greater than $75,000 during FY20. As a new business, you would not have met the requirement therefore, you’re just going to select the ‘No’ option to the following question:
After selecting ‘No’ a new question will appear. This question asks about the alternative circumstances that has applied to your business. Select the first answer ‘Businesses that commenced after June 2019’ to notify Service NSW that you’re operating a new business:
Calculating decline in turnover
To be eligible for the Grants, you must be able to prove that your business experienced a decline in turnover of 30% or more due to the Public Health Order (PHO) over a minimum two week period from 26 June 2021 to 17 July 2021 compared to:
- The same period in 2020
- The two week period immediately before the Greater Sydney lockdown commenced (12 June to 25 June 2021).
For a new business, you’re likely to calculate your decline in turnover comparing to the two week period immediately before the Greater Sydney lockdown commenced (12 June to 25 June 2021).
What you need to support your application
You will still be required to provide evidence that your business turnover was greater than $75,000 for the financial year ended 30 June 2021 (‘FY21’) or capable of reaching turnover of $75,000 on a prorated basis.
If your new business has been able to reach a turnover of greater than $75,000 in FY21, you will be able to provide the following documents in your application to prove your eligibility for the Grants:
- Provide your Business Activity Statements (‘BAS’) submitted to the Australian Taxation Office (‘ATO’) during FY21
- If this has already been completed, the 2020-21 income tax return for the business
- Ask your accountant to provide a profit and loss statement from the accounting system
- An accountant’s letter
For newer businesses that have not been trading throughout FY21 and did not reach $75k turnover, you will need to prove that your business was able to reach $75k on a prorated basis in the form of a forecast. Please refer to the example below:
Chipper Carpentry Services Pty Ltd (‘Chipper’) was registered and began trading on 1 January 2021. For the six months to 30 June 2021, Chipper’s turnover was $50,000. On a prorated basis, Chipper’s forecasted turnover for FY21 is $100,000 ($50,000 / 6 months * 12 months).
Such a forecast will need to be provided in an accountant’s letter.
For details regarding the 2021 COVID-19 Business Grant and the JobSaver payment, please refer to our previous blogs here
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