Finance News
Update on JobKeeper and Victorian Grants
21 Sep 2020

With another week of lockdown behind us, Victorians are hoping there is an end in sight of these level 4 restrictions. For businesses in Victoria and around Australia, the focus has also been on the releases from the Federal and Victorian governments regarding relief measures in place.

The Federal Government passed legislation outlining the second phase of the JobKeeper payments. This legislation confirmed that the 30% drop in turnover that is required to pass the eligibility criteria will be based on actual GST turnover. This is a shift from the current scheme which allows businesses to assess their eligibility based on projected turnover figures.

The regulations state that businesses must compare their actual turnover from the September 2020 quarter to the corresponding quarter in 2019. In addition, for businesses registered for GST, the calculation of the turnover must be the same as their reporting method for GST. In essence, these businesses will calculate their turnover based on their Total Sales (Box G1) less GST on Sales (Box 1A). For businesses who are not registered for GST, they can choose either cash or accruals to calculate their turnover but they must use this method moving forward for any future eligibility calculations – in effect, there turnover calculation is locked in. This may result in some harsh outcomes for many businesses where cash is still coming in from prior months’ sale but invoicing has stopped if they report their GST on a cash method.

Further guidance is still to be released by the ATO outlining alternate tests which may be available for businesses who do not pass the actual reduction in turnover test. We are hoping this will be made available next week to enable businesses and their advisors time to digest these options.

Finally, the next round of Victorian grants are about to be made open for applications and we urge businesses to check the website (www.business.gov.au). A reminder on a few of the broader and most relevant of these: –

  • There is a third round of Victorian Business Grants ranging from $10,000 to $20,000 depending on the size of the business’ payroll. Again the business must be an employer and be receiving JobKeeper.
  • There is a new grant of up to $3,000 available for sole traders who operate in a nominated industry and who lease a commercial premise.
  • There is a grant of up to $30,000 available for businesses of licensed premises. The grant size depends on the location and capacity of the venue (i.e. hotels, bars, restaurants, pubs).

If you have any queries, please do not hesitate to contact us.

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