In some very welcome news for business owners, the New South Wales and Commonwealth governments have announced a new support package for businesses impacted by the current Greater Sydney lockdown.
Faced with the uncertainty of shifting restrictions, this is an incredibly challenging time for small business owners. And these latest measures intend to ease some of the financial and emotional pressures that can snowball while lockdowns are in place. To help you work out what to do next, and when you’ll start to see payments, we’ve unpacked the latest information below.
As this is a new grant (not an extension of JobKeeper), details and specifics will become clearer in the coming days. We’ll be sure to update you as we learn more.
What kind of support will be available?
Small businesses could receive one of three payments depending on their size and operations.
- The first is a one-off grant payment of between $1,500 and $15,000. The amount you could be paid comes down to demonstrating a decline in turnover of at least 30 percent across a minimum fortnightly period of any interval between 26 June to 26 July. This must be compared to the same period in 2019.
According to the NSW Government, the payment amount you could receive is outlined as:
- $15,000 for a 70 percent or more decline in turnover
- $10,500 for a 50 to 69 percent decline in turnover
- $7,500 for a 30 to 49 percent decline in turnover.
- Next, is the weekly cash flow support payment. Eligible small businesses will receive between $1,500 to $10,000 per week to cover payroll expenses. More details will be announced regarding this support measure within the next few days.It’s important to remember that these payments are designed to cover business expenses like rent, utilities, and wages while restrictions are in place. This means that business owners who receive a grant will be required to keep full-time, part-time and long-term casual staff on their books.
- And finally, for those without employees – including micro-businesses and sole traders with an annual turnover between $35,000 and $75,000 – you could qualify for a weekly payment of up to $1,500 later in July.
Where should I start?
The first step is to register your interest with Service NSW today if you intend to claim any of the three payments announced by the NSW government. This means the state government will send you guidance and instructions as soon as applications open on 19 July, and beyond. Don’t forget to check with the Australian Business Register to ensure your business and contact details are correct. And do the same with your MyServiceNSW Account (or create one if you haven’t already).
The next step is to get in touch with your accountant or BAS agent to let them know you intend to claim. To apply for a COVID-19 business grant, you’ll need them to provide a letter outlining your decline in turnover, proving that your business qualifies. And the more notice you can provide, the better prepared they’ll be to help you.
Together with your advisor, you’ll be able to draw on your 2019 business records using your Xero account to calculate a decline in turnover percentage. It’s also worth noting that school holiday dates (which were different in 2019 and 2021) will likely impact this data, particularly for small businesses affected by seasonal trading periods.
Lastly, make sure your books are in good shape. The 14-day turnover decline period applies until 26 July, meaning you’ll want to do daily reconciliations to ensure you can track your numbers right up to this cut-off date.
When will the grants be paid?
From 23 July, the Commonwealth and NSW governments will start making payments to eligible businesses. Your best chance of receiving the support sooner rather than later is to submit your application on 19 July.
Is there any other help available?
Payroll tax waivers of 25 percent will be available for businesses with wages between $1.2 to $10 million that have experienced a decline in turnover of at least 30 percent. Additionally, COVID-19 business grants will be tax-exempt.
As well as financial assistance, the NSW and Commonwealth governments are committing over $17 million to a state-wide mental health support package. This will provide a boost to services like Lifeline and Sonder – both of which offer free, round-the-clock counselling.
For wellbeing support that’s tailored to small business owners and employers, there’s also Beyond Blue’s NewAccess service for free mental health coaching and the Ahead for Business wellbeing plan for managing stress.
As we learn more about the COVID-19 business grants, we’ll be sure to keep you updated. In the meantime, head to Xero’s Business continuity hub for more resources and guidance on how to support your business during this challenging period, and keep an eye on the NSW government website for more information.
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