Monthly Archives: August 2021

Welcome news for commercial landlords.

In light of the extension to the commercial rent relief scheme during the week by the state government, the following concessions were announced:-

  • Further Land Tax relief of up to 25% and

  • Small landlords suffering acute hardship can apply for payment sunder the Hardship Fund.

We welcome the opportunity to assist you with your claim.

Extended rental assistance for small businesses

During the week, the Victorian state government announced extended rent relief for small businesses.

Businesses can now choose any three consecutive months between 1st April to 30th September 2021 and compare that to the same period in 2019.

So should there be a fall in turnover of more than 30% then the rent is to be reduced accordingly.  This means say where there is a 60% fall in turnover, a small business owner can request the landlord to reduce the rent to 40%.  In other words, you as a small business owner won’t ever pay 30% of the rent with the other 30% deferred.

The scheme applies retrospectively from 28th July 2021 to 15th January 2022.

The sooner you make the request of your landlord, the more you stand to benefit.

We welcome the opportunity to discuss this with you even if just to work out whether you qualify.

Small Business Adaption Program extended

Good news in that Victorian Government’s Small Business Adaption Program has been extended.

The Small Business Adaption Program is a reimbursement scheme – you spend the money then get refunded $1,200 for 12 months access. 

Software providers haven’t exactly jumped at this scheme as only 14 have registered. 

But that said, there are key players on the list including:-

  • Service M8 (for tradies)

  • Shopify

  • Square

  • Squarespace

  • And accounting programs MYOB, QuickBooks Online, Reckon & Xero.

Key requirements are:-

  • Business must have been operating by 13th September 2019.

  • Your business doesn’t already use the program.

Sounds good?  If so get cracking as applications are taken until 5th December (or earlier if the allocated program funds are exhausted).

Want to know more –  click here.

Issues with qualifying for the Small Business Covid Hardship Grant

It should be straight forward. 

But it isn’t. 

Whether you qualify or not depends on which state government publication you read.

Let me explain why first before I set out how we plan to navigate conflicting government announcements.

The qualifying test is a 70% fall in turnover over a minimum two week period as compared to 2019 as measured by your GST turnover method.

Now the fun begins.

The Program Guidelines states that:-

  1. Select a … period where the impacted period…was most impacted by Covid.

  2. Select a … period as a comparison point.

  3. The comparison period for businesses should generally be the same time of year {it’s bad enough they use a vague word as should but adding generally is open to liberal interpretation}.

  4. And goes on to state that … unless there are exceptional reasons as to why a different time is chosen noting that slight adjustments for trading days are acceptable.  Exceptional reasons are not defined which probably helps more than hinders.

  5. With the overriding statement being that …as a direct consequence of Covid.

The application form contains statements such as:-

  1. You must identify a date range … in turnover compared to a similar date range in the benchmark period.

  2. You must choose similar dates for the benchmark period … unless there are exceptional reasons as to why a different period is chosen.

  3. If you choose a starting date in 2019 that is more than 3 days earlier than the starting date in 2019 ….  This makes sense as 27th May in 2019 was a Monday and a Thursday in 2021 – so it is simply a way to align the weeks. 

  4. It then goes on to state that … your application may require further information to substantiate the exceptional circumstances.

  5. With one of the attestations being … that the benchmark period selected is representative of normal business operations.

  6. Another attestation is that … as a direct consequence of Covid.

But when you get to the FAQ sheet (not that any questions had been asked by the time this was released early on the afternoon of Thursday 12th August as the program was nothing more than a name by noon on that day despite it being heralded some 3 weeks beforehand). 

The FAQs start clearly with a statement that:-

  1. As a direct consequence of Covid.

  2. But then goes on to state that … businesses should compare their best consecutive two week trading period … 2019 … with their worst consecutive … period … 2021.

  3. And then states later that … this two week period can be any two consecutive weeks within the benchmark period.  This cannot be read in isolation nor definitive given the comments in the guidelines that there must be exceptional circumstances.

It is all unnecessarily inconsistent.

So we are going to proceed as follows:-

  • We will first seek a period/periods of two weeks or longer where there is a drop in turnover in 2021 compared to the same period in 2019.  The test period is a minimum of two weeks but can be longer.  We have built a rolling spreadsheet to test for this.  If you satisfy this test, we will then seek your assurance that the decline is due to Covid and then proceed to application.

  • If you don’t pass this then we will seek a different comparative period where turnover was sufficiently high and then we will seek your assurance that the decline is due to Covid AND that exceptional circumstances exist before proceeding to application.

  • As most businesses will be assessed on a cash basis, you will need to form that opinion more on the pattern of customers paying you than when the invoices were raised.

Other points to note:-

  • It is a tougher test than for JobKeeper – under JobKeeper, it was assumed the fall in turnover was due to Covid.  With this, you have to justify your opinion as to why it is due to Covid.

  • There is no going back and claiming later.  If you are eligible and an application is not lodged by 10th September (or earlier if the allotted funds run out) then you miss out.

  • What we will be required to attest to and sign off on may well prove to be a very subjective matter.  As such, we will be assessing all turnover testing ourselves and in doing so running all clients through our assessment spreadsheet.  If you do appear to qualify then a separate fee will be levied for the application process.

  • All of this has added a couple of extra steps to the process but we will keep our prices the same as announced on Monday.

  • JobKeeper was an exception to what our preferred audit insurer covers as it does not cover grants such as this.

  • Please remember that one does not qualify for this grant if you have already received recent state industry specific government grants.

  • And please make sure your accounting file is up to date and the bank account reconciled. 

Small Business Covid Hardship Fund

The Victorian State Government has FINALLY opened AND released qualification details for the Small Business Covid Hardship Fund.

So all those who have missed out on the industry based grants may qualify for $8,000.

And given the test period being a two week comparative test, we expect to be surprised how many qualify.  Why?  Because it is assessed on one’s GST turnover – and for most that is cash. And what is the first that dries up when things get tough – cash.

That all said, there are still a number of qualifying criteria to satisfy.  It is also noteworthy that an approved declaration must be completed by a qualified accountant.

Want to know more – ask us.

Lockdown #6 – extended business covid support

In response to the snap lockdown announced on Thursday afternoon, the state government announced on Friday further covid support to businesses.

In short, those who have qualified for support in recent rounds will receive a further payment. 

There has however been slightly more detail released in respect of the Small Business Covid Hardship Fund (you will remember from our email during the week that in response to our enquiry to the government support line was that they had no idea and were waiting on further details themselves).  Business who do not qualify under other support grants (which are largely industry based) can receive $8,000 if their turnover has fallen by 70% or more.  We will post a further blog when sufficient details are to hand.

You will remember from our earlier posts and emails that the federal government is distributing a Covid-19 Disaster Payment.  An employee will now qualify to receive $750 if their hours of work have fallen by more than 20 hours per week; $450 if less than that.

We will post further blogs when sufficient details become available.

Update on extended Victorian Gov covid support

Further details have come to hand about the Victorian government’s extended covid lockdown support.  There are however a number of initiative extensions await clarification and/or legislation.

Commercial Tenancy Relief

  • We can now clarify that the extended system that will run to January 2022:-

  • At least half of any further rent reduction must be waived; no more than half of the rent reduction can be deferred.

  • From 28th July, landlords can only lock out tenants after receiving Victorian Small Business Council permission.

Licenced Hospitality Venue Fund

  • In order to qualify a business must have both a liquor licence and a food certificate.

We will post further details when they come to hand.

Re-instated commercial rent relief

On 28th July, the Victorian state government announced a re-introduction of a covid rent relief system for commercial tenancies.

A business must have suffered a 30% decline in turnover to qualify.  We are still awaiting legislation so it is not yet known what period is measured.

The rental relief is commensurate with the decline in turnover.  So as per the government’s example, if your business suffered a 40% decline in turnover, then you your business will be entitled to a 40% reduction in rent. 

Please contact us if you need help in quantifying this.

It is also unclear as to whether the rent reduction is in part a deferment.  We will post an update when details come to hand.

Where a landlord doesn’t agree to provide the requested rent deduction then the matter can be referred to Victorian Small Business Commission.

To support landlords who have suffer from their decline in income, assistance can be received under a $80 million Landlord Business Support Package.  One would think that allocation will be quickly exhausted so we would recommend applications being made properly.