The COVID-19 grants, which provide NSW businesses with tax-free payments of up to $15,000, had first launched on Sunday with a requirement to demonstrate a decline in turnover over a minimum two-week period from 26 June 2021 to 26 July 2021 compared with the same period in 2019.
However, by Tuesday, the date was changed to 26 June 2021 to 17 July 2021, with Service NSW failing to offer an explanation of the abrupt change.
The Institute of Public Accountants general manager of technical policy, Tony Greco, said the change would have a negative impact on industries, such as construction and retail, that had only been forced to shut down at 11.59pm on 17 July after the state government tightened its lockdown restrictions.
“It would have been courteous if we were formally advised of the change as key stakeholders, and the reason behind it perhaps,” said Mr Greco.
“[We are] extremely frustrated, as are most accountants trying to help clients navigate the rules or lack thereof.”
Service NSW has been contacted for comment but could not provide a response by time of publishing.
Tax & Super Australia tax specialist Neville Birthisel said Service NSW’s rules around the decline in turnover test had left some businesses in the lurch over their eligibility.
As it stands, Service NSW dictates that businesses must prove a decline in turnover compared with the same period in 2019. Those with alternative circumstances, including those who were not established in 2019 or were operating under unusual trading conditions in 2019, have been asked to contact the agency directly to ascertain their eligibility.
“Many of the grants have a turnover test component for eligibility, similar to that for JobKeeper eligibility,” said Mr Birthisel. “For JobKeeper, these concerns were addressed with the alternative decline in turnover tests legislative instrument. However, there is currently no such formal guidance for the NSW grants.
“[Contacting Service NSW] may be easier said than done. We know that helplines are congested and the website has crashed from the high volume of impacted individuals and businesses, as well as their tax agents and accountants, scrambling to understand what help is available.”
Mr Greco noted that accountant have also begun to question the definition of the decline in turnover test, reliving concerns over the cash versus accruals debate that surfaced at the height of the JobKeeper program last year.
Service NSW states that the “Australian Taxation Office goods and services tax (GST) concept will be applied when assessing whether an applicant experienced a 30 per cent or more decline in national turnover”.
“From what I can gather, they are saying how you report for tax is really the number,” said Mr Greco.
“It’s almost like JobKeeper 2.0 where you don’t have a choice between cash and accruals. You really have to be using how you report for tax, and I think they are trying to piggyback off that, but some people will say that might not serve me well.
“This is where Service NSW will be caught up in dealing with those sorts of questions because it is not their turf.
“There are all these nuances to the rules and having a state-based agency dealing with tax concepts and payroll tax will confuse everyone.
“There are going to be lots of scenarios where they will say come talk to us, and my question is, are they up for that conversation?”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.