Strategies and advice for businesses to stay in control through COVID-19 and get ahead of the pack

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COVID-19 Business Continuity – 4th May

I’m here with the COVID-19 business continuity update for Monday 4th May.

In today’s update:
1. JobKeeper: don’t miss out
2. JobKeeper: more clarifications for growing businesses + example
3. Calculating turnover: evidence for JobKeeper eligibility
4. When you will get your JobKeeper payments
5. Key dates

 

1. JobKeeper: don’t let your business miss out

Over the weekend there were further clarifications on how to apply the alternative tests for JobKeeper. The updates are particularly useful for businesses that have experienced strong growth over the last year because it now means that even more of you are eligible for JobKeeper.
With this new clarification, I estimate that around 90% of Tenfold clients are going to receive significant financial support.

Don’t miss out on money that you could be entitled to. If you haven’t had your coach run your revenue figures through our modelling, I urge you to do it as a priority.

I know it can be complex and time consuming to absorb all the information about JobKeeper, especially as the updates keep coming. I know that many accountants are struggling to keep up, too. As coaches, we have been speaking with accountants and helping them understand how our clients are eligible. There have been a number of cases where we showed a client how they are eligible when they had thought they wouldn’t be.

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2. Clarification on the alternative test for increase in turnover

The purpose of this test is to allow entry to JobKeeper for businesses that had been on a growth trajectory before the COVID-19 crisis struck. Without this test, growing businesses would fail the basic test and would NOT be eligible for JobKeeper.

This is the test that applies to many Tenfold clients because their revenue has increased during coaching. Other businesses that have not experienced significant revenue growth are allowed to use the basic test, which is an easier entry point.

There are two parts to this alternative test:
The first part is to assess if your revenue was increasing pre-COVID-19. If so, it means you’re allowed to use this test.
The second part is to assess if your revenue is likely to decline by 30%. If so, it means you’re eligible for JobKeeper payments.

Part 1: Assessing the growth in revenue pre-COVID-19
Let me provide an example of how it could be applied: if you think you might be eligible for JobKeeper for the month of April, use this alternative test.

Start by looking at your revenue for the month of March.
Compare March’s revenue against the revenue for the month of December 2019.

Is your March revenue 12.5% greater (or more) than your December revenue? If yes, then you pass the first part of the test.

It means you are entitled to use this alternative test instead of the basic test.
(If March isn’t 12.5% higher than December, there are other growth rates and comparison periods you can use – see the excerpt below).

Part 2: Assessing the decline in revenue
To be eligible for entry into JobKeeper, your business must have (or is likely to have) a 30% fall in turnover compared to the comparison period.

For the purposes of this test, the comparison period is the average of your revenue over the January-March period. (Revenue of January + February + March divided by 3).

Is your April revenue 30% less than the average of the 3 months revenue from January to March? If yes, then you’re eligible for JobKeeper from April onwards.

See this example:
JobKeeper turnover increased - graph

This is one example of how you could apply the alternative test, but there are many different combinations that will allow growing businesses to qualify for JobKeeper. Speak to us before the 8th May deadline.

Here is the excerpt from the ATO on the rules for applying this test:

JobKeeper entity’s turnover substantially increased:

JobKeeper entity’s turnover substantially increased

 

 

 

 

 

 

JobKeeper entity’s turnover substantially increased example:

JobKeeper entity’s turnover substantially increased example

 

 

 

 

 

 

JobKeeper entity’s turnover substantially increased – applying the test:

JobKeeper entity’s turnover substantially increased - apply test

And here’s the link to the ATO website: JobKeeper Alternative Test – Increasing Turnover 

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3. Calculating turnover: evidence for JobKeeper eligibility

For the purposes of calculating your turnover to self-assess your eligibility for JobKeeper, the ATO will allow you to predict your likely sales.

The ATO doesn’t require you to know exactly what your turnover will be; however, they do require you to make a reasonable estimate and keep a record of it.

Tenfold is taking a conservative approach and we’re helping clients to document their thinking and the calculations they’re using. If you haven’t already done so, email your coach and this can form part of your evidence trail. If you have already, please continue to do so.

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4. When you will get your JobKeeper payments

Unfortunately, there’s still no firm date from the ATO on when JobKeeper payments will start flowing to businesses. This excerpt from the ATO is the best information available at the moment:

JobKeeper when employers will get paid:

JobKeeper when employers will get paid

What it means is that the sooner you take action, the sooner you’ll get paid.

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5. Key dates for JobKeeper

Please see the key dates below. The most important date at the moment is Friday 8th May, which is when you need to have paid any eligible employees the $1500 fortnightly payment (including any top ups).

JobKeeper key dates
See the ATO website here: JobKeeper key dates

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Here’s to a good week ahead.

Ash

Ashley Thomson B.Eng(Hons), Grad. Dip. Mgmt, MEI
Managing Director
Tenfold Business Coaching

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