To apply for a COVID-19 business support grants and financial assistance, you’ll need to demonstrate a loss of turnover for specific time frames on a comparative basis. We’ve put together a handy guide to calculating turnover to see if your business may be eligible.
In the ongoing impacts relating to COVID-19 on small businesses, state governments have been hard at work to provide financial support for individuals and businesses impacted by the disruptions. We have previously covered those available to WA small businesses.
Unlike JobKeeper, some of these grants are delivered by state-run services, and not the ATO directly.
However, businesses will still need to prove eligibility, and in many cases that comes down to having a clear indication of regular cashflow in order to demonstrate a decline in turnover during this time.
Calculating turnover for eligibility
Many businesses regularly report turnover as part of their BAS and GST reporting obligations with the ATO. If you’re not, then you’ll be relying on the accuracy of your bookkeeping to keep a record of business transactions.
Here are the key things to keep in mind when calculating your turnover before applying for a government grant.
1. The reference period and equivalent period for comparison
Understanding the reference period for which you’ll be comparing your turnover is critical to determining your eligibility. Due to the nature of lockdown restrictions in different states, there will be different time periods set according to each grant that you must be aware of.
These then need to be compared against relevant reporting periods from an earlier timeframe as stipulated by the corresponding grant, to accurately determine reduction related to COVID-19 impacts.
2. The Reporting method
Generally speaking, unless the grant you’re applying for has stipulated a specific reporting method to qualify, you should be reporting your decline in turnover with the same method you would report turnover to the ATO (either the cash or accrual method).
3. Percentage declined vs comparative period
Another key factor of determining if you’re eligible for financial support is by ascertaining exactly how much your revenue needs to have declined between the time periods compared.
Grants currently on offer for businesses across the country can stipulate a requirement of a decline of between 30 and 70 percent over a specified period. You may also need to be able to show that in black and white financial data if you want to prove eligibility.
State-by-state support packages
The nature and scale of support on offer is variable and each is now offered on a state-by-state basis, rather than a federal basis, as is the case with JobKeeper. It is essential to understand what’s on offer by keeping an eye on the relevant government website for your location, the application methods and key dates. Information can be found on the relevant state small business websites:
- NSW: Grants, loans and financial assistance
- Victoria: COVID-19 grants and support
- Queensland: 2021 COVID-19 business support
- WA: Small business lockdown assistance grant
- SA: Financial support for SA businesses
- Tasmania: COVID-19 business support, grants and loans
- ACT: COVID-19 economic support for business
- NT: Business grants and funding
Ready to get started?
The most important thing you can do in this process is reach out to a trusted advisor who knows your business.
If you have any questions about the information above please contact the team at Abbotts, we will be happy to assist you. You can find details to get in touch with us on our contact us page.
