Current as of 16 April 2020
Volume 143 | April 2020
Jobkeeper – The tricks involved in the Turnover Test
After reviewing the new legislation in relation to the JobKeeper incentive we have become aware of some uncertainty in relation to the turnover test and how businesses are able to access the incentive. It is important that you understand what is, and isn’t, included in the calculation of turnover and whether it has decreased by the required 30% or 50%, depending on the size of your business. In particular, the article looks at how certain turnover is treated and how related party transactions are handled. Please click on this link to go to the full article.
The COVID–19 crisis has led to businesses having a significant decrease in their turnover, with some businesses even being forced to temporarily close their doors. This has led to the problem of tenants not being able to meet their commercial rent commitments. With landlords relying on this rent to meet their own mortgage commitments, they are also faced with the flow on effect of this financial dilemma.
To try to manage this situation the Prime Minister, Scott Morrison, has announced a mandatory Code of Conduct to impose good faith leasing principles between landlords and tenants of commercial tenancies. The Code is to be effective from 3 April 2020, once it is enacted by way of legislation, and is applicable where the tenant is eligible for the Government’s JobKeeper program and has an annual turnover of less than $50 million.
While the Code is effective from 3 April 2020, landlords and tenants alike will have to assume that the legislation will pass as is. The Code is an attempt to share the pain of the crisis between the landlord and tenant.
Whether you are a tenant or landlord, there are things to be considered when attempting to negotiate rent relief in the above circumstances. The attached article covers all the things that you should consider. Click here to read full article.
JobKeeper Payment – Your Questions answered
We’ve been fielding many questions about the JobKeeper Payment since it was announced on 30 March. Our newsletter on 31 March (link is here) outlined the announcement and how it was intended to apply. The scheme was passed into law just before Easter with the detailed rules and explanatory statement becoming available over the Easter break, so information is now available to answer most questions.
There has been uncertainty, especially in relation to when employees had to be paid by, to be able to access the $1,500 / fortnight JobKeeper payment for April. Also access to the incentive by sole traders and business owners is discussed. There is access to information to show you the whole process on how to claim the incentive to make sure you do not miss any requirements or reporting date. Please click here to see the full article.
How we can help at a time like this!
We, at Stanley & Williamson, want you to know that we are here to help you if needed, during these stressful times. The COVID-19 crisis has taken business by complete surprise and has made existing plans and budgets obsolete. To ensure your business survives it is imperative that proper planning is put in place to take into account the new business environment. The centrepiece of this planning has to be a new review of your budgets and cashflow forecasting, especially over the next 6 months, to take into account what has happened. It will be different for every business.
Cash is king at the moment and all businesses should keep a close eye on their cashflow to ensure they can survive the difficult times ahead.
With this in mind we have tools available to you that will help you measure and monitor cashflow. Our team is ready to help you to put budgets and forecasts together that can help you monitor your situation over the coming months.
If you are using Xero, Quickbooks or MYOB live we have tools that can easily integrate with these software packages to put together financial models and forecasts. You will be able to compare different scenarios including comparing your current situation to any worst case scenarios. This will allow you to understand what the worst case scenario will look like in relation to cash, revenue, costs and profitability. It will put you in a position to make the hard decisions now, to ensure your survival.
Only the businesses that are well planned, with cash available to meet all commitments, will still be standing at the end of this crisis.
You may already have the capability internally to attend to these needs. If you don’t then we can help if needed. Don’t hesitate to contact your client manager to discuss any needs you may have.
To give you an idea of what can be done, below is a link to a short video of one of the tools we use that can quickly put together a forecast.
Call us if you need our help.
This newsletter has been produced by Stanley & Williamson as a service to its clients and associates. The information contained in the newsletter is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this newsletter, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under Professional Standards legislation.