There are technical questions that arise, for the NSW Covid lockdown relief (and for other States & Territories, with their equivalent benefits) – things like ‘aggregate annual turnover’; ‘decline in turnover’; ‘maintain employee headcount on 13.7.21’; ‘NSW weekly payroll’ and ‘total annual Australian wages’. There is guidance on this and it’s improving – but it’s still patchy and has inconsistencies. The following article covers some of this.

See below for further details.

[Tax Month – July 2021]



Businesses apply for financial support by using or creating their own MyServiceNSW account. Much to the chagrin of accountants, there is no ‘portal’ to apply for the support measures in their capacity as an agent acting on behalf of a business client.

The common questions arising relate to the following concepts:

  • Aggregated annual turnover — uses the income tax concept, as defined in s 328-115 of the Income Tax Assessment Act 1997 (Cth). The grouping rules relating to entities connected with the business and affiliates of the business apply. The toolkit provided by the NSW Government states that: ‘Aggregated annual turnover means the annual Australian turnover of your business as well as the annual Australian turnover of any business that is “connected with you” or any business that is your “affiliate” for the year ended 30 June 2020.’
  • (Decline in) turnover — uses the GST concept, as defined in s 188-10 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Service NSW has now clarified that: ‘Decline in turnover will be measured based on the GST turnover of your business. As such, if your business accounts for GST on an accrual basis, you should use this method. If your business accounts for GST on a cash basis, you should use this method.’
  • Maintain employee headcount on 13 July 2021 — means the employer will not take active steps to end the employment relationship with their employees. Employees who have been stood down under the Fair Work Act 2009 (Cth), take leave without pay or reduce their working hours are considered employees for the purpose of the headcount. Increasing the headcount without ending any employment relationship will not result in a business becoming ineligible. Further, the 13 July 2021 headcount is not taken to be reduced if the reduction in a business’ employee headcount results from circumstances outside the control of the employer, such as voluntary resignation or death.
  • NSW weekly payroll — based on the amount reported at W1 on the most recent bus9iness activity statement (BAS) provided to the ATO prior to 26 June 2021 for 2020–21, that relates to employees who usually worked, or were based, in NSW during the relevant BAS period. This relies on what is reported at W1 on the BAS, so it excludes amounts paid to contractors under a voluntary withholding arrangement. Questions have arisen regarding entities that report their PAYG withholding monthly via an instalment activity statement (IAS) but report their GST quarterly on a BAS.
  • Total annual Australian wages — relies on the Revenue NSW meaning under the Payroll Tax Act 2007 (NSW), which includes certain contractors. However, the term ‘employee’ has the same meaning as its ordinary or common law meaning, which excludes contractors.

As the above observations point out, there are currently inconsistencies and a lack of guidance on some key aspects of the measures.

[TaxVine, 28, 30/7/21]


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