Businesses were not ready for a complete JobKeeper cut off, say tax agents and accountants

The majority of Tax & Super Australia (TSA) members agree with JobKeeper being extended in some form, with a significant number reporting that up to half of their business clients on JobKeeper are still experiencing a 30% decline in turnover.

The results are from a TSA member survey, which captured the responses of more than 480 tax and accounting professionals. Nearly all (99%) of respondents had at least one business client that received JobKeeper.

The survey showed some businesses were struggling to return to normal turnover levels.  The highest proportion of respondents (38%) said that between 25% and 50% of their business clients on JobKeeper were still experiencing a 30% decline in turnover, followed by 31% who said up to a quarter of their clients were still experiencing a turnover shortfall.

When asked what proportion of their business clients could have kept operating or remained financially viable without JobKeeper, most (38%) said less than a quarter could have, followed by 24% who said between a quarter and half of their business clients could have stayed afloat without it. Only 11% responded that most (75% to 100%) of their business clients could have kept operating or remained financially viable without JobKeeper.

Members reported that Victoria’s second lockdown (for metro Melbourne and Mitchell Shire) would negatively affect their business clients. A total of 42% of respondents said they had business clients who would be affected either because they operated in that area or dealt with other businesses in that area.

Looking ahead, the majority (84%) agree with JobKeeper being extended in some way (and this has now been announced). However, nearly half believed there were some industries that could come off JobKeeper.

Respondents listed some of these industries as potentially being: medical and dental; building and construction; legal, advisory, accounting and professional services; primary producers, resources and agriculture; food services; and cleaning and building services.

TSA tax counsel John Jeffreys said that JobKeeper has been an essential support for TSA members’ business, partnership and sole practitioner clients. “The fairly broad approach to eligibility, despite some challenges in determining the turnover test, meant that large cross sections of business could access it reasonably quickly,” he says.

“But as our members have pointed out, there are many caveats to consider. For example, the hairdresser who can operate as normal but has fewer bookings due to restrictions on events, such as weddings. Or the suburban café owner who is doing better than their CBD-based counterpart because of people working from home.”

“There is an unprecedented and complex need for support, and this is made more difficult as the situation continues to evolve,” he says.

“One thing is certain; tax and accounting professionals have been crucial to helping individuals and businesses to navigate and access the Federal Government’s stimulus package.”

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TSA has created a COVID-19 Essentials page that provides crucial information and practical updates to help members, businesses and the broader tax community to navigate their way through the stimulus packages. https://www.taxandsuperaustralia.com.au/TSA/Resources/COVID-19_Essentials/TSA/Resources/COVID-19_Essentials.aspx

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