Australian Newsagency Blog

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Accountants are not always right

Mark Fletcher
May 11th, 2020 · 13 Comments

  • A newsagent in Tasmania was told by their accountant that they would not qualify for a state government COVID-19 grant. On urging from others, they applied and now have the grant money in their account.
  • Four newsagents in Victoria were told by their respective accountants that they would not qualify for the state government’s $10,000 COVID-19 grant. Thankfully, each followed advice from colleagues, applied and now have $10,000 in their bank account.
  • Six newsagents I know, who do not know each other, were told by their respective accountants that they did not qualify for JobKeeper. On the advice of others, they applied and were accepted. 4 of the 6 have received their first payment.

These are examples of three types of government assistance where the advice of accountants was not right. There are plenty of other examples.

I feel for accountants. It has been challenging to be across the extraordinary changes over the last two months and to be across the extraordinary detail of some of the COVID-19 programs.

My advice to any small business retailer is to get a second opinion. If you are not sure, apply anyway and let the grant or payment provider determine your eligibility.

Just last week the ATO made it clear that in relation to JobKeeper the criteria is not black and white. The ATO has the right to look at a specific business situation with flexibility. There are examples of them doing that, especially where a business may not be at the 30% in revenue decline.

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Category: Social responsibility

13 responses so far ↓

  • 1 glenn // May 11, 2020 at 3:55 PM

    My daughter is an accountant, and their firm is tearing their hair out trying to get the process of applying and eligibility for JK sorted. They don’t have the information from the ATO and are unfamiliar with the application process as they have not had to do it themselves. Very frustrating for lots of people.

    Best idea is to frequent the community forums like what MYOB have, ask questions in there, talk to others that have been through the process and work with your accountant rather than rely on them for total guidance. The MYOB community forum has been my saviour through this process.

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  • 2 Mark Fletcher // May 11, 2020 at 3:59 PM

    I urge people to only rely on advice from the ATO. I have found it to be accurate and timely. Since they are managing the system, it’s better to get answers direct.

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  • 3 glenn // May 11, 2020 at 5:17 PM

    It was through those forums I got the links to the relevant ATO documents. At the time finding the info on the ATO website was difficult. There was a whole range of very useful information, not only on how to apply with links to relevant ATO documents, but also how to setup your accounting software and make it work in practice.

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  • 4 Graeme Day // May 11, 2020 at 6:08 PM

    I subscribe to ATO’s SME newsletter which is emailed to me regulary, every time there are changes, which can be weekly etc.
    They brought me up to date with due process re COVID 19 and who gets what for what. there is a return enquiry avaliable as well.
    maybe it it’s worth a look at for those that are in the dark.
    I found them extremely helpful and the enclosed material easy to understand.

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  • 5 Mark Fletcher // May 11, 2020 at 7:16 PM

    From the outset, the ATO website has had the details, the forms and the FAQs. While I get that Xero and MYOB can best advise execution, I have seen several times that their advice as to deadline dates and somme other details were not as up to date as they could be, in a rapidly changing situation.

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  • 6 Steve // May 11, 2020 at 8:28 PM

    Sorry Mark whilst I agree with most of your advice and in particular your strategies concerning improvements to our GPS, as a Chartered Accountant of over 30 years public practice experience I have got to disagree with you here.

    Whilst I do reluctantly acknowledge that yes sometimes accountants do get it wrong it is important to recognise that there are some specific GST turnover definitions here that may make or break a newsagency’s eligibility for JobKeeper. You will not get this advice from an ATO call centre employee or from the likes of MYOB.

    A good accountant will know & understand your business & will have made contact with you to advise & discuss JobKeeper eligibility & funding employee JobKeeper payments before you called them. They will have referred you to the ATO fact sheets. Importantly they will know the GST agency rules and their implication to newsagencies & JobKeeper eligibility. They will also know your business structure and how to maximise payments for business owners not on the payroll.

    Yes they will know the JobKeeper alternative turnover tests but they will also know the limited legislated use thereof. They will advise and assist you with rental negotiations and in some cases in obtaining state assistance grants if applicable. Sorry you cannot obtain all of this advice from the ATO or from a website and no you will not wait 2 hours on the phone to speak to a call centre employee.

    It is now more important than ever for you to seek advice from your trusted professional advisor. Some state grants are providing funding specifically for this purpose.

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  • 7 Mark Fletcher // May 11, 2020 at 8:52 PM

    Steve all I am doing is relaying situations with which I have had direct involvement, where accountants advised retailers they would not get state government grants or would not get Job Keeper, where the retailers were actually successful.

    My core message is that they can be wrong, as we all can be from time to time. Check and re check. Second opinions can be key.

    Not all accountants are good.

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  • 8 jason // May 16, 2020 at 7:07 AM

    Makes sense, ask your accountant for advice, reject advice, apply for the grant, get paid the grant and decide that’s enough to declare that the accountants advice is wrong, and the owners were right. Of course, the urgent nature of the covid measures meant it was critical to have businesses able to apply for and access the funds simply and quickly with relaxed compliance checking than usually happens.

    When they submit their BAS and full year return after the support package has ended and they own the money to the ATO I assume that will once again be the accountants problem too…

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  • 9 Mark Fletcher // May 16, 2020 at 10:01 AM

    Jason a ton of incorrect assumptions there.

    The state government grant criteria and the JobKeeper criteria evolved. Keeping on top was challenging for anyone, which is why a black and white no was problematic.

    Accountants are not saints. My post says they are not always right.

    Don’t read anything into it more than that.

    Since I wrote the post, more newsagents have contacted me saying they have received assistance when told they would not be eligible.

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  • 10 Steve // May 16, 2020 at 11:37 AM

    Mark I think Jason is simply trying to make the point that the payment of both JobKeeper and the state support grants are based on self-assessment. Payments will undoubtedly be subject to future audit activity. The state grants in particular are restrictive on the expenditure of any such funds.

    Practicing accountants are subject mandatory professional indemnity insurance and continuing professional education requirements. Much of this CPE is currently focused on the government support packages. As you say by all means question and understand the advice your accountant provides but be careful of swimming outside the flags.

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  • 11 Mark Fletcher // May 16, 2020 at 11:41 AM

    Steve, I get it that accountants and friends of accountants depend the profession.

    It’s odd, though. All I have said is here are some real examples and that accountants are not always right. Both statements are trie.

    Jason says: Makes sense, ask your accountant for advice, reject advice, apply for the grant, get paid the grant and decide that’s enough to declare that the accountants advice is wrong, and the owners were right.

    What happened happened.

    The ATO itself, at senior executive level and publicly has said that the rules are flexible, open to interpretation.n There are businesses that are 26% down and the ATO has determined they are okay for JobKeeper. In 2 of those cases the accountant said do not apply.

    The advice in my post is valid: My advice to any small business retailer is to get a second opinion. If you are not sure, apply anyway and let the grant or payment provider determine your eligibility.

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  • 12 Steve // May 16, 2020 at 11:50 AM

    To further illustrate the importance of seeking professional advice I am aware of one small business owner who upon reading and digesting the ATO fact sheets incorrectly self assessed themselves as being ineligible for the June quarter JobKeeper payments.

    A half hour consultation with their long standing trusted accountant quickly determined that they had indeed qualified based on their April turnover With 10 employees that was a $100,000 telephone call for this business owner. They will remain eligible for a further $100,000 in the next quarter.

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  • 13 Mark Fletcher // May 16, 2020 at 11:51 AM

    Steve, I am sure there are plenty of terrific stories of accountants helping small business owners. That does not mean all accountants are always right.

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