Applicants that have recently acquired an existing business
If a business was acquired after 17 July 2021 it may have been eligible to apply for RSP for the 22 October, 5 November and 19 November periods and the Transition Payment on 10 December.
The new owner could use the revenue that the business earned during a typical 7 day period in the 6 weeks before 17 August 2021 when calculating a revenue drop if:
- The business or organisation had been in operation for at least a month prior to 17 August 2021 and
- You’re running the same sort of business as run by the previous owner. For example - you acquired a café and kept running it as a café.
The revenue earned by the business could have been the previous owners or yours – depending on when you started running the business (see below for some examples). You’ll need to keep the figures as evidence in case we ask to see them.
When does ownership change?
We’ll consider that you acquired the business at the time that you have:
- entered a binding contract to purchase the business and
- taken over operating the business.
What is a same sort of business?
The nature and character of the business or organisation hasn’t substantially changed where the same or substantially similar assets, activities, and operations are used in generating business income.
Example: New owner started running the business on 5 August
A business changed ownership on 31 July and the new owners started running it from 5 August. As the business changed ownership after 17 July the new owner can use a 7 day period after 5 August and before 17 August to calculate their revenue drop or revenue earned by the previous owners before 5 August. The new owners choose to use their own income.
Revenue in the 7 days between 5 August to 11 August = $10,000
Revenue in the 7 days between 22 October to 28 October = $2000
Revenue drop = 80%
Example: New owner acquired the business on 7 September
A business changed ownership on 7 September and the new owners started running it from 9 September. As the business was acquired after 17 August, the new owners will need to use the previous owner’s income to calculate a revenue drop.
Previous owner’s revenue in the 7 days between 2 August to 8 August = $6000
New owner’s revenue between 8 November to 14 November = $1000
Revenue drop = 84%
A business changed ownership on 31 July and the new owners started running it from 5 August. As the business changed ownership after 17 July the new owner can use a 7 day period after 5 August and before 17 August to calculate their revenue drop or revenue earned by the previous owners before 5 August. The new owners choose to use their own income.
Revenue in the 7 days between 5 August to 11 August = $10,000
Revenue in the 7 days between 22 October to 28 October = $2000
Revenue drop = 80%
A business changed ownership on 7 September and the new owners started running it from 9 September. As the business was acquired after 17 August the new owners will need to use the previous owner’s income to calculate a revenue drop.
Previous owner’s revenue in the 7 days between 2 August to 8 August = $6000
New owner’s revenue between 8 November to 14 November = $1000
Revenue drop = 84%