The Government is providing temporary cash flow support to small and medium businesses and not-for-profit organisations that employ staff during the economic downturn associated with the coronavirus.
The Boosting cash flow for employers measure will be done through two sets of cash flow boosts delivered from 28 April 2020 to support employers to retain employees.
Through the Australian Taxation Office (ATO), the Government will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses, delivered through credits in the activity statement system, when eligible businesses lodge their activity statements.
You will be eligible to receive the cash flow boost if you are a small or medium business entity, including not-for-profit organisations, sole traders, partnership, company or trust that:
- held an ABN on 12 March 2020 and continues to be active
- has an aggregated annual turnover under $50 million (generally based on prior year turnover)
- made eligible payments you are required to withhold from (even if the amount you need to withhold is zero)
Eligible payments include:
- salary and wages
- director fees
- eligible retirement or termination payments
- compensation payments
- voluntary withholding from payments to contractors
In addition, you must also have either:
- derived business income in the 2018–19 income year and lodged your 2019 tax return on or before 12 March 2020
- made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020
Initial cash flow boost
The initial cash flow boosts will be delivered as credits in the activity statement system from the Government’s announced date of 28 April 2020. If you lodge early, you will not receive the cash flow boost before this date.
If you lodge:
quarterly, you will be eligible to receive the credit for
- quarter 3, March 2020 (lodgment due date 28 April 2020)
- quarter 4, June 2020 (lodgment due date 28 July 2020)
monthly, you will be eligible to receive the credit for the lodgment periods of
- March 2020 (lodgment due date 21 April 2020)
- April 2020 (lodgment due date 21 May 2020)
- May 2020 (lodgment due date 21 June 2020)
- June 2020 (lodgment due date 21 July 2020)
Additional cash flow boost
Eligible entities who received initial cash flow boosts will receive additional cash flow boosts, for the periods June to September 2020, equal to the total amount of initial cash flow boosts received. This will be delivered in either two or four instalments depending on your reporting period.
How to apply
You don’t need to apply, the cash flow boost is a tax free payment to employers and is automatically calculated by the Australian Taxation Office (ATO). There are no new forms required.