The government recently passed legislation for a temporary cashflow boost, offering eligible small and medium businesses an initial and additional cash flow boost through the activity statement system.
A further update to the temporary cashflow boost announced by the Australian Taxation Office (ATO) means there is no differentiation between a business lodging their activity statement before or after 28 April 2020.
Cashflow boost credits were due to flow from 28 April however, the ATO may have begun issuing the payments already. Any excess credits will be refunded versus offsetting outstanding liabilities from previous months.
Eligible businesses and not for profits will receive a tax-free cashflow boost between $20,000 and $100,000 through credits when their activity statements are lodged with the ATO. Businesses must lodge their activity statement for PAYG withholding as normal. Businesses with larger withholdings must lodge the activity statement for other obligations (such as GST) as well.
Temporary cash boost eligibility criteria
Most businesses will be eligible to receive the cashflow boost if they:
- are a small or medium business entity or not for profit of equivalent size (with aggregated annual turnover less than $50 million)
- held an ABN on 12 March 2020
- made payments to employees, including withholding (even if the amount you withheld is zero), including:
- salary and wages
- director fees
- eligible retirement or termination payments
- compensation payments
- voluntary withholding from payments to contractors
- have lodged, on or before 12 March 2020, at least one of:
- a 2018–19 income tax return showing that you had an amount included in your assessable income in relation to you carrying on a business
- an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that you made a taxable, GST-free or input-taxed sale.
Under very exceptional circumstances, discretion may be given to provide a business with further time, after 12 March 2020, to:
- hold an ABN
- provide notice that business income or supplies were made.
A business is not eligible for the cash flow boosts if the business operations changed in order to be entitled to receive cashflow boosts.