COVID-19 is putting serious financial pressure on Australian businesses, so it is crucial to know what government support is available to help support your business.
The Government announced on 12 March 2020 that the new Boosting Cash Flow for Employers measure will be increased to provide up to $100,000 for eligible small and medium-sized businesses.
Employers will receive a payment equal to 100% of their salary and wages withheld, up from the original 50%, with maximum payments being increased from $25,000 to $50,000. Minimum payments have also been increased from $2,000 to $10,000.
Businesses do not have to apply for the cash flow boost. Payments will be received from 28 April 2020 from the ATO as an automatic credit in the business activity statement (BAS) system upon lodging eligible upcoming activity statements. Lodgement and payment of your BAS still needs to be done by the due date as you will not receive the cash flow support until doing so. The credit will be three times the rate in the March 2020 activity statement for monthly lodgers, to equal the credit received by quarterly lodgers.
To be eligible, employers must have been established prior to 12 March 2020, have an aggregated annual turnover of less than $50 million and employ workers.
An additional payment will be provided to eligible businesses during July – October 2020. This payment will be equal to the total amount initial received under the Boosting Cash Flow for Businesses scheme. For monthly
and quarterly activity statement lodgers, these payments will be provided as automatic credit in the activity statement system for each lodgement up until October 2020.
Businesses with current tax debts and payment arrangements in place will need to be mindful of how exactly the Government support package will affect them. The cash flow support will be provided automatically by the ATO to the integrated client account of the business.
If this payment results in a credit, a refund of the balance will be paid automatically, generally within 14 days. Businesses with an existing tax debt or balance on their account may receive none or only part of the refund, depending on their balance.
A business will not be eligible for cash flow boosts if it has altered its practices for the purpose of becoming eligible for cash flow boosts when it would otherwise not be eligible, or for the purpose of increasing the amount of cash flow boosts they receive. This may include increasing employee wages for a particular month in order to receive a higher cash flow support payment. The ATO may undertake
an investigation if any sudden changes to the characterisation of payments are made.
If you have any questions about the information above please contact the team at Abbotts, we will be happy to assist you. You can find details to get in touch with us on our contact us page.