The outbreak of the Corona virus has caused significant disruptions globally and the government has unleashed a number of economic packages to support businesses in managing their short to medium term cash flow challenges.
The first package was announced on 12 March 2020, the second on 22 March 2020 and on 30 March 2020 the third package was announced. The total of these three packages came to $320 billion. The question everyone is asking is “how can I benefit from these measures”?
For employers and business owners, the biggest support is undoubtedly the Cash Flow Boost and the Jobkeeper payments.
Cash Flow Boost
The initial announcement made on 12 March 2020 was that employers would receive 50% of PAYG withheld; the amount was capped at $25,000 with a minimum payment of $2,000. Ten days later, it was announced that employers would be receiving 100% of PAYG withheld; the amount was capped at $100,000 with a minimum payment of $20,000.
The Cash Flow Boost will be delivered to eligible employers in two equal amounts (the First Cash Flow Boost and the Second Cash Flow Boost) as credits to their relevant activity statements; each instalment will be a minimum of $10,000 and capped at $50,000 of PAYG withheld over the period 31 March 2020 to 30 September 2020.
Who is eligible?
An employer will be eligible for the First Cash Flow Boost if it:
- Is a PAYG withholder;
- Is a small or medium sized business for the most recent year of tax assessment;
- Had an ABN on 12 March 2020 and was “active”* on that day;
- Provides notification to the ATO by way of lodging activity statements; and
- Did not engage in a scheme for the sole or dominant purpose to benefit from the boost
* Meaning of “active” business
An employer will be active it:
- It derives assessable income from a business carried on in the 2019 income year and has lodged its 2019 tax return by 12 March 2020*; or
- It has made one or more supplies from carrying on an enterprise connected with Australia between 1 July 2018 and 31 March 2020 and has lodged the relevant activity statements by 12 March
* The ATO has announced that it will accept lodgements after this date if a lodgement deferral has been granted (they consider that automatic lodgement extensions provided for entities with tax agents will be valid lodgement deferrals for Cash Flow Boost purposes).
Contact the office on 08 9321 4974 to book a free consultation to discuss Cash Flow Boost and how we can assist you to get these payments.