The federal government has been rolling out a series of measures to support businesses and the economy during the current Coronavirus crisis. One such measure is a cash flow boost for businesses that pay wages.

If you currently withhold tax from salary and wages you may be eligible to participate in the stimulus package. The cash flow boost provides businesses with a minimum $20,000 boost up to a maximum of $100,000.

To be eligible for this payment you need to be a small or medium business who held an ABN at 12 March 2020 with an aggregated turnover under $50 million. To determine if your turnover is under the threshold the tax office will either refer to your 2019 tax return if lodged by the 12 March 2020 or if you have not lodged your return then tax office will refer to your business activity statements lodged from 1 July 2018 to 12 March 2020.

As well as meeting the above conditions you also need to have made one or more of the following eligible payments during the period:

  • Salary and wages
  • Director fees
  • Eligible retirement or termination payments
  • Compensation payments
  • Voluntary withholding from payment to contactors

The cash flow boost will be delivered as credits on your business activity statements and if resulting in a refund will be refunded to your account within 14 days. Note for the March BAS the credit will not be applied until at least 28 April 2020.

The cash flow boost will be paid in two “boosts.” The first boost paid will be dependent on if you are a quarterly or monthly lodger. If you are a quarterly lodger, your boost paid will be 100% of PAYG withheld as reported on your March 2020 BAS and June 2020 BAS with a minimum credit of $10,000 and a maximum of $50,000. For monthly lodgers the boost paid will be 300% of the March 2020 BAS and then 100% of the April 2020, May 2020 and June 2020 BASs with a minimum credit of $10,000 and a maximum of $50,000.

The second boost paid will be equal to whatever amount you got from the first boost. It will be split between your BASs lodged from June 2020 to September 2020. Quarterly BAS lodgers will receive 50% of the total initial cash flow boosts on lodgement of each of the June 2020 and September 2020 BASs. Monthly BAS lodgers will receive 25% of the total initial cash flow boosts on lodgement of each of the June 2020, July 2020, August 2020 and September 2020 BASs.

For further details regarding the boost or to calculate your possible entitlement please contact FAJ on 9335 5211 or contact Jess on the email below.

Author: Jessica Russell