The Australian Government is providing temporary cash flow support to small and medium business and not-for-profit organisations that employ staff during the economic downturn associated with COVID-19. This will be done through two sets of cash flow boosts delivered from 28 April 2020 to support employers to retain employees.
The tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses will be delivered through credits in the activity statement system when eligible businesses lodge their activity statements. If the credits leave the eligible business in a credit position, the business can have that credit refunded.
Businesses will be eligible to receive the cash flow boost provided they are a small or medium business entity, including not-for-profit organisations, sole traders, partnership, companies or trusts, 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); and
- made eligible payments that the business is required to withhold from, even if the amount required to be withheld from is zero (such as salary and wages, director fees, voluntary withholding payments to contractors, etc.)
- derived business income in the 2018-19 income year and lodged its 2019 tax return on or before 12 March 2020 OR 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.
The initial cash flow boosts will be delivered as credits in the activity statement system from 28 April 2020. If a business lodges early, it will not receive the cash flow boost before this date.
If a business lodges:
- quarterly, it will be eligible to receive the credit for Quarter 3 (March 2020) and Quarter 4 (June 2020).
- monthly, it will be eligible to receive the credit for the lodgement periods of March, April, May and June 2020.