Cash Flow Boost 1 (March 2020 to June 2020 Business Activity Statements)
Providing employers with an aggregated annual turnover below $50m, a tax-free payment equal to 100% of Pay As You Go (PAYG) amounts withheld, with a minimum payment of $10,000 and a cap of $50,000 to be delivered as a credit upon lodgment of the employer's activity statements with the ATO from 28 April 2020. The payment will generally be made on lodgement of the activity statement notifying the Commissioner of their withholding liabilities for the period and can be provided as a credit against tax liabilities. Please note this boost is there to incentivise employers to retain as many staff as possible. Cash Flow Boost 2 (June 2020 to September 2020 Business Activity Statements) The second cash flow boost payments will be payable in equal instalments. The amount will be equal to the amount of the Cash Flow Boost 1. We now have clarity from the bill on some of the areas that were being questioned. The bill has the following clauses/paragraphs: Entities are eligible to receive the first cash flow boost for a period if: - the entity makes a payment that is subject to withholding obligations under Subdivisions 12-B, 12-C or 12-D (broadly, a payment of wages or salary or similar remuneration), whether or not any amount is actually withheld, in the period; either:
- the entity was a small or medium business entity, or a charity or other not-for-profit entity of equivalent size, for the most recent income year of the entity for which an assessment of income tax has been made by the Commissioner; or
- the Commissioner is reasonably satisfied that it is likely that the entity is a small or medium business entity, or a charity or other not-for-profit entity of equivalent size, for the income year that includes the period;
- the entity has notified the Commissioner of their entitlement in the approved form; - the period is one of the following: – the quarters ending in March 2020 or June 2020; and – the months of March 2020, April 2020, May 2020 or June 2020; - if the entity is not an Australian Charities and Not-for-profits Commission registered charity, it both:
- held an ABN on 12 March 2020; and
- either derived assessable income from carrying on a business in the 2018-19 income year or made one or more supplies for consideration in the course of an enterprise it carried on within Australia in tax periods commencing after 1 July 2018 and ending before 12 March 2020 and notice of the income or supplies was held by the Commissioner on or before 12 March 2020 or within such further time as the Commissioner allows; and
- the entity (or an associate or agent of an entity) has not engaged in a scheme for the sole or dominant purpose of seeking to make the entity entitled to the first cash flow boost or increase the entitlement of the entity to the first cash flow boost. The Cash Flow Boost Bill also provides for the Commissioner to make the second cash flow boost payments upon lodgement of activity statements for periods from June to September 2020 to entities that were entitled to the first cash flow boost.