Following the lodgement of March’s activity statements, companies will now start to receive tax free cash flow boosts delivered through the Australian Tax Office (ATO) as credits in the activity statement system. For many small and medium sized businesses, this will be a lifeline while they battle to keep afloat due to the economic impact of Covid-19.

These cash boosts will be between $20,000 and $100,000 to eligible businesses. The amount will generally equate to the amount withheld from wages paid employees from March to June (monthly or quarterly). A second cash flow boost will be delivered when activity statements are lodged for the period of June to September. These credits will be equal to the total boost credits from March to June 2020. It is automatically calculated by the ATO, so it will be credited to your account when you lodge your activity statement.

The key eligibility requirement is that businesses must have been an active employer from 12 March 2020. This includes having an Australian Business Number (ABN), and the business has lodged on or before 12 March 2020 at least one of the following:

  • a 2018–19 income tax return showing that you had an amount included in your assessable income in relation to you carrying on a business
  • an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that you made a taxable, GST-free or input-taxed sale

The business must also have made payments to employee’s subject to withholding, and the aggregated annual turnover is less than $50 million based on the previous year’s turnover (18/19). This will all be calculated by the ATO, so you must make sure you are up to date with lodging your BAS and 2019 tax returns.

There are slightly different calculations depending on whether you lodge monthly or quarterly, so for more information to help you understand how it works and also the lodgement deadline dates, click here

The amounts you receive do not need to be paid back when your cash flow improves.

If you have any questions about this, please email them through to Chloe admin@taxproaustralia.com.au and one of our Taxpro accountants will be in touch.