Temporary cash flow boosts will support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19.
Eligible businesses and not-for-profit (NFP) organisations who employ staff will receive between $20,000 to $100,000 in cash flow boost amounts by lodging their activity statements up to the month or quarter of September 2020.
The cash flow boosts will be delivered as credits in the activity statement system. They will generally be equivalent to the amount withheld from wages paid to employees for each monthly or quarterly period from March to June 2020. In practice, this means you keep the amounts you have withheld from payments for these periods. However, there are some exceptions.
An additional cash flow boost is applied when you lodge activity statements for each monthly or quarterly period from June to September 2020. These credits are equal to the total boosts credited for March to June 2020. They will be paid out in either two or four instalments depending on your reporting cycle.
What you need to know
- On 24 March 2021, the Full Federal Court (FFC) handed down its decision in Federal Commissioner of Taxation v Apted [2021] FCAFC 45 – for more information, see FFC decision JobKeeper and backdated ABNs.
- For most businesses, the cash flow boost will automatically be credited to your account when you lodge your activity statement.
- You must be eligible for the initial cash flow boost, in order to be eligible for the additional cash flow boosts.
- The cash flow boost will be applied to reduce liabilities arising from the same activity statement – if there is credit remaining after this occurs, you will generally receive a refund of that amount.
- If you are due to receive a refund, we will generally pay it within 14 days.
- Any cash flow boost amounts you receive are non-assessable non-exempt (NANE) income and should be reported in the same way as you report other NANE income when lodging your tax return – see Tax consequences.
Eligibility
Businesses (including sole traders, companies, partnerships or trusts) and NFP organisations will be eligible to receive the cash flow boost if:
- you are a small or medium business entity or NFP of equivalent size (that is, an entity with aggregated annual turnover less than $50 million)
- you held an Australian business number (ABN) on 12 March 2020
-
- made payments to employees subject to withholding (even if the amount you were required to withhold was zero), such as
- salary and wages
- director fees
- eligible retirement or termination payments
- compensation payments
- voluntary withholding from payments to contractors
- were required to pay an amount in relation to alienated personal services income you received (even if the amount you were required to pay was zero)you either
- a 2019 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.on or before 12 March 2020, you lodged at least one of
- There are only exceptional circumstances where we may have discretion to give you further time after 12 March 2020.
- made payments to employees subject to withholding (even if the amount you were required to withhold was zero), such as
You won’t be disadvantaged if you have been given a deferral for your earlier activity statement or are not required to lodge your tax return yet. Read more about the impact of lodgment deferrals.
You are not eligible for the cash flow boosts if you change the way you operate for the sole or dominant purpose of becoming entitled to cash flow boosts when you would otherwise not be entitled. Read more about schemes.
