Is eligibility for the Coronavirus cashflow payment dependent on me continuing to trade, or recommencing trade after the crisis has passed?
No. Despite language to the contrary used by Treasury and the ATO, the Coronavirus cashflow boost payment is not confined only to ‘active’ businesses.
The Coronavirus cashflow payment is available to entities satisfying the turnover requirement that also:
- had an ABN on 12 March; AND
- that either:
- derived assessable business income in 2018-19;
- OR made at least one sale of goods and services between 1 July 2018 and 12 March 2020.
There is no requirement to continue trading.
Keep in mind however that, given that the amount of the first cashflow boost is pegged to the amount you withhold from salary and wages (and/or other withholding payments) in the months to June 2020, the total amount of the payment will depend on the extent to which you continue to make such payments up until 30 June 2020.
Even less activity is required to get the second cash flow boost (an amount equal to the first boost, payable after the end of the 2019-20 income year) as your entitlement to it is essentially automatic if you received the first cash flow boost. All you need to do is to continue to lodge your BASs up until and including September 2020.
Illustration: Sally operates a restaurant business. Prior to restrictions placed on her trading activities by the Government as a result of the Coronavirus crisis, her business was very successful, and she employed over 50 staff. However, due to the Government imposed restrictions she had little choice but to close her doors and terminate the employment of most of her staff.
Over the coming months (April through to June 2020) Sally pays out the annual leave and other entitlements of her terminated staff, and therefore continues to be required to lodge BASs for those months in order to report and pay the amounts withheld from those leave entitlements. Sally is a quarterly withholder.
Sally’s business turnover for 2018-19 was less than $50 million, and she obviously had an ABN as at 12 March 2020. She is therefore entitled to the First Cashflow Boost payment equal to the amounts she withholds from payments to staff (in this case the payment of accrued leave entitlements) for the March and June 2020 quarters. Provided she lodges her September 2020 BAS, she will receive the Second Cashflow Boost payment (equal in amount to the first Cashflow boost payment) notwithstanding that her business is no longer operating and may well not resume at all, even after the Coronavirus crisis has passed.