Insights

Coronavirus cashflow boost – The essentials

April 2, 2020

On 12 March 2020, as Australia’s economy commenced to shut down in the midst of the Coronavirus crisis, the Government announced the first of several packages of measures to provide economic assistance to Australian’s affected by the crisis.  

One of the measures announced on 12 March 2020 was a CashFlow Boost payment for small to medium businesses, under which eligible businesses will receive up to $100,000 (but no less than $20,000) between now and September.  

WHO? 

Can you access the Government’s Coronavirus cashflow boost?

The Coronavirus cashflow boost is a Government assistance payment for businesses.  It is not relevant to employees, retirees or the unemployed.  

You may be entitled to the Government’s Coronavirus cashflow boost if all of the following things are true:

  • You withheld PAYG amounts from salary and wages (or from one of the other payments on the list subject to withholding, like leave entitlements) paid to employees for January, February, March, April, May, and/or June 2020 
  • Your business turnover for the 2018-19 financial year was no more than $50 million
  • You had an ABN on 12 March 2020 AND you have made at least one sale of goods and services between 1 July 2018 and 12 March 2020.    
  • As at 12 March 2020, you have lodged a BAS since 1 July 2018 or you have lodged an income tax return for 2018-19

WHAT? 

If you’re eligible for the Government’s Coronavirus cashflow boost, how much will you get?

Put simply, businesses eligible for the Coronavirus cashflow boost will receive somewhere between $20,000 and $100,000 between now and October.

You will get at least $10,000 with your March 2020 BAS and possibly more with your April, May and June 2020 BAS (the exact timing depends on whether you lodge your BAS monthly or quarterly), up to as much as $50,000.  The actual $ amount you receive will be equal to the amount of PAYG withholding you do over that time, subject to the $10,000 minimum.  

You will also get, over July, August and September 2020 (again, the exact timing depends on whether you lodge your BAS monthly or quarterly) a second payment equal to the total amount received over March, April, May and/or June. 

The Cashflow Boost Payments are not subject to tax in your hands, nor do you need to pay GST on them.   

HOW? 

What do you need to do to get the Government’s Coronavirus cashflow boost?

Lodge your BASs on time.  There is no benefit to lodging early.  While lodging your BAS late doesn’t make you ineligible for the payment – provided it is not more than two years late – it will delay you receiving the payment.

WHEN?  

When will you receive the Government’s Coronavirus cashflow boost?

The initial payment entitlement is triggered via lodgement of your March 2020 BAS, and any subsequent entitlement via the April to September BAS’s. The payment is delivered as a credit to the taxpayer’s BAS, resulting in either a lower amount payable for that period or a refund.  Where it results in a refund, the refund will be provided by the ATO within 14 days.

WHERE?

Where can you find more information?

For more information on the Government’s cashflow boost payment we recommend you check out the following links:

Treasury Fact Sheet ‘Cash Flow assistance for businesses’

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_1.pdf

ATO website page on boosting cashflow for employers

https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/?page=1#Eligibility

Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020

https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6522