Cash Flow Boost Payment #2 – What you need to know
The ATO has set up temporary cash flow boosts to support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19.
Called boosting cash flow for employers, we scanned the ATO website to find out what local businesses employing staff need to know before lodgement of the next BAS, to dramatically increase cash flow.
The boost is a credit in your BAS system and will generally be equivalent to the amount you are required to withhold 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.
Here are some key facts about how the cash flow boost operates.
Usually the cash flow boost will be automatically credited to your account when you lodge your BAS.
When you lodge your June 2020 BAS you may receive both initial and additional cash flow boosts as credits. See examples of what you will receive and check out the ATO’s Cash flow boost estimator (this link will download a file) to work out your cash flow boost amount.
The cash flow boost will be applied to reduce liabilities arising from that activity statement – if there is credit remaining after this occurs, you will generally receive a refund of that amount.
Refunds due should take 14 days or less for the ATO to pay.
You must be eligible for the initial cash flow boost, in order to be eligible for the additional cash flow boosts.
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.
More information on eligibility is available on the ATO website.
Contact the ATO and talk to your tax accountant either during or before they finalise and lodge your BAS to see what the cash flow boost means for your business.
Peter Forbes
Industry & Development Officer