This measure is designed to support small and medium sized businesses and to improve business confidence. This measure also supports the activities of not-for-profits (including charities) at a time when they are facing increased demand for services.

1. What is the Boosting Cash Flow for Employers?

It’s expected you’ll be able to apply for early release if:

  • The Government is providing temporary cash flow support to small and medium businesses and not-for-profit organisations that employ staff during the economic downturn associated with COVID-19 (novel coronavirus).
  • This will be done through two sets of cash flow boosts delivered from 28 April 2020 to support employers to retain employees. The Government will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses, delivered through credits in the activity statement system, when eligible businesses lodge their activity statements.

2. Does the business need to apply for this benefit?

Eligible businesses do not need to apply with a separate form. Upon lodgment of their activity statement, the first amount will automatically be credited to the business’ account, but no earlier than 28 April 2020. A business that lodges early will not receive the cash flow boost before this date. Eligible businesses, including not-for-profit organisations, must have held an Australian Business Number on 12 March 2020 and lodge their activity statement to receive the credit.

3. Who is Eligible for the Benefit?

Businesses will be eligible to receive the cash flow boost provided they are a small or medium business entity, including;

  • Not-for-profit organisations,
  • Sole traders,
  • Partnerships
  • Companies or trusts, that;
  • Held an ABN on 12 March 2020 and continues to be active;
  • Has an aggregated annual turnover under $50 million (generally based on prior year turnover); and
  • Made eligible payments that the business is required to withhold from (even if the amount required to be withheld is zero).

Eligible payments include:

  • salary and wages
  • director fees
  • eligible retirement or termination payments
  • compensation payments
  • voluntary withholding from payments to contractors.

In addition, the business must also have either:

  • derived business income in the 2018–19 income year and lodged its 2019 tax return on or before 12 March 2020; or
  • made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020.

The most recent income tax assessment for a prior year will generally determine whether a business is a small or medium business entity. However, in the absence of any income tax assessments for prior years, businesses may still be eligible if the Australian Taxation Office (ATO) can use other information it holds on the business to determine that it is a business and would have an aggregated annual turnover under $50 million.

The ATO may also give a business further time to provide notice that business income or supplies were made. This will generally be the case where the business has a lodgment deferral in place. If the business did not have a lodgment deferral in place, it will not become eligible if the business lodges or amends returns for those periods now.

Timing — Initial cash flow boost

The initial cash flow boosts will be delivered as credits in the activity statement system from 28 April 2020. If a business lodges early, it will not receive the cash flow boost before this date. If the business lodges:

  • Quarterly, it will be eligible to receive the credit for:/li>
  • Quarter 3, March 2020 (lodgment due date 28 April 2020)
  • Quarter 4, June 2020 (lodgment due date 28 July 2020).
  • monthly, it will be eligible to receive the credit for the lodgment periods of:/li>
  • March 2020 (lodgment due date 21 April 2020)
  • April 2020 (lodgment due date 21 May 2020)
  • May 2020 (lodgment due date 21 June 2020)
  • June 2020 (lodgment due date 21 July 2020).

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