Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible.
Under the enhanced scheme, for the March and June 2020 quarters, employers will receive a payment equal to 100% of the taxes withheld on salary and wages (up from 50%), with the maximum payment being increased from $25,000 to $50,000. In addition, where an employer (both for profit businesses and not-for-profits) is not required to withhold any tax on salary and wages, the minimum payment is being increased from $2,000 to $10,000.
An additional payment is also being introduced for the July – September 2020 quarter. Eligible entities will receive an additional payment equal to the total of all the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments from the government.
The payment is split over the 2020 and 2021 financial years. That is, a maximum of $50,000 reduction in Pay As You Go (PAYG) withholding and a minimum payment of $10,000 for March to June 2020, then again from July to September 2020 on all lodged IAS’s and BAS’s.
TIMING
The cash flow boosts will be delivered as credits in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements. If you lodge early, you will not receive the cash flow boost before this date.
If you lodge quarterly, you will be eligible to receive the credit for:
- quarter 3, March 2020 (lodgement due date 28 April 2020).
- quarter 4, June 2020 (lodgement due date 28 July 2020).
If you lodge monthly, you will be eligible to receive the credit for the lodgement periods of:
- March 2020 (lodgement due date 21 April 2020).
- April 2020 (lodgement due date 21 May 2020).
- May 2020 (lodgement due date 21 June 2020).
- June 2020 (lodgement due date 21 July 2020).
Where this puts the business in a refund position, the Australian Taxation Office (ATO) will deliver the refund within 14 days. The payments will only be available to active eligible employers established prior to 12 March 2020. However, charities which are registered with the Australian Charities and Not-for-profits Commission (ACNC) will be eligible regardless of when they were registered. To qualify for the additional payment, the entity must continue to be active.
ACCESSING THE CASH FLOW BOOST
If you lodged your 2018–2019 income tax return or an activity statement before 12 March 2020, you do not need to apply for the cash flow boost. All you need to do is lodge your upcoming activity statements. The cash flow boost will be automatically credited to your activity statement account.
If you have not lodged your 2018–2019 income tax return or activity statements with the ATO, you may still be eligible if the 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.
If you have an activity statement lodgement deferral, you will still receive the cash flow boost if you are eligible at the time you lodge. This ensures that eligible entities that have received deferrals (e.g. due to recent natural disasters) still have the extended time to lodge and will not miss out on the cash flow boost.
SUPPORTING APPRENTICES AND TRAINEES
The Government is supporting small business to retain their apprentices and trainees.
Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020 (and this subsidy will be available to a new employer where the business is unable to retain an apprentice).
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee (i.e. $7,000 per quarter). Employers can register for the subsidy from early April 2020 and final claims for payment must be lodged by 31 December 2020.
Eligible small businesses are those employing fewer than 20 full-time employees who retain an apprentice or trainee (with the apprentice or trainee being in training with a small business as at 1 March 2020).
Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network provider.
FOR MORE INFORMATION
Please refer to the BOOSTING CASH FLOW FOR EMPLOYERS FACT SHEET from The Treasury. It provides further details of eligibility requirements, calculating the cash flow boosts and examples, tax consequences and schemes.
Please refer to the SUPPORTING APPRENTICES AND TRAINEES FACT SHEET from The Treasury. It provides further details of eligibility requirements, timing and examples.