As part of the government’s response to the Coronavirus epidemic, the government has included in its stimulus package a measure which will boost cash flow for businesses.
This particular measure will provide small and medium-sized businesses up to $25,000 in payments with a minimum payment of $2,000 for eligible businesses. Businesses with an aggregated annual turnover of less than $50 million that employ staff are eligible to receive this payment. Eligibility will generally be based on the aggregated turnover of the prior year.
This payment will be delivered via the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, with the maximum payment amount being $25,000.
Even if an eligible business is not required to withhold tax, so long as payments are being made to employees, a minimum payment of $2,000 will be received.
The Australian government has claimed that this measure will benefit roughly 690,000 businesses employing around 7.8 million people.
The measure will be applied for a limited number of business activity statement lodgments.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.