Recently passed legislation provides temporary cash flow to small-to-medium businesses to curb losses created by COVID-19. Eligible businesses can receive $20,000 to $100,000 in cash flow boost amounts but must lodge their activity statements until September 2020.
According to the ATO, the cash flow boosts will work as credits in the activity payment system. These credits will be more or less equivalent to the amount small businesses withheld from wages normally paid to employees each month or quarterly.
So the participating employers will keep said withheld payment amounts during these periods. The cash flow boosts will be automatically credited to the employer’s account after they lodge their activity statements. If credit remains, the employers will generally be entitled to a refund for the credits.
The ATO stated in a press release that in order “to support eligible entities during the period associated with COVID-19, any excess credit from the activity statement that received the cash flow boost amount will be refunded to [the business], rather than offset against [the business] other tax debts it has. However, any excess may still be applied against any outstanding debts with other Australian Government agencies.”
Also read: Small business relief packages up to $12,500
