If your small business has been diligently collecting taxes for your staff’s salary or wages, the good news is you could be eligible to receive up to $100,000 in refunds from the Australian Tax Office (ATO) on the tax withheld,
The ATO says the temporary cash flow boosts will support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19.
Businesses and not-for-profit (NFP) organisations who employ staff may be eligible to receive between $20,000 to $100,000 in cash flow boost amounts by lodging their activity statements for PAYG up to the month or quarter of September 2020. The first cash flow boost will be 100 per cent of the tax withheld on each employee’s salary and wages with a few exceptions:
Monthly lodgers will receive a credit for March which is 300 per cent of their withholding for that month;
Eligible businesses will receive a minimum of $10,000 across March to June, even if their total withholding is less than $10,000; and
Total cash flow boosts for March to June cannot exceed $50,000.
There will be an additional cash flow boost of up to $50,000 for the June to September quarter.
The measures were originally announced as part of a raft of COVID relief during the government’s initial stimulus pakage.
The cash flow boosts will be delivered by the ATO as credits in the activity statement system, and will be applied to offset liabilities.
“They will generally be equivalent to the amount withheld from wages paid to employees for each monthly or quarterly period from March to June 2020,” the ATO stated.
“In practice, this means you keep the amounts you have withheld from payments for these periods.”
Excess credit from the activity statement will be refunded to the business, rather than offset against any other tax debts.
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