The COVID-19 pandemic has put the global economy in turmoil, sending many industries into a panic with the uncertainties of when they can resume operations. Each nation’s efforts in reducing the curve of contracting the disease forced many businesses to shut down or limit their service in favour of observing proper physical distancing protocols.
Although most conglomerates and large name companies will survive after this pandemic, the same isn’t true for small to medium business. The good news is that the government put in motion a cash flow boost for affected employers during this pandemic to help them recover their losses in different aspects of their business’ processes.
Cash flow boosts from the Australian Taxation Office
The government, through the Australian Taxation Office (ATO), is allowing businesses affected by the COVID-19 pandemic to receive temporary cash-flow support to help with the current economic downturn.
Boosting cash flow is for employers to maintain the financial state of their business through two different sets of cash flow boosts. These will help business owners pay for essentials, such as rent, electricity, and other bills, to retain their company’s standing.
Through the ATO, the government will offer tax-free cash flow between a value of $20,000 to $100,000 for employers that are eligible for the grant. These business owners will receive the credits through an activity statement system where they must input their company’s activity statements up until the quarter of September 2020.
The value of the cash flow boost you’ll receive will mainly be equivalent to the amount withheld from employee wages for each month from March to June 2020. An additional boost will apply after submitting your company’s accounting of activity statements from March to June 2020.
Eligibility for the cash flow boost
To be eligible for the Government’s cash flow boost, you must qualify under a few government guidelines. For Not-for-profit(NFP) organisations, they are fit o apply for the financial grant if you:
Are a small or medium business of equivalent size(resulting in an aggregate annual turnover of less than $40 million)
Held an ABN during the twelfth of March 2020
Submitted payments to employees that are subject to withholding, which includes wages and salary, director fees, compensations, retirement, or termination payments
Submitted a 2018-19 income tax return that shows your amount included in your assessable income, or a GST return or an activity statement after the tax period after the first of July 2018 and before the twelfth of March 2020.
Besides the criteria above, you can still receive the cash flow boost through special eligibility rules through particular situations. Visit the ATO website to know more about these exceptions.
Applying for a cash flow boost
The cash flow boost is tax-free assistance from the government to employers, which is automatically set in place by the ATO. Most businesses will receive an automatic credit to their account, so long as they went through the proper lodging procedures. No new forms are necessary for receiving these cash financial grants.
Many businesses are yet to recover from the damages that their business felt during the lockdown period. Nevertheless, many companies are adapting to the modern consumer climate by opening online stores as avenues to continue operations while still observing physical distancing protocols. As a business owner, you need to be familiar with the different modern tools at your disposal to help you survive and thrive through today’s trying times.
When you perform accurate and efficient bookkeeping, you can ensure your business’s growth in today’s digital landscape. Ecommerce Accountant is an accounting firm in Australia that offers different eCommerce accounting services for your business needs. Contact us today, and we’ll make sure that your company’s financials are well-maintained and accounted for!