An overview for small businesses of the government’s economic stimulus packages
In response to the economic impact of the coronavirus, the Australian Government has, so far, introduced three stimulus packages to assist small and medium businesses. Here’s the key information you need to know.
How do the cash flow boosts work?The cash flow boost will be automatically given to business through their business activity statements. The cash flow boosts will work by giving businesses a tax credit equal to how much tax they withhold [to the ATO in their activity statements] on their staff salary and wages, up to a cap of $50,000 in total, with additional payments for businesses still trading to be made through to September 2020, up to another cap of $50,000. The amount of additional cash flow boosts that a business is entitled to is based on the value of initial cash flow boosts the business received. It’s complex, but here’s an example of how it could work: Say Tim runs a salon with 12 hairdressers on staff, each with an average annual salary of $50,000. He withholds $8,788 in each of his monthly BASs. Under the scheme, Tim would receive a credit of $26,634 for the March period, followed by credits of $8,788 each for April and May, before receiving a final credit of $6,060 for June, when he would reach the cap of $50,000. If he keeps the same headcount, he would also receive additional monthly payments totaling up to $50,000 through until September. Businesses that don’t withhold any tax for employees will still be eligible for payments amounting to a minimum of $10,000.
Who can you turn to for answers?Helen Francis Sara, senior tax accountant with TY Francis Accounting & Taxation in Dulwich Hill, Sydney, says the impact of the coronavirus has made it “tough as hell” for most of her small business clients. “If you have questions,” says Sara, “the best person to talk to would be your accountant but otherwise, you can contact the ATO direct on their new COVID-19 support line and they will assist you.” The ATO’s COVID-19 support line number is 1800 806 218.
The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisers. Although every effort has been made to verify the accuracy of the information, we disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.
There's more than one way to nurture your business
We love helping businesses grow with the latest info and ideas to educate and inspire. We can also guide you to a funding solution to help bring those business dreams to life.Get started