Eligible businesses and not-for-profits were earlier told they will receive between $20,000 and $100,000 in cash-flow boost amounts by lodging their activity statements up to the month or quarter of September 2020.
With the cash-flow boosts due to be delivered as credits in the activity statement system from 28 April 2020, the ATO has outlined the difference in lodging before or on 28 April.
Stressing the importance of timing, the ATO said that businesses that opt to lodge before the due date of their March 2020 quarterly or monthly activity statement will likely see any excess credits they are entitled to applied against outstanding debts with other government agencies.
Those that lodge from 28 April will see any excess credit from the activity statement that received the cash-flow boost amount refunded, rather than offset against other tax debts.
ATO’s example describes business owner Ed who has a debt of $2,000 on his activity statement account from a previous period.
Ed lodges his March 2020 quarterly activity statement before the due date of 28 April 2020, because he is expecting an excess of $5,000 in GST credits for that period.
However, when the lodgement is processed, $2,000 of the $5,000 excess credit is used to pay the outstanding amount on his account, meaning that once the cash-flow boost of $10,000 is applied on 28 April 2020, Ed will receive a total refund of $13,000 — the $3,000 excess credit plus $10,000 cash-flow boost.
But if Ed lodges his March 2020 activity statement on the due date of 28 April 2020, when his lodgement is processed, the excess credit of $5,000 will not be used to pay the outstanding debt.
Hence, Ed will receive a total refund of $15,000 — the $5,000 excess credit plus $10,000 cash-flow boost.
For more information from the ATO, click here.