logo
Receive the latest mybusiness news
SUBSCRIBE TO OUR NEWSLETTER
Copyright © 2020 MOMENTUMMEDIA

ATO confirms end of cash flow boost measure

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
12 October 2020 2 minute readShare
ATO

The ATO has addressed the end of the cash flow boost scheme, revealing that it will be immediately cut off once businesses lodge their September monthly or quarterly activity statements.

Although small business owners were aware that the cash flow boost measure was coming to an end, questions have been circulating about whether the boost will be immediately cut off or slowly phased out.

It now appears that the Australia Taxation Office (ATO) has taken it upon itself to confirm the hard cut-off in a notice issued to business owners titled “Are you ready for your final boost?”

Advertisement
Advertisement

In the notice, the Tax Office reminds businesses that the final instalment of the additional cash flow boost will be credited when they lodge their September monthly or quarterly activity statements, if they are eligible.

“While the September activity statement is the last one to receive cash flow boosts, help is still available,” the Tax Office said.

 

Assuring businesses that other measures are still available, it added “we understand some businesses may continue to struggle”.

“If you’re concerned you won’t be able to pay on time, or you’ve already missed a due date, contact us as early as possible to discuss your situation as we have a range of options to support you,” it said.

In his budget speech last Tuesday, Treasurer Josh Frydenberg revealed that the cash flow boost has provided $28 billion, helping around 800,000 small and medium businesses stay afloat.

MyBusiness reached out to the ATO to get their comment on the scheme’s end, but was told “the ATO can’t comment on matters of policy”.

SPONSORED CONTENT

 

Tony Greco, the general manager of technical policy at the Institute of Public Accountants (IPA), believes that the phase-out will proceed with relatively little effort from eligible entities.

“The cash flow boost was one of the first major initiatives deployed in response to financial impacts caused by COVID,” Mr Greco told MyBusiness. “It essentially provided support to all employing entities below a certain turnover threshold. It was not as well targeted as compared to JobKeeper where you had to show a decline in turnover to prove that the entity has suffered a decline in financial performance as compared to the previous comparative period which did not have to have been necessarily COVID-related.

“Remember that this initiative was deployed at the height of the crisis, so it was about helping employing entities with capped amounts relative to their withholding liabilities.

“The process is automatic to a large degree, only requiring entities to lodge their activity statements, so the phase-out will proceed with relatively little effort from eligible entities.”

Under the cash flow scheme, eligible businesses were offered 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.

The amount was equivalent to the amount that companies withheld from employees’ salaries (also known as PAYG), and was delivered as credits in the activity statement system.

The boost was delivered in two waves, with the first applied from March to June 2020 and the second from June to September 2020.

ATO confirms end of cash flow boost measure
mybusiness logo
Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?