Boosting Cash Flow for Employers with a current ATO debt
Mar 31, 5 months ago

Boosting Cash Flow for Employers with a current ATO debt

The Cash Flow Boost for Employers is to provide temporary cash flow support to small and medium businesses and not-for-profit organisations that employ staff during the economic downturn associated with COVID-19. These cash flow boosts will be applied to reduce liabilities arising from your activity statements. This will result in eligible entities being required to pay less tax to the ATO.

The Initial cash flow boost will be delivered from 28th April 2020. You do not need to apply for the cash flow boosts, if you are eligible, the cash flow boosts will be automatically applied to your integrated client account when you lodge your activity statements. The Initial Cash Flow Boost will be received once the Jan- Mar 2020 Activity Statement is lodged.

EXAMPLES
John’s Book Shop
John owns a Book Shop in NSW. He employs 3 employees with an average income of $25,000.

He lodges his January – March 2020 Business Activity Statement (BAS) with payable amounts for GST and Pay as you go withholding (PAYGW) for his employees.

The GST payable on the Jan-Mar 2020 BAS = $2,000.00

The PAYGW payable on the Jan – Mar 2020 BAS = $4,000.00

Total Payable to the ATO for Jan-Mar 2020 Business Activity Statement = $6,000.00

Under the Cash Flow for Employers stimulus package, John will receive a minimum payment of $10,000.00.

$6,000.00 will automatically be applied to the Integrated Client account for the debt from the Jan – Mar 2020 Business Activity Statement and $4000.00 will be refunded back to John. Refunds will generally be delivered within 14 days of lodgement.

Julie’s Sewing Repairs
Julie owns a Sewing Repair Business in Victoria. She employs 3 employees with an average income of $25,000.

She lodges her January – March 2020 Business Activity Statement (BAS) with payable amounts for GST and Pay as you go withholding (PAYGW) for her employees.

The GST payable on the Jan-Mar 2020 BAS = $1,000.00

The PAYGW payable on the Jan – Mar 2020 BAS = $4,000.00

Total Payable to the ATO for Jan-Mar 2020 Business Activity Statement = $5,000.00

Julie also has outstanding ATO debt from previous Activity Statements and owes $3,200.00 to the ATO.

Under the Cash Flow for Employers stimulus package, Julie will receive the initial payment of $10,000.00.

In Julie’s circumstances $8,200.00 of this stimulus payment will automatically be applied to the Integrated Client account. This is for the previous outstanding debt with the ATO plus the Jan – Mar 2020 Business Activity Statement total ($3,200.00 + $5,000.00 = $8,200.00).

Julie will receive $1,800.00 refund from the ATO within 14days of lodgement of the Jan-Mar 2020 Business Activity Statement.

Mary’s Dog Grooming Parlour
Mary owns Dog Grooming Parlour in WA. She employs 10 employees with an average income of $24,000.

Mary lodges her January – March 2020 Business Activity Statement with payable amounts for GST and Pay as you go withholding (PAYGW) for her employees.

The GST payable on the Jan-Mar 2020 BAS = $2,000.00

The PAYGW payable on the Jan – Mar 2020 BAS = $8,000.00

Total Payable to the ATO for Jan-Mar 2020 Business Activity Statement = $10,000.00

Under the Cash Flow for Employers stimulus package, John will receive an initial minimum payment of $10,000.00.

The $10,000.00 will automatically be applied to the Integrated Client Account for the debt from the Jan-Mar 2020 Business Activity Statement. Therefore, leaving no outstanding debt to pay by Mary to the ATO.

Danielle’s Hair Salon
Danielle owns a hair Salon in SA. She employs 10 employees with an average income of $24,000.

Danielle lodges her January – March 2020 Business Activity Statement with payable amounts for GST and Pay as you go withholding (PAYGW) for her employees.

The GST payable on the Jan-Mar 2020 BAS = $2,000.00

The PAYGW payable on the Jan – Mar 2020 BAS = $8,000.00

Total Payable to the ATO for Jan-Mar 2020 Business Activity Statement = $10,000.00

Julie also has outstanding ATO debt from previous Activity Statements and owes $5,000.00 to the ATO.

Julie’s now has $15,000.00 to pay to the ATO on her Activity Statements.

Under the Cash Flow for Employers stimulus package, Julie will receive the initial payment of $10,000.00 and this will be directly applied to the integrated client account.

Julie will still have the outstanding debt of $,5000.00 to pay to the ATO. She was on a payment plan for this debt so will continue to make the weekly payments to the ATO for this debt.

Louise’s ABC Tutoring
Louise owns ABC Tutoring in QLD. She employs 12 employees with an average income of $26,000.

Louise lodges the January – March 2020 Business Activity Statement with payable amounts for GST and Pay as you go withholding (PAYGW) for their employees.

The GST payable on the Jan-Mar 2020 BAS = $6,000.00

The PAYGW payable on the Jan – Mar 2020 BAS = $15,000.00

Total Payable to the ATO for Jan-Mar 2020 Business Activity Statement = $21,000.00

Under the Cash Flow for Employers stimulus package, they will receive an initial payment of $15,000.00.

The $15,000.00 will automatically be applied to the Integrated Client Account for the debt from the Jan-Mar 2020 Business Activity Statement. This will now leave an outstanding debt of $6,000.00 which will be payable by Sally and Steve to the ATO.

Sue & Martin Training Organisation
Sue & Martin own a training organisation. They employ 12 employees with an average income of $26,000.

They lodges the January – March 2020 Business Activity Statement with payable amounts for GST and Pay as you go withholding (PAYGW) for their employees.

The GST payable on the Jan-Mar 2020 BAS = $6,000.00

The PAYGW payable on the Jan – Mar 2020 BAS = $15,000.00

Total Payable to the ATO for Jan-Mar 2020 Business Activity Statement = $21,000.00

Sue & Martin also have outstanding ATO debt from previous Activity Statements and owe $12,000.00 to the ATO.

Sue & Martin now have $12,000 (previous debt) + $21,000 (Jan-Mar 2020 BAS) to pay to the ATO. A total of $33,000.

Under the Cash Flow for Employers stimulus package, Sue & Martin will receive the initial payment of $15,000.00 and this will be directly applied to the integrated client account.

Sue & Martin will still have the outstanding debt of $18,000.00 to pay to the ATO. They are on a payment plan and will continue to make fortnightly payments to the ATO.

For Further Information relating to the Cash Flow Boost please visit the ATO website at https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/

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