Small businesses with turnover less than $50m will benefit from a cash flow boost over a six month period as part of a Government stimulus package. This is designed to reduce the economic effects of a pandemic-based downturn, will encourage small businesses to keep staff by providing refunds of PAYG tax withheld.
• Business with turnover under $50m
• Employ staff where PAYG tax is withheld from gross payments
• Lodge Activity Statements during the period 1 January 2020 to 30 June 2020
Form of cash flow boost
The government announcement is to help businesses cover the cost of employee wages. The stimulus package does this by “covering” up to 50% of PAYG withheld over the six month period. The minimum amount an employer would be able to receive is $2,000, to a maximum of $25,000. Presumably, this would mean a refund credit would apply in the taxpayer’s ATO Running Balance Account should a March or June quarterly PAYG tax withheld be above $2,000.