Eve Kent gives an update update on Phase 2 of the government Covid-19 stimulus packages, including what’s on offer for small and medium businesses. Click to hear the podcast. In writing below.
Government Stimulus Update – Covid-19
Good afternoon everyone. This is Eve from Farmanco Bookkeeping providing another update on the economic response to the Corona Virus.
Yesterday (22/3/20) the government announced the new cash flow assistance ‘boosting cash flow for employers measure’ that they’ve brought out. This is an increase on the prior package offered earlier last week.
The government is providing up to $100,000 to eligible small and medium sized businesses and also not for profit organisations that employ people and the minimum payment they’ve increased it from has gone from $2,000 to $20,000.
These payments will help these businesses’ cash flows so they can keep operating, pay their rent, power, bills and retain their staff.
The government has enhanced this measure as part of the second economic response package and under this enhanced scheme employers will receive a payment equal to 100% of their salary and wages that have been withheld. This was formerly up to 50%.
The maximum payment has also been increased from $25,000 to now being $50,000 and in addition to that, the minimum payment is being increased from a $2,000 limit to $10,000.
They’ve also introduced an additional payment that will be coming in the July to October 2020 period. Eligible entities will receive this additional payment, equal to the total of all of their boosting cash flow for employer payments that they have received.
This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.
This cash flow boost provides a tax free payment to employers and it is automatically calculated by the ATO on the lodgement of Activity Statements, so your March Activity Statement and then your monthly one for the IAS during April, May and June or quarterly if you lodge on the June BAS or your IAS for the monthly periods.
To be eligible for this boosting cash flow for employer payment, small and medium sized businesses, again need to just be already in the PAYG system with an aggregated annual turnover of under $50 million. The eligibility will generally be based on your prior year turnover, so looking at what staff you employed in the prior year.
This payment will be delivered by the ATO as an automatic credit in your next Activity Statement from 28th April 2020. Eligible employers that withhold tax to the ATO on their employee salary and wages will receive a payment equal to 100% of the amount withheld up to a maximum of $50,000.
If you need any assistance with this at all, please contact our office on (08) 9295 0940 or you can email firstname.lastname@example.org. We’re happy to help out in these times. We know it is quite difficult, quite stressful for everybody. So, if you need any clarification or guidance just to make sure you’re doing your March BAS correctly, which is due on 28th April, drop us a line or get in touch with your consultant and we’ll try and steer you through these difficult and uncharted waters that we’re facing.
Thanks everybody and take care.