Most of us are now aware that the Federal Govt's first two stimulus packages involve the reimbursement to employers of PAYGW of up to $100,000 over two payments. Now we know the details:
1. There will be two separate payments made to businesses that lodge quarterly BAS. The maximum you can receive is $50,000 under each payment so a total maximum of $100,000 which covers the period 1 Jan 2020 to 30 September 2020; The minimum you will receive will be $10,000 per payment or $20,000 in total.
2. The first cash boost covers the quarters ending 31 March 2020 and 30 June 2020, AND, the second payment covers the quarters ending 30 June 2020 and 30 Sept 2020. Yes, June Quarter is covered twice and is not an error.
3. The cash boost you will get for the quarter ending 31 March 2020 (the March QTR) will be the greater of:
- $10,000 or
- The actual PAYG tax withheld for the March QTR.
For example, for the quarter ending 31 March 2020, your BAS liability for PAYG tax withholding is $9,000, then you will receive $10,000 cash flow boost. If your PAYG tax withholding is $12,000 for the March QTR, then you will receive $12,000 cash boost. This is capped at $50,000 so if your PAYG tax withholding for the March 2020 QTR is $55,000, you will only receive $50,000 cash flow boost.
4. In relation to the second cash flow boost for the quarters ending 30 June 2020 and 30 Sept 2020, in each quarter you will receive 50% of the cash flow boost you received from the first cash flow boost regardless of the PAYG tax withheld during these quarters. It is pegged to the cash flow boost paid under the first payment.
5. Payment of the first and second cash flow payment is done by the ATO only once the BAS for each quarter has been lodged. Thus it is recommended to lodge your BAS quickly to get the cash flow payments. The March 2020 BAS does not need to be lodged until 26th May but doing so will delay the cash flow boost to your business.
5A. The major takeaway is to ensure that the ATO has updated bank account details for your business. Don't worry, as part of the current BAS period, after lodgement I will check the ATO portal and update if necessary. For those lodging their own BAS, you will need to attend to this or let me know specifically.
6. There are in place integrity measures to stop businesses changing their circumstances to get or increase their cash flow boost. The measures will include repayment of amounts overpaid, penalties and interest charges.
7. To reiterate the eligibility criteria detailed in previous correspondences:
- Be an employer throughout March to September 2020
- Have a turnover of less than $50 Million
- Have an ABN as at 12 March 2020; and
- Make supplies for GST purposes (this supplies for GST purposes does not mean you have to be registered for GST, charities and some micro businesses still trading will be eligible).
Of course a lot of you will be wondering about the $1,500 per fortnight per employee JobKeeper package and this is going to work in the real world. Unfortunately the legislation was only passed last night and the "Rules" have yet to be made or determined by the Treasurer and the legislation passed last night provides the Treasurer with broad powers to make these rules without passing legislation. I will be attending additional sessions with the various tax bodies and ATO Deputy Commissioners and once this has been fleshed out, will be providing advice to all.
In the meantime, if the above has generated any questions please shoot me an email and I will get back to you. ( email@example.com).