With businesses suffering hardship due to the effects of the Covid-19 pandemic, the government has put in place a number of different measures to provide them with a financial helping hand until they can start trading at more usual levels.

One of the financial stimulus measures which have been put in place is the cash flow boost. Designed to provide businesses with some easement from their PAYG withholding tax, the cash flow boost is straight-forward to access as long as you complete the relevant paperwork on time. Here we take a look at how much eligible businesses can claim, what paperwork needs to be completed and the relevant deadlines required.

How much can businesses claim?

The maximum which can be claimed for Quarter 3 (Jan to March 2020) and Quarter 4 (April to June 2020) is $50,000. The minimum amount which can be claimed initially is $10,000, with an additional amount available in Quarter 4 if cumulative tax obligations exceed $10,000.

After the payments which are made in Quarter 3 and Quarter 4, businesses may also be able to claim additional payments for Quarter 4 and Quarter 1, at 50% of the amount paid initially.

How can businesses claim?

The amount of cash flow boost given by ATO is decided from the activity sheet figures. For this reason, it’s important that, if you haven’t already done so, your Quarter 3 activity sheet is submitted as soon as possible. Monthly reporters also need to make sure that their activity sheets have been submitted on time. From the information given on the activity sheets, ATO will refund PAYG withheld funds, to the maximum of $50,000. If you’re not sure how to fill in your activity sheets or find that your figures are more complex than usual due to Covid-19 disruption to working patterns, it’s important to get professional assistance. An accountant will be able to give you the advice you need to submit your activity sheet correctly.

How much will I receive?

Here we give some examples of how payments might break down, depending on the amount submitted initially. Further examples are available on ATO’s website.

Example 1

If a business has incurred a PAYG withheld amount of less than $10,000 for Quarter 3 (say $8,000 for example), on receipt of their activity statement ATO will release $10,000 to them. When the business submits their Quarter 4 return, if they submit a further PAYG withheld amount of $8,000, they will receive $6,000. In September 2020 (Quarter 1), if the activity statement shows a PAYG withheld amount of $8,000 again, the business will receive $8,000 (50% of the initial amount provided).

Example 2

Business B has a significant PAYG withheld amount of $58,000 for March Quarter. The ATO will refund them the maximum of $50,000. In June Quarter, they will receive $25,000 (50% of the initial amount). Business B will also receive an additional cash boost $25,000 in the September Quarter.

Not all businesses are eligible for the cash flow boost. If you have concerns regarding the eligibility criteria or are struggling to complete your activity statement, we are here to help.

Pherrus Financial Services is an established firm of accountants who are able to provide the accounting information and assistance you need to ensure the ATO receives the information needed to process your cashflow boost in a timely manner. Get in touch to find out more.


The Insights published on our website have been written by our professional staff strictly for educational purposes. Please note that the information and views expressed above do not constitute professional advice and are general in nature only.

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