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Eligibility for cash flow boosts

12 February 2023

Businesses (including sole traders, companies, partnerships or trusts) and NFP organisations are eligible to receive the cash flow boost if:

  • you are a small or medium business entity or NFP of equivalent size (that is, an entity with aggregated annual turnover less than $50 million)
  • you held an Australian business number (ABN) on 12 March 2020
  • you either  
    • made payments to employees subject to withholding (even if the amount you were required to withhold was zero), such as  
      • salary and wages
      • director fees
      • eligible retirement or termination payments
      • compensation payments
      • voluntary withholding from payments to contractors
    • were required to pay an amount in relation to alienated personal services income you received (even if the amount you were required to pay was zero)
  • on or before 12 March 2020, you lodged at least one of    
    • a 2019 tax return showing that you had an amount included in your assessable income in relation to you carrying on a business
    • an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that you made a taxable, GST-free or input-taxed sale.

In some circumstances, we may have discretion to give you further time after 12 March 2020.

You won’t be disadvantaged if you have been given a deferral for your earlier activity statement or are not required to lodge your tax return yet. Read more about the impact of lodgment deferrals.

You are not eligible for the cash flow boosts if you change the way you operate for the sole or dominant purpose of becoming entitled to cash flow boosts when you would otherwise not be entitled. Read more about schemes.

If you don't meet these general eligibility criteria but think you may still be entitled to the boost, there are special eligibility rules for entities in the following situations:

Examples

Example 1: a business that is eligible for the cash flow boost

Robert has operated a small restaurant in Adelaide since 2015. He has had an ABN since then and pays wages to his chefs every week.

Robert's 2019 tax return is not due until May 2020. However, he has lodged all his activity statements since July 2018.

Robert is eligible to receive a cash flow boost.

Example 2: a business that does not pay employees (and is not eligible for the cash flow boost)

Angela runs a small convenience store in Darwin using a trust as her business vehicle. She is the only person who works in the business. She provides for her own remuneration by making trust distributions during the year and does not pay any wages.

As Angela does not make eligible payments to employees, she is not eligible to receive the cash flow boost.

On 15 March 2020, Angela realises her business is not eligible and applies to become registered for PAYG withholding, backdated to 1 March 2020. She changes her business records to reclassify some trust distributions as wages.

Angela is still not eligible to receive the cash flow boost because she has changed the way her business operates for the purpose of receiving a cash flow boost that she was not otherwise entitled to receive.

End of example

Discretion to give you further time

We have discretion to give you further time, after 12 March 2020, to:

  • hold an ABN
  • provide us notice that business income or supplies were made.

PSLA 2020/1 sets out the circumstances that the Commissioner will consider in deciding whether to exercise the discretion. This can include where you cannot satisfy the condition because:

  • although you were running an active business prior to 12 March 2020, you were not required to hold an ABN as a matter of law – for example, an entity which operates in the external territories of Australia is not required to have an ABN
  • you have deferred your lodgment under an extension of lodgment date granted by the Commissioner of Taxation – for example, you had an automatic lodgment deferral in place as you were affected by the Australian bushfires in late 2019, and you lodge your first activity statement after 12 March 2020.

We are unlikely to exercise the discretion to extend the 12 March 2020 date if doing so would be inconsistent with the integrity provisions. For example, where steps are taken to set up new entities, or revive dormant entities, solely for the sole or dominant purpose of accessing the cash flow boost.

For more information, see:

61925