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The BAS $10,000 or more rebate: updated rules

When this well advertised cash boost credit was first released we had little to no information about how it would be done.  We now have more information and it may mean a number of businesses are now not eligible.  Please read to learn what makes your business eligible and how it all works.

What it is:

  • tax free grants or cash boosts paid to businesses that have employees.
  • they are also not subject to GST
  • Regardless of when you lodge and pay your March BAS – the payments are all to be made on the 28th of April 2020.

Eligibility:

  • Your business must have had an ABN on the 12 March 2020 and continue to be active.  (Active I believe means functioning with transactions, sales and general running a business.  You have not shut down for instance)
  • Have an aggregated turnover under $50 million – which is generally based on prior year turnover
  • have derived business income in the 2018-2019 income year and lodged your tax return on or before 12th March 2020 OR have made GST taxable, GST free or input-taxed sales in a previous period (since 1st July 2018) and lodged the relevant BAS statement on or before 12th March 2020.
  • Have made eligible payments
    • salary and wages
    • director fees
    • eligible retirement or termination payments
    • compensation payments (when you have an injured employee for instance)
    • voluntary withholding payments to subcontractors

How it works:

  • If you have eligible payments but do not pay more than $10,000 PAYG withholding or have nil PAYG withholding on your March 2020 BAS
  • FIRST RELEASE of BOOST:
    • You will receive a credit of $10,000 on your BAS RBA account.  If this results in an overpayment to the ATO, you will receive a refund to your bank account.
    • You will not receive an additional payment in the second boost payment for lodging the June 2020 BAS UNLESS you have withholding greater than $10,000 in that BAS.
    • MAXIMUM to be paid on First release Boost is $50,000
  • SECOND RELEASE of BOOST
    • There will be ADDITIONAL Boost payments on the June and September BAS’s.  (additional to the first release boost payment that would be made in March and June)
    • note there is no ‘maximum’ applied on second release boost as it is merely a function of  the March BAS boost payment.
    • You work out the Second release boost as follows:
      • If Quarterly
        • June BAS will get 50% of the boost paid on the March BAS
        • Sept BAS will get 50% of the boost paid on the March BAS
      • If Monthly
        • June, July, August and Sept BAS will each get 25% of the Boost paid on the March BAS

WARNING:

  • If you have restructured your business or increased wages especially for the March BAS then you will not be eligible for cash flow boosts
  • It may also trigger an audit examining prior payments to see if they also should have been altered to wages and if superannuationor FBT would have been applicable.
  • This in itself brings into question the right to restructure a business or pay staff any ordinary additional payments for the March period –  it would be recommended not to pay bonuses or any other normal additonal payments to staff in March unless you have substantial evidence to prove it was was not purely for the boost payments.