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Cash flow boost will be posted on eligible charities by end of April

A webinar organised by the Australian Charities and Not-for-profits Commission revealed legislation has been enacted to provide temporary cash flow support to small and medium businesses and not-for-profit organisations including charities that employ staff.

Two sets of cash flow boosts are expected to be delivered from 28 April 2020 to support employers retain employees.

ATO is expected to provide cash flow boosts of between $20,000 & $100,000 to eligible charities delivered through credits in the activity statement system, when eligible charities lodge their activity statement.

Eligibility

Charities that are employers may be eligible if they are registered with the ACNC and have an aggregated annual turnover of under $50 million,  and made eligible payments subject to withholding, even if the amount withheld was zero.

Next Steps

If charity is eligible, they do not need to apply separately. The cash flow boosts will be delivered as a credit in the charity’s activity statement.

To receive the boost, charity will need to lodge its monthly March 2020 activity statement or March 2020 quarterly activity statement.

Cash flow boost credits will be posted to the charity’s account by the ATO from 28 April 2020.

For charities that have been granted a lodgment deferral, the cash flow boost will generally be made at the time of lodgment.

Initial cash flow boost

Initial cash flow boost will be delivered as credits in the activity statement system from the Government’s announced date of 28 April 2020.

If a charity lodge early, they will not receive the cash flow boost before this date.

Quarterly credits are March 2020 and June 2020, an monthly credit include March to June 2020.

Additional cash flow boost

Eligible entities that received initial cash flow boosts will receive additional cash flow boosts for the periods June to September 2020 equal to the total amount of initial cash flow boosts. This will be delivered in either two or four instalments depending on reporting period.

Based on the amount of PAYG withholding, charities will receive a credit equal to 100% of the amount withheld, up to a maximum of $50,000.

Minimum credit will be $10,000, even if the amount required to be withheld is zero. Monthly lodgers will receive a credit calculated at three times the rate in the March 2020 activity statement, to align with quarterly lodgers.

Total of all initial cash flow boosts across all of the relevant periods cannot exceed the maximum limit of $50,000. The amount of additional cash flow boosts a charity is entitled to is based on the value of the initial cash flow boosts received.

If an organisation has difficulties meeting tax and super obligations, ATO can defer some payments for up to six months.

ATO continues to provide COVID-19 support information if you search ‘QC 61775’.

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