CASH BOOSTER INCENTIVE AND MARCH 2020 BAS LODGEMENT
16 APRIL 2020
As you will already have, or about to, lodge your March 2020 quarterly BAS we would like to give you a reminder about your potential entitlement to the first round “Cash Booster” incentive credit, how it will work and what you need to do.
Will your business be entitled to the Cash Booster credit? Eligibility is based on the following conditions:
- You carried on a business prior to 12 March 2020 and had a valid ABN,
- Your annual group turnover was less than $50 million,
- You employed at least one employee on payroll and withheld PAYG Withholding tax,
- You have either lodged your 2019 tax return and/or lodged your September 2018 and December 2018 quarterly BAS.
What will your business be entitled to?
- Your Cash Booster credit will be calculated by the ATO based on the amount of PAYG tax withheld on employee wages for the January-March 2020 quarter (box W2),
- If your lodge your PAYG Withheld quarterly the ATO will calculate your credit as 100% of the amount shown in box W2 of the BAS (up to the maximum limit of $50,000),
- If you lodge your PAYG Withheld monthly the ATO will calculate your credit as 300% of the amount shown at box W2 of the BAS (up to the maximum limit of $50,000). This is to equate your credit for a 3 month period,
- If your PAYG Withheld is less than $10,000.00 you still receive the full minimum Cash Booster credit of $10,000.00,
- The credit will be applied to your ATO Integrated Client Account after the 28th April 2020.
What do you need to do for the March BAS?
- You simply need to prepare and lodge your March BAS as normal, no “adjustments” are required,
- The ATO will calculate your credit and apply it to your Integrated Client Account,
- This credit amount will then be offset against the total amount owing on your March BAS (i.e. GST, PAYG Withheld and any PAYG Instalment),
- You will then only need to pay the balance owing after the credit offset,
- If the Cash Booster credit is greater than the total amount due for the March BAS the ATO will proceed to refund the excess credit to your nominated bank account, provided your business has no other tax amounts owing,
Future BAS Lodgements?
- You will continue to lodge your June 2020 and September 2020 quarterly BAS’s as usual
- When lodged, you will automatically be given further Cash Booster credits in July and October 2020 each equal to 50% of the amount received in April e.g. If you received the full $50,000 credit in April you will receive a $25,000 credit in each of July and October 2020 to be offset against your June and September BAS liabilities,
- Monthly PAYG Withholding lodgers will receive four credits being 25% of the amount received in April, (e.g. $50,000/4 = $12,500) in July, August, September and October 2020,
- After receiving these credit offsets you only need to pay the balance owing on the Integrated Client Account
How will I know what my credit is and what to pay to the ATO?
- If you normally lodge your own BAS you will need to check your ATO Integrated Client Account regularly (via your myGov login) for when the ATO has applied the credit. Then pay any balance due by the normal due date. Please be aware that you may not receive your credit by the 28th April due to the expected ATO backlog,
- If you lodge your BAS through a registered Bookkeeper/BAS Agent they will be able to check your Integrated Client Account and advise the amount payable,
- If MyAccountants prepares and lodges your BAS we will confirm your credits on the Integrated Client Account and send you your BPay details directly with the due date,
- If you are due for a refund you simply need to wait until the ATO refunds to you nominated bank account.
Bookkeeping tips and pitfalls
- Most businesses will simply pay the net BAS amount due after the ATO has applied the Cash Booster credit,
- You must remember the Cash Booster credit is an Income Tax and GST Free incentive so it must be separately recorded in your accounting software so you don’t inadvertently pay GST or income tax on the amount in the future,
- You will also need to make a manual adjustment in your accounting records to show this credit offset against your PAYG Withheld and/or GST Payable,
- If you would like MyAccountants to provide the accounting/journal entries to ensure your records are correct and avoid incorrect taxing please contact our office for assistance,
- For any MyAccountants clients, for which we prepare and lodge the BAS, we will automatically provide those accounting adjustments required.
MyAccountants are happy to review you BAS before lodgement and confirm the Cash Booster credit you are likely to be entitled to.
We trust you find this information helpful. Please stay healthy