According to ATO communication seen by Accountants Daily, the Tax Office has now reviewed the eligibility of all taxpayers who have lodged March 2020 activity statements, with a “vast majority” having automatically received those credits.
The ATO said there remains a “very small number” — less than 5 per cent of businesses — where there has been a delay to include further checks to confirm their eligibility.
Of that undisclosed small population, 72 per cent of them have now received the cash-flow boost credits or will be receiving them this week.
“For those taxpayers who are awaiting confirmation of their eligibility and where appropriate allocation of cash-flow boost credits, we have processed a sizeable portion of cash-flow boost credits for those clients and the remainder will be processed by the end of this week,” the ATO said.
A further 25 per cent are seen to be ineligible for the cash-flow boosts and will be notified by the ATO.
The remaining 3 per cent are taxpayers who will be required to provide further information to confirm their eligibility, with the ATO having commenced contact with them to invite them to provide verbal declarations earlier this week.
As of 12 May, over 450,000 entities have received over $8 billion in activity statement credits, but the ATO has been unable to provide updated figures.
However, the measure was predicted to benefit around 690,000 businesses, and a further 30,000 not-for-profit entities, with the Treasury estimating the payments to cost $31.9 billion.
The update comes after a number of practitioners reported a delay in their clients receiving the cash-flow boost credits despite seemingly meeting the eligibility requirements.
The ATO responded by revealing they had deployed a new system tool on 20 May to work through each client record individually to review eligibility, in a bid to reduce the need for taxpayers and their agents to escalate the issue.
On 29 May, the Tax Office then put the infrastructure in place to allow verbal declarations to be made through the ATO contact centres for those required to provide further information or demonstrate proof of business activity for eligibility.
In the latest development, the ATO has now moved to publish a cash-flow boost companion guide to explain the six criteria that its systems analyse to establish eligibility for the credits.
The companion guide notes that employers who are able to meet all of the six criteria will be automatically eligible, while listing out different circumstances where discretion is available.
Employers who are not eligible, and where the ATO has no discretion, will not be granted a cash-flow boosts regardless of any additional information or evidence that is provided to the ATO.
Additional cash-flow boost
Employers are now keenly awaiting the second round of the cash-flow boost, which will be automatically credited when they lodge their activity statements for each monthly or quarterly period from June to September 2020.
The second round, which will see amounts equal to the total amount of initial cash-flow boosts received, is expected to see clients rush in to lodge their BAS at the end of June, coinciding with tax time 2020.
The additional cash-flow boost credits will be delivered in two instalments for quarterly lodgers, and four instalments for monthly lodgers.
If you lodge:
Quarterly – you will be eligible to receive the credit for:
- quarter 4 (April, May and June 2020) – lodgement due date is 28 July 2020
- quarter 1 (July, August and September 2020) – lodgement due date is 28 October 2020
Monthly – you will be eligible to receive the credit for:
- June 2020 – lodgement due date is 21 July 2020
- July 2020 – lodgement due date is 21 August 2020
- August 2020 – lodgement due date is 21 September 2020
- September 2020 – lodgement due date is 21 October 2020
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.