As a small business owner in Australia and I am fortunate to have held on to my contracts during the COVID-19 pandemic. I was also fortunate to receive a small “Cash Flow Boost” from the Australian Government. What the “Cash Flow Boost” allowed me to do was witness the roll out from a personal business point of view. I can only say that I feel sorry for most small business owners in Australia who were already doing it tough and could not hold on to their existing contracts.
The “Cash Flow Boost” came into effect on the 12th March 2020. If your cash flow was hurting at this stage it was only going to get worse. The “Boost” would only start to kick in when my accountant lodged my third quarter BAS (Jan to March). Once it was lodged the ATO signified that they would be able to provide a refund against the BAS after the 28th April. If my calculations are correct that would be 47+ days after the “Cash Flow Boost” announcement was made. Any small business owner would know that if no cash was coming in during that time (COVID-19 almost guaranteed that) they would be insolvent or heading in that general direction.
When the “Cash Flow Boost” does kick in, the ATO deducts what is owed on your 3rd Quarter BAS. This is a good outcome but depending on WHEN and HOW you pay your BAS, there is still no cash flow. For my business, this means that I do not have to pay my BAS using the Business AMEX (usually paid on the 28th May and nothing to do with cash).
I did receive a credit (refund) from the difference on the total 3rd Quarter BAS payable, but today (4th June) I received a letter from the ATO saying they could not provide the refund because they did not have my business bank details. I am not sure why this is so. I do receive an R&D Tax Incentive each year from the ATO paid into my business account.
So, from the 12th March to the 4th June (84 days) I still had not received the “Boost. If I did not have my contracts in place, my business of 20 years would have come to a screeching halt.
As small business owners, we know it can only take one bad month (no cash flow) to have a small business on the brink of liquidation … 84+ days would have been a deal breaker!
THANK YOU to all our clients who continue to support us during these difficult times …