If you’ve received a cash flow boost, you may be wondering if the amounts you’ve received affect your income or deductions this tax time.

Here are the four essentials you need to know when lodging your tax return:

1. You don’t pay tax on cash flow boost amounts as they’re non-assessable non-exempt income. You may still need to report the amounts in your tax return for other purposes. Read the relevant tax return instructions for your business structure for more information.
2. You’re still entitled to a deduction for the payments made to your workers provided you have complied with the pay as you go (PAYG) withholding and reporting obligations for that payment.
3. If you pass the cash flow boost on to others, there may be tax consequences for the recipient.
4. If you claim the research and development tax offset, your claim isn’t affected by any cash flow boost you receive.

Remember, a registered tax agent can help you with your tax; please check with your accountant for further information on the tax consequences of the cash flow boost.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business BAS covered. If you have questions in relation to eligibility and reporting requirements please call our team on 1300 015 130 for specific advice regarding your business.

Source: Know your boosts inside and out. (2020). Retrieved from https://www.ato.gov.au/Newsroom/smallbusiness/Employers/Know-your-boosts-inside-and-out/