More financial assistance on hand as Rudd Government announces a reduction of the February quarterly PAYG instalment for small businesses
In light of the current economic climate the Federal Government have been proactive in their approach to stimulate the waning economy, via both direct and indirect means.
As an incentive to encourage consumer spending, cash bonuses were handed out to pensioners and those receiving the family benefit allowance just prior to Christmas. More recently, in a move to offer similar assistance to Australian small business owners, the Government has announced that there will be a 20 percent reduction on quarterly pay-as-you-go (PAYG) instalments that are payable on 21 January 2009 or 28 February 2009.
The Government acknowledges that small businesses form an integral part of the Australian business landscape and it is expected that the recent PAYG reductions will provide assistance to some 1.3 million small businesses around the country.
It is important to be aware that this reduction does not apply to other tax liabilities that are payable at the same time such as PAYG withholdings, GST, Excise, or FBT.
Who is eligible for the reduction?
Generally, all “small business entities” are entitled to the 20 percent reduction. Under the tax law a “small business entity” is defined as “carrying on a business, and satisifies the $2 million aggregated turnover test.”
How do I calculate my payment?
The reduction is applied to the instalment amount as shown on the Business Activity Statement for the quarter ending 31 December 2008. Businesses that are eligible for the reduction need to pay 80 percent of the instalment amount that is shown on the BAS statement for the December quarter.
For most businesses this payment is due on or before 28 February 2009, although this year it is due and payable on 2 March 2009, as 28 February falls on a weekend. Some small businesses elect to report and pay their GST on a monthly basis and their due date for payment of this instalment is 21 January 2009.
At The Quinn Group, our team of professional accountants are able to provide advice to businesses and individuals on a range of accounting and tax related issues. To speak with one of our professionals regarding the reduction of your December quarterly PAYG instalment or for any other tax query that you may have please contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.