Articles by Salesh Chand
The bad news is that we find ourselves in Level 4 once again. The good news is that there is plenty of support available if your business is negatively impacted due to the lockdown.
First and foremost, however, we hope you and your family are safe and well. Although lockdowns are not especially fun, we are lucky to live in a country that acts fast when there is a Covid outbreak in the community.
We’ve outlined the assistance available to businesses below. If you need help with applying for any of these support measures, please let us know – our team at GRA is happy to help.
1. Wage Subsidy
• The Government have announced a wage subsidy for businesses that can’t operate or will suffer reduced revenue due to lockdown.
• Applications open on the MSD website at 9am 20 August 2021 (Friday) for anyone who is eligible: https://www.workandincome.govt.nz/covid-19/wage-subsidy/index.html
• As well as meeting other criteria detailed in the application, businesses and self-employed people will need to demonstrate or expect a 40% revenue drop due to lockdown.
• Wage subsidy rates have increased to $600 per week for a full-time employee and $359 for a part-time employee. This is an increase from last year’s subsidy.
• The August 2021 wage subsidy is paid for a two-week period.
• The wage subsidy is taxable income for income tax purposes.
2. COVID-19 Resurgence Support Payment
• If you have been impacted by the Level 4 lockdown so that your revenue has reduced by 30% or you have a 30% decline in capital raising ability over a 7-day period compared to a regular 7-day period, then you are eligible to apply for the resurgence support payment.
• You can receive $1,500, plus $400 per full-time employee, up to 50 employees. The maximum payment is $21,500.
• If you're a sole trader, you can receive a payment of up to $1,900.
• Applications for the Resurgence Support Payment open on Tuesday 24 August 2021 via the IRD website using the myIR system: https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment/apply
• The resurgence payment can be used to cover any expense types, including wages and fixed costs.
• You are required to declare the resurgence support payment for GST purposes and pay GST on the amount received.
3. Government Small Business Cashflow Scheme (SBCS)
• If you haven’t applied for it previously, you may be eligible for the Government Small Business Loan. To qualify, you must be impacted by the increase to Alert Level 4 and suffer a 30% reduction in revenue.
• This loan is interest-free if repaid within two years of receiving it.
• The loan must be repaid within five years, and IRD will charge 3% after the first two years.
• You apply through the IRD website: https://www.ird.govt.nz/covid-19/business-and-organisations/sbcs/apply
4. COVID-19 Leave Support Scheme
• If you employ someone who has to self-isolate or is sick with Covid and is therefore unable to work, you can apply for the Leave Support Scheme.
• You will receive $585.80 per week for a full-time employee, and $350 per week for a part-time worker (working fewer than 20 hours a week).
• Apply through the MSD website: https://www.workandincome.govt.nz/covid-19/leave-support-scheme/how-to-apply.html
5. COVID-19 Short-Term Absence Payment
• If you employ someone who has to self-isolate while waiting for the results of a Covid test and they cannot work from home, you can apply for the short-term absence payment. You will receive a one-off payment of $350 for each eligible employee.
• Applications are made via MSD: https://www.workandincome.govt.nz/covid-19/short-term-absence-payment/
6. Business Debt Hibernation Scheme
• If your business is struggling to pay its debts, the Business Debt Hibernation scheme gives you a month’s protection to talk to your creditors. During this time, creditors can’t take legal action to recover your what you owe them.
• This protection can be extended for a further six months if your creditors agree.
• Applications are open until 31 October 2021: https://www.business.govt.nz/covid-19/business-debt-hibernation
7. Challenges paying your tax
• If you are struggling to pay tax due to the impact of Covid, talk to us at GRA. The IRD are amenable to coming to arrangements, but it is always best to use your accountant to communicate with them.
We hope the above information is useful. If you need help with any of it, please let us know.
END OF YEAR TAX INFORMATION
Whether or not you need any government assistance due to Covid, lockdown presents the perfect time to get your tax records in to us at GRA, if you haven’t already done so.
The fastest way to submit your end of year tax information is via our www.IQOnline.co.nz website.
• If you are unsure how to access or use IQOnline, please watch the video at this link www.gra.co.nz/iq-online.
It is business as usual at GRA with all our staff able to work from home, so please get in touch if we can be of assistance.
If you are not already a GRA client, now might be a good time to see how we can help you. If you are new to our practice, we offer a free initial meeting, which can be via Zoom or phone. Call +64 9 522 7955, email [email protected] or fill out our online form.
We wish you and your loved ones all the best for getting through this lockdown (however long it may be). In the meantime, take care.
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