After a tumultuous six months involving may major changes for business, New Zealand is settling down as we try to keep Covid-19 from our shores. Many of the support mechanisms instituted by the government during the pandemic (for example wage subsidies) have now lapsed and business must seek to adjust to the new normal methods of operating.
One government support mechanism still available to business is the small business Cashflow (Loan) Scheme (SBCS) where applications can be made up to 31 December 2020. The loan available is up to $10,000 plus $1,800 per full time equivalent employee and no interest will be charged if the loan is repaid within 12 months. Inland Revenue has now improved its systems to advise the taxpayer in advance of key events such as interest accruing if the loan is not repaid in the first year and the start date for regular loan payments. ( November update: The government will be extending the application date to 31 December 2023 and doubling the interest free period to 24 months.)
Another support mechanism introduced during the year was increasing the low value threshold for depreciation purposes up to $5,000. Any business assets under this value purchased on or before 16 March 2021 can be written off as an expense in the 2021 tax year. From 17 March 2021, this threshold will reduce permanently down to $1,000.
If you have any queries over the rapid tax changes instituted this year, please get in touch with us for further explanations.