There is only one subject dominating the way we live and the way we work if we can, and that is Covid19. As we all isolate ourselves in our homes, business owners will have to first survive the initial loss of revenue during the lockdown and the recession which must inevitably follow. Government support available immediately is detailed on the covid19.govt.nz website under the Financial Support heading. Employers who have a New Zealand Business Number, whether they are companies, sole traders, contractors or self employed, can apply for a wage subsidy of $585.80 for a full time worker or $350.00 for a part time worker (less than 20 hours per week). Employers need to make their best endeavours to pay their staff normally a minimum of 80% of their normal wage or salary. The subsidy is paid out as a lump sum covering 12 weeks and is based around a trust declaration, with the government now announcing that this will be published as a matter of public record.
The other support options supported by the government are available via your own bank providing you meet their lending criteria. Firstly, banks will provide principal and interest deferrals on residential loans for up to 6 months, with any payments not made capitalised onto the existing loan. Secondly, there is a Business Finance Guarantee Scheme where new loans will be made available to support businesses with turnover in excess of $250,000 pa for up to 3 years.
Inland Revenue has also announced support guidelines for taxpayers struggling to make tax payments as a result of Covid19, including remission of interest and penalties for late payments. However, they initially indicated that they expected taxpayers with terminal tax due on 7 April to meet these payments as they related to last year. Inland Revenue has also made other amendments such as increasing the de minimis for provisional tax from $2,500 to $5,000 for the 2021 year onwards. Please remember that Inland Revenue will be closed from 9 April to 16 April for their IT upgrade.
Changes are occurring on a daily basis, but don’t hesitate to email us if you have any queries over the support packages that may be available.