Candy Gillespie staff have been working from home during Covid Lockdown. We will re-open under government recommendations when Covid Alert Level 2 begins.
Corona Virus Government Package: This is a quick rundown of the support the government is offering to help businesses impacted by Covid 19.
Wage Subsidy Scheme: Thousands of businesses in New Zealand have applied for the Covid Wage Subsidy and billions of dollars have been paid out. To be eligible, one of the main criteria was that Covid 19 had caused business turnover to drop by 30% or more compared to the same time last year. Some businesses who have applied are now discovering that their turnover did not drop as much as expected and are having to pay the subsidy back. Some employers did not continue to pay their staff for the full 12 weeks and are also liable to pay the subsidy back. If you are one of these businesses, talk to us, but be prepared to pay back any subsidy you weren't entitled to.
Small Business Cashflow Scheme (SBCS): This is a loan offered to small businesses.
• To be eligible for the SCBS loan a business or organisation must have 50 or fewer full-time employees and be eligible for the Wage Subsidy Scheme. The business must have a sound plan to be viable and ongoing and hold information on file to verify this.
• In most cases, businesses will be entitled to a one-off loan amount of $10,000 plus $1,800 per full-time-equivalent employee.
• Applications will be open from 12 May 2020 to 12 June 2020. Most businesses will receive the funds within five working days.
• Inland Revenue will administer the payments and repayments of this loan.
• The loan has a five-year term and must be repaid in full by 31 July 2025.
• The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within one year (i.e. it's only interest free for the first year if it is repaid in full within 12 months). Repayments are not compulsory in the first 24 months.
This will be a good option for many businesses. It could be better than going further into overdraft or applying to the bank for more funding.
Applications need to be made using the MyIR website. You will need to make a declaration about your business and how you'll be using the funds. You only have until 12 June.
Loss Carry Back: This scheme allows you to move any losses made in the 2019/20 year or the 2020/21 year to the previous year. Prior to this rule change, these losses could only be carried forward to future years. If in either the 2019/20 year or the 2020/21 year you are likely to make a tax loss, these rules may create some benefit for you. You may be able to have tax refunded for the prior year. If this sounds like something you want to look into further, please contact us.
Deferral of tax: If you have tax due and you aren't able to pay it because of the financial impact of Covid 19 please contact us to discuss your options. IRD is allowing deferral of tax payments with no interest or penalties if you are in this circumstance. Financial arrangements and Tax payments need to be made 'as soon as practicable'.
Asset Purchases: Assets purchased for under $5,000 between 17 March 2020 and 16 March 2021 can be claimed as an expense immediately rather than depreciating the cost over the life of the asset. After next year, this limit will reduce to $1000.
ACC: ACC has delayed sending out invoices for Cover Plus Extra (CPX) until July. If you use CPX, you will remain covered at your agreed amount until this time.
Review your costs: Now is also a good time to review your costs and ensure your costs are all necessary. Are there any that can be cut back? Talk to your creditors and your debtors to arrange a payment plan for any outstanding bills. We can help with cashflow forecasts.
Tax Payments: Remember that the IRD no longer accepts cheques for tax payments. When you pay your taxes electronically, please be sure to load the correct IRD number, period and tax type code for which that payment applies. Give us a call if you're unsure.
You can also make tax payments by eftpos (or cash) at Westpac branches.
There is a new tax code when paying PAYE to the IRD. Previously you had used the DED tax code. The correct tax code is now EMP. We will remind you of this when we send out your PAYE payment notices each month.