Covid-19 Business Support Update
With things moving so quickly, we thought it was time to pull together an update of the various Covid-19 business support options. As always, if anything isn’t clear or you need a little more information, feel free to get in contact.
Wage subsidy extension
The wage subsidy scheme has been extended for eligible businesses and self-employed people. The scheme is available to businesses that are still significantly impacted and is available once their initial 12-week wage subsidy is finished, extending this support for a further 8 weeks.
Find out more information about the wage subsidy extension here.
Small Business Cashflow Loan Scheme Extension
The small business cashflow loan scheme has also been extended right through till the end of 2020. Eligible businesses can receive a loan of up to $10,000 plus $1,800 per full-time equivalent employee at an interest rate of 3% per annum. No interest will be charged if the loan is fully repaid within 12 months.
Find out more about the small business cashflow loan scheme extension here.
Regional Business Partners Network Capability Voucher Scheme Funding
More support is rolling out for small to medium sized businesses through the Regional Business Partners Network capability voucher scheme. A further $40million of funding was announced on top of $15million invested since March.
As part of the RBP network, our Covid-19 specific business improvement services are available for 100% funding including our Practical, applied cashflow management course to help you develop your very own cashflow management strategies, and our program to help keep your businesses moving forward through the Covid-19 crisis.
Check out what one of our clients who received funding in the first announcement had to say about the cashflow management course:
“I recommend Kiwitax’s Cash Flow Management services. The approach was really helpful, especially the tools to help track how we are doing based on historical data and future projections. Working out client value and the number of leads needed to convert — and seeing that in monetary terms with the tax implications, was an eye-opener. I appreciate being able to go through this process with goals attached to clear financial planning and potential outcomes. “
Please get in touch with our Business Improvement Advisors if you would like to discuss how this course might work for you and your business and if you might be eligible to get access to the funding.
Provisional Tax Changes
Changes have been made to the provisional tax threshold, increasing from $2,500 to $5,000 for the 20-21 income year and beyond. If this affects you, then you may be able to re-estimate your provisional tax and potentially gain a refund on any overpayments that you may have made.
Changes have also been made to provisional tax due dates and late payment penalties and use of money interest rates. Checkout the update about the changes here.
Temporary Loss Carry Back Scheme
Businesses that are expecting to make a loss in either the 2020 or 2021 year may be eligible to apply that loss to offset the preceding income years profits. Further details about the temporary loss carry back scheme are available here.
Low-Value Asset Depreciation Threshold
Another recent change to New Zealand tax law is an increase on the threshold for depreciation of assets from $500 to $5,000. This change is temporary and applies to assets purchased from 17 March 2020 until 16 March 2021. Beyond 16 March 2021 the threshold has been permanently increased from $500 to $1,000.
See IRD for more info here.
Business Debt Hibernation
Affected businesses may be able to enter into an agreement with their creditors to hibernate their debt obligations for up to 7 months. This should allow them to trade normally again rather than perusing liquidation for example.
Insolvency Safe Harbour
Finally, provisions have been made to the companies act 1993 to provide relief to directors of companies that are facing significant liquidity problems owing to Covid-19. These provisions have been backdated to April 3 2020 and aim to ease the pressure on directors of companies that may have otherwise felt the need to wind up their businesses.
You can read more information about the safe harbour provision here.
About Kiwitax – Award winning business improvement, tax and accounting service
Here’s the thing. As a business, rental property owner or start-up, you get a kick out of having your own gig. But chances are dealing with your tax and accounting leaves you cold. Good news! We love it, so hand it over to Kiwitax and we’ll look after it all for you.
Whether you deal with us online, by phone or drop into our Napier office, you’ll find a friendly, professional hardworking team ready to work with you, however you keep track of your financial information and from wherever you do business. And all for a fixed price. It takes just two minutes to get a quote.
Plus if you’re at a loss to know how to improve aspects of your business – from growth planning to cashflow management, even tax debt and so much more – we’re all over that too. Our Business Improvement advisors can help you make a plan and put it into action.
Kiwitax are a preferred training provider for Business Improvement services through the Regional Business Partner Network Capability Voucher Scheme. This is a government funded scheme designed to boost business capability by providing funding of up to 50% of approved training programs with specified training providers up to a maximum value of $5000.
If you liked this article and want to make improvements in your business, with quarterly coaching sessions specifically tailored to support you to identify and achieve your business goals, lets chat!
Please note that the information in this article is valid as at 28 July 2020 and is subject to change.