We are still here to help you.
Our physical office is closed and our team are working from home.
We remain available and have open lines of communication between our team and clients. If you need assistance during this time please do not hesitate to contact us. We can be contacted on email in the first instance.
It is now obvious that a large number of businesses are going to be affected by the Covid–19 alert levels that were announced yesterday. We want to ensure that you claim any subsidies that are available to employers, contractors, sole traders and self-employed if you are eligible.
Please contact us to discuss your situation so we can run through your options, we will not be charging for advice we give over the phone or by email on this matter.
The place to find information is https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html
The main points are:
- The subsidy is to support businesses who experience a minimum of 30% decline in actual or predicted revenue to keep employees on the payroll.
- the business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared with the same month last year, and that decline is related to COVID-19
- your business must have taken active steps to mitigate the impact of COVID-19
- you must make best efforts to retain employees and pay them a minimum of 80% of their normal income for the subsidised period.
- You are eligible for $585 per week per full-time employee for a lump sum payment of 12 weeks ($7,020 per employee) or $350 per week for employees who work less than 20 hours.
- If you are a shareholder-employee you can apply under the employer section. https://services.workandincome.govt.nz/ess/employer_applications/new
- If you are self-employed, a contractor or a sole trader you can apply for this for yourself. https://services.workandincome.govt.nz/ess/trader_applications/new
- The subsidy is income to the business, it does not have GST in it and should be treated as a credit against your wages expense.
The limit of $150,000 per business has now been lifted and there is no longer a cap on this, if you have applied already up to the $150,000, then once you have used this subsidy you can reapply for further funds.
Please read the declaration available on https://www.workandincome.govt.nz/online-services/covid-19/wage-subsidy-declaration.html.
There are many ways a business’s income will be affected by this shut-down, even if you are able to work from home it is likely that your productivity will be reduced and therefore your income will be affected.
Please contact us if you have any queries about the subsidy and how it can assist you. There is quite a bit of detail in the commentary on this and we can run through it with you to determine your eligibility.
Currently, the government has said there will be tax relief available, the IRD website has details on this here https://www.ird.govt.nz/covid-19-novel-coronavirus/tax-relief/tax-relief-for-businesses. These appear to state the usual ability to apply for an instalment arrangement or you can apply for a write-off due to serious hardship.
You can re-estimate your provisional tax prior to the third payment coming due on the 7th May. If you do have a down-turn in business then it is possible you can reduce this payment which relates to the year ended 31st March 2020.
There may be the ability to request remittance of interest and penalties where you have made a late payment, this is only under limited circumstances so I wouldn’t rely on this to be available.
Our recommendation is to pay the taxes as they fall due if you can. Alternatively, we can set up a payment plan under Tax Traders for you which will be at a lower rate of interest than IRD.
Using Tax Traders also allow you to pay the taxes in full at a later date without incurring penalties and with reduced interest rates to IRD. If you want to use this option please call us to discuss and we can prepare a payment plan for you and/or your business.
There have been no extensions granted for PAYE and GST returns or payments, the above only relates to income tax, but there could be a remission of penalties for these if paid late ( each application will be taken on its merit and again we can’t guarantee this).
Stay safe and please do not hesitate to get in touch with us if you need to.