With tax payment dates looming, and applications for support now open, we remind you that we are operating remotely, and are able to advise, support or handle any of the below options as needed. We do not need to know about your own wages subsidy or resurgence applications, but if you make application yourself for the small business loan scheme, or defer or arrange for late Inland Revenue payments, please let us know.
Resurgence Support Payment (RSP)
Opens today, and is available to firms if they have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to the increased COVID-19 alert level. You can apply through MyIR.
The Resurgence Support payment covers other costs apart from wages, that businesses may incur.
Businesses and organisations can apply to receive the lesser of:
– $1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTE’s.
OR
– Four times (4x) the actual revenue decline experienced by the applicant.
https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment
Wage Subsidy Scheme
The Wage Subsidy Scheme is still open, and businesses can apply for the subsidy via the Work & Income website (see our last newsletter for details).
Just a reminder, to qualify you need to have had at least a 40% decline in income (exclusive of any COVID subsidy payments) over the period 17 August 2021 to 30 August 2021 inclusive, compared to a typical 14 day consecutive period of revenue in the six weeks immediately prior to 17 August 2021. There are special rules for those who have high seasonal revenue. The wage subsidy needs to be repaid, if you end up not meeting the criteria.
Applications for the wage subsidy usually remain open for up to a month.
https://www.workandincome.govt.nz/covid-19/
Small Business Cash Flow Loan Scheme (SBCS)
The Government will provide loans to small businesses, including sole traders and the self-employed, impacted by COVID-19 to support their cash flow needs. Businesses who have seen a downturn of at least 30% compared to the same month the previous year can borrow $10,000 plus $1,800 per full time employee (up to $100,000).
If you’ve previously applied for a SBCS and have fully repaid it, you can apply again.
Applications are open until 31 December 2023. You can apply through MyIR.
IRD payments and filing
IRD accept that it may challenging for taxpayers in the current environment to continue filing returns. However, IRD are still looking for returns such as GST returns, so please make sure you continue to file. They also use information from the returns when looking at applications for the Government’s COVID-19 relief packages. For details about filing and paying, see
https://www.ird.govt.nz/covid-19/manage-my-tax/filing-and-paying
Further, IRD understand that payment arrangements might need to be made. Businesses that have an amount to pay can set up a repayment plan to pay it over time. This can be for amounts due now or later. For more information, see
https://www.ird.govt.nz/covid-19/manage-my-tax/filing-and-paying/difficulty-in-paying-tax
If COVID-19 has impacted a business’ ability to pay tax on time, a request can be submitted for remission of penalties and interest through MyIR. For more information on financial relief, see
https://www.ird.govt.nz/covid-19/manage-my-tax/penalties-and-interest/requesting-financial-relief
The Debt Hibernation Scheme
This scheme allows businesses to delay payment of their debts but requires debts to be paid in full. It has been extended to 31 October 2021.
https://www.business.govt.nz/covid-19/business-debt-hibernation/
Company cars and fringe benefit tax – a reminder
Usually a FBT liability arises if a motor vehicle is “made available” to an employee for their private use. The Commissioners view is that a motor vehicle will attract FBT in the usual way during Level 4.
However, if the employee works from home during Level 4, and as home is considered the “place of work”, there is no FBT, provided the company car is unavailable for private use.
It can be made unavailable by means of a letter from the company director to the employee. An example is on page 11 of the Fringe Benefit Tax guide IR 409. Clients might like the opportunity to take advantage of this while in lockdown.
https://www.business.govt.nz/covid-19/financial-support-for-businesses/