Access news and updates from government about COVID-19 and how it may affect your business via the links below. These websites feature the latest COVID-19 government news and updates for businesses including guidance and advice about employment, tax, cash flow, health and safety and more.
Useful Links
Information for Business
IRD
Latest News
Government COVID-19 Website
Ministry of Health
Wage Subsidy Scheme
Business Contingency Plans
Useful Links
Information for Business
IRD
Latest News
Government COVID-19 Website
Ministry of Health
Wage Subsidy Scheme
Business Contingency Plans
Workplace Operations at COVID-19 Alert Levels
New guidance has been released about workplace activities at different alert levels. Information addresses some frequently asked questions as well as examples of what each alert level might look like for different kinds of businesses. Learn more.
New guidance has been released about workplace activities at different alert levels. Information addresses some frequently asked questions as well as examples of what each alert level might look like for different kinds of businesses. Learn more.
Business Contingency Plans
Creating a contingency plan is most often overlooked or forgotten when times are good, and business is booming. Unfortunately, as we have seen, it does not take much to completely turn things around. In a crises situation you may be required to present your contingency plan to government agencies, shareholders, creditors or insurers, in order to obtain relief funding.
Contingency planning is the process of building a procedure to prepare for the absolute worst. When things go wrong, the plan is there to salvage your business and provide an opportunity to get things back on track again. Most contingency situations are out of your control. History shows that following a crisis societies and organisations never go back to the place where they started. This generates an imperative to think outside the box to create and test new business models. There will always be a new crisis on the horizon like new pandemics, climate action failure, governance failure, cyber warfare and the collapse of economies.
You can download a complimentary copy of our Contingency Plan by following the link below.
Creating a contingency plan is most often overlooked or forgotten when times are good, and business is booming. Unfortunately, as we have seen, it does not take much to completely turn things around. In a crises situation you may be required to present your contingency plan to government agencies, shareholders, creditors or insurers, in order to obtain relief funding.
Contingency planning is the process of building a procedure to prepare for the absolute worst. When things go wrong, the plan is there to salvage your business and provide an opportunity to get things back on track again. Most contingency situations are out of your control. History shows that following a crisis societies and organisations never go back to the place where they started. This generates an imperative to think outside the box to create and test new business models. There will always be a new crisis on the horizon like new pandemics, climate action failure, governance failure, cyber warfare and the collapse of economies.
You can download a complimentary copy of our Contingency Plan by following the link below.
Inland Revenue Covid 19 Business Tax Support
Business Tax Support - Temporary Loss Carry-Back Scheme
IRD advise “Businesses expecting to make a loss in either the 2020 year or the 2021 year can use that loss to offset profits they made the year before. In other words, they can carry the loss back one year to the preceding income year. This can be done before the loss year return is filed. There are two ways to claim your loss carry-back.
We can refund some or all of the tax already paid for the preceding year before the loss year has finished by enabling customers to estimate their loss. If you choose to use the loss carry-back scheme you must first elect to participate in the scheme under the ‘I want to’ section of myIR. Refunds will be processed quicker for claims made through myIR. Log in or register for a myIR account today.
Shareholder-employees who have paid provisional tax on the basis they would receive a shareholder salary in the 2020 year may re-estimate their provisional tax if their company is going to claim a loss carry-back in 2020 - which will reduce their shareholder-salary. Any overpaid provisional tax will be refunded. Shareholder-employees must let us know they are going to re-estimate their provisional tax because of a loss carry-back by using the opt-in service in myIR (in the ‘I want to’ section of your income tax account in myIR account). They can then re-estimate their provisional tax up to the time their 2020 return is due or filed. In all other situations the last day for a provisional tax estimation is the 3rd provisional tax instalment date.
Note: You do not need to have filed the loss year return to claim the loss carry-back”. Learn more.
Business Tax Support - Allowing Inland Revenue to Change Due Dates
IRD advise “The Government proposes giving Inland Revenue discretion to temporarily change dates, timeframes and procedural requirements outlined in a number of Acts administered by them. This provision will apply to businesses and individuals affected by COVID-19. We will publish further guidance in the coming weeks after targeted consultation with tax advisors”.
Small Business Cashflow Scheme (SBCS) - Applications Close 31 December 2020
By 26 May 2020 Small Business Minister Stuart Nash advised that 55,000 loans, totaling $960m, had been applied for. The average loan is around $17,000.
IRD advise “The Small Business Cashflow (loan) Scheme (SBCS) has been introduced to support small to medium businesses struggling because of loss of revenue as a result of COVID-19. This adds to a number of changes the Government has made to assist small to medium businesses through this time. Inland Revenue will administer the payments and repayments of this scheme to provide immediate support to businesses that have been adversely impacted.
Applications are expected to be open for one month starting May 12.
Businesses will apply for the loan payment through myIR. More information on the loan, including eligibility criteria and a calculator to determine the amount a business can borrow, is available from the IRD”.
Small firms struggling with the coronavirus pandemic will be able to get interest-free and low-interest loans of up to $100,000, under a new "small business cashflow scheme" announced by the Government. Finance Minister Grant Robertson said it had become clear that the support banks were providing to small and medium-sized businesses was "not meeting their needs nor our expectations as a Government".
The small business cashflow scheme will be administered by Inland Revenue and will be available to firms employing 50 staff or fewer, with applications opening on May 12. The loans will be intended to meet businesses' "immediate cashflow needs" and to meet their fixed costs. The most companies can borrow will be $10,000 plus an additional $1800 for each full-time employee they have, so only firms employing 50 staff could apply for the maximum $100,000. The loans will be free of interest if they are paid back within a year. Otherwise, interest will be charged at 3 per cent annually up to the maximum total term of five years. Learn more.
Reported in Stuff, 1 May 2020.
COVID-19 Income Equalisation Assistance for Farmers, Fishers and Growers
Income equalisation scheme – class of case deposits. IRD advise "We’re able to accept later deposits to the income equalisation scheme. For farmers, fishers and growers whose current or future income will be significantly affected by the impacts of Covid-19 we’ll allow class of case late deposits for the 2019 income tax year up to 30 June 2020 regardless of when the 2019 return is filed or what the due date is for filing the tax return, The quantum of the deposit is limited to the net income from agricultural activities for the 2018-2019 income tax year. Process. An affected farmer, fisher or grower must first register for the income equalisation scheme. This can be done in myIR".
IRD advise “Businesses expecting to make a loss in either the 2020 year or the 2021 year can use that loss to offset profits they made the year before. In other words, they can carry the loss back one year to the preceding income year. This can be done before the loss year return is filed. There are two ways to claim your loss carry-back.
- Include the carried-back loss in your tax return – we will automatically refund any overpaid tax.
- Ask for a refund of any provisional tax you have paid for 2020 if you are going to carry back a loss from 2021.
We can refund some or all of the tax already paid for the preceding year before the loss year has finished by enabling customers to estimate their loss. If you choose to use the loss carry-back scheme you must first elect to participate in the scheme under the ‘I want to’ section of myIR. Refunds will be processed quicker for claims made through myIR. Log in or register for a myIR account today.
Shareholder-employees who have paid provisional tax on the basis they would receive a shareholder salary in the 2020 year may re-estimate their provisional tax if their company is going to claim a loss carry-back in 2020 - which will reduce their shareholder-salary. Any overpaid provisional tax will be refunded. Shareholder-employees must let us know they are going to re-estimate their provisional tax because of a loss carry-back by using the opt-in service in myIR (in the ‘I want to’ section of your income tax account in myIR account). They can then re-estimate their provisional tax up to the time their 2020 return is due or filed. In all other situations the last day for a provisional tax estimation is the 3rd provisional tax instalment date.
Note: You do not need to have filed the loss year return to claim the loss carry-back”. Learn more.
Business Tax Support - Allowing Inland Revenue to Change Due Dates
IRD advise “The Government proposes giving Inland Revenue discretion to temporarily change dates, timeframes and procedural requirements outlined in a number of Acts administered by them. This provision will apply to businesses and individuals affected by COVID-19. We will publish further guidance in the coming weeks after targeted consultation with tax advisors”.
Small Business Cashflow Scheme (SBCS) - Applications Close 31 December 2020
By 26 May 2020 Small Business Minister Stuart Nash advised that 55,000 loans, totaling $960m, had been applied for. The average loan is around $17,000.
IRD advise “The Small Business Cashflow (loan) Scheme (SBCS) has been introduced to support small to medium businesses struggling because of loss of revenue as a result of COVID-19. This adds to a number of changes the Government has made to assist small to medium businesses through this time. Inland Revenue will administer the payments and repayments of this scheme to provide immediate support to businesses that have been adversely impacted.
Applications are expected to be open for one month starting May 12.
Businesses will apply for the loan payment through myIR. More information on the loan, including eligibility criteria and a calculator to determine the amount a business can borrow, is available from the IRD”.
Small firms struggling with the coronavirus pandemic will be able to get interest-free and low-interest loans of up to $100,000, under a new "small business cashflow scheme" announced by the Government. Finance Minister Grant Robertson said it had become clear that the support banks were providing to small and medium-sized businesses was "not meeting their needs nor our expectations as a Government".
The small business cashflow scheme will be administered by Inland Revenue and will be available to firms employing 50 staff or fewer, with applications opening on May 12. The loans will be intended to meet businesses' "immediate cashflow needs" and to meet their fixed costs. The most companies can borrow will be $10,000 plus an additional $1800 for each full-time employee they have, so only firms employing 50 staff could apply for the maximum $100,000. The loans will be free of interest if they are paid back within a year. Otherwise, interest will be charged at 3 per cent annually up to the maximum total term of five years. Learn more.
Reported in Stuff, 1 May 2020.
COVID-19 Income Equalisation Assistance for Farmers, Fishers and Growers
Income equalisation scheme – class of case deposits. IRD advise "We’re able to accept later deposits to the income equalisation scheme. For farmers, fishers and growers whose current or future income will be significantly affected by the impacts of Covid-19 we’ll allow class of case late deposits for the 2019 income tax year up to 30 June 2020 regardless of when the 2019 return is filed or what the due date is for filing the tax return, The quantum of the deposit is limited to the net income from agricultural activities for the 2018-2019 income tax year. Process. An affected farmer, fisher or grower must first register for the income equalisation scheme. This can be done in myIR".
Covid-19 Treasury Economic Scenarios April 2020
Treasury advise “The COVID-19 pandemic is a ‘once in a century’ public health shock that is also having a profound impact on economic and financial systems around the world and in New Zealand. The impact of COVID-19 and related response measures on the New Zealand economy is highly uncertain. To reflect this uncertainty this report considers several alternative paths that the economy may take. These paths vary based on different assumptions about the time spent at different COVID-19 Alert Levels”. You can access the Treasury economic scenarios of the impact of Covid-19 at the following link. Treasury Economic Scenarios 13 April 2020
Treasury advise “The COVID-19 pandemic is a ‘once in a century’ public health shock that is also having a profound impact on economic and financial systems around the world and in New Zealand. The impact of COVID-19 and related response measures on the New Zealand economy is highly uncertain. To reflect this uncertainty this report considers several alternative paths that the economy may take. These paths vary based on different assumptions about the time spent at different COVID-19 Alert Levels”. You can access the Treasury economic scenarios of the impact of Covid-19 at the following link. Treasury Economic Scenarios 13 April 2020
Exporter Support
Budget 2020 announced “Support for Kiwi exporters in key markets to boost trade Doubling the number of exporters receiving Focus-level support from NZ Trade and Enterprise, to 1400, and utilising NZTE’s business development managers as ‘boots on the ground’ for New Zealand exporters in key markets. Strengthening New Zealand’s brand in priority markets, expanding the International Growth Fund, and scaling-up NZTE’s e-Commerce Centre of Excellence”. Learn more.
R&D and Innovation - Loans to R&D Intensive Firms
Callaghan Innovation are managing the R&D Loan Scheme announced in the 2020 Budget. They advise “The impacts and uncertainty resulting from COVID-19 make it difficult for many innovative businesses to continue their R&D. Understanding the urgent need to keep this critical work going, the Government has allocated $150m for a short-term R&D loan scheme. This recognises the value of R&D to New Zealand, and the difficulty many innovative firms have securing finance for high-risk R&D activity. The scheme at a glance:
To learn more click on this link.
Source: MBIE, Callaghan Innovation.
Encouraging R&D and Innovation - Tax Deductions for Feasibility Expenditure
Budget 2020 sets aside $80 million to encourage entrepreneurs and businesses to develop new products by enabling them to claim tax deductions for unsuccessful or abandoned assets.
Grant Robertson has stated “At present, the costs associated with exploring whether to invest in a new asset or business model are often not deductible for tax purposes. Business owners tell us this can deter them from spending money looking at better ways of doing things. We’re changing this so business can deduct ‘feasibility expenditure’ from their tax bills, including for projects that don’t end up going ahead. This is about creating an environment where businesses are encouraged to innovate and become more productive – even if some of these ideas don’t work out.”
“To keep it simple and reduce compliance costs, particularly for small and medium businesses, we’re proposing that qualifying expenditure totaling less than $10,000 be deductible immediately. Deductions will be able to be spread over five years”, Stuart Nash advises.
E-Commerce and Digital Incentives for SME’s
Budget 2020 announced small business e-commerce incentives by “Supporting small businesses to grow digitally via e-commerce A $10 million fund to provide incentives and grants to encourage e-commerce, train more digital advisors and provide information and support for SMEs wanting to incorporate e-commerce”. Introduction of a Trans-Tasman e-invoicing regime to make it easier to do business in Australia and New Zealand.
Budget 2020 announced “Support for Kiwi exporters in key markets to boost trade Doubling the number of exporters receiving Focus-level support from NZ Trade and Enterprise, to 1400, and utilising NZTE’s business development managers as ‘boots on the ground’ for New Zealand exporters in key markets. Strengthening New Zealand’s brand in priority markets, expanding the International Growth Fund, and scaling-up NZTE’s e-Commerce Centre of Excellence”. Learn more.
R&D and Innovation - Loans to R&D Intensive Firms
Callaghan Innovation are managing the R&D Loan Scheme announced in the 2020 Budget. They advise “The impacts and uncertainty resulting from COVID-19 make it difficult for many innovative businesses to continue their R&D. Understanding the urgent need to keep this critical work going, the Government has allocated $150m for a short-term R&D loan scheme. This recognises the value of R&D to New Zealand, and the difficulty many innovative firms have securing finance for high-risk R&D activity. The scheme at a glance:
- Businesses will be able to apply for a loan of up to $400,000 to support planned R&D activity, subject to other forms of government R&D support.
- The loans will be charged interest at 3% from the start of the loan, however interest will be waived if the loan is repaid within the first year.
- Repayment instalments are not compulsory for the first three years, however businesses may repay sooner if they wish. The maximum loan period is 10 years.
- Depending on demand and your complete filing of the appropriate documentation, loan pay-outs will follow Callaghan Innovation’s standard fortnightly payment schedule starting mid-July 2020".
To learn more click on this link.
Source: MBIE, Callaghan Innovation.
Encouraging R&D and Innovation - Tax Deductions for Feasibility Expenditure
Budget 2020 sets aside $80 million to encourage entrepreneurs and businesses to develop new products by enabling them to claim tax deductions for unsuccessful or abandoned assets.
Grant Robertson has stated “At present, the costs associated with exploring whether to invest in a new asset or business model are often not deductible for tax purposes. Business owners tell us this can deter them from spending money looking at better ways of doing things. We’re changing this so business can deduct ‘feasibility expenditure’ from their tax bills, including for projects that don’t end up going ahead. This is about creating an environment where businesses are encouraged to innovate and become more productive – even if some of these ideas don’t work out.”
“To keep it simple and reduce compliance costs, particularly for small and medium businesses, we’re proposing that qualifying expenditure totaling less than $10,000 be deductible immediately. Deductions will be able to be spread over five years”, Stuart Nash advises.
E-Commerce and Digital Incentives for SME’s
Budget 2020 announced small business e-commerce incentives by “Supporting small businesses to grow digitally via e-commerce A $10 million fund to provide incentives and grants to encourage e-commerce, train more digital advisors and provide information and support for SMEs wanting to incorporate e-commerce”. Introduction of a Trans-Tasman e-invoicing regime to make it easier to do business in Australia and New Zealand.
Construction, Digital and Agritech Sectors
Targeted support for key sectors including $41.4 million across three years into initiatives in the construction, digital and agritech sectors to help create higher-skilled jobs and make our economy more productive and sustainable.
Tourism Recovery Fund
Budget 2020 announced “A $400 million targeted Tourism Recovery Fund, alongside the extension of the Wage Subsidy Scheme and a domestic tourism campaign”. Tourism Transition Programme – delivering advice and support to assist tourism businesses either pivoting towards a domestic and Australian market, hibernating, or other options. Strategic Tourism Assets Protection Programme – helping to identify strategic assets that are considered vital tourist attractions and amenities and provide them with protection and assistance so they will not be lost. Tourism Recovery Ministers Group – established to oversee the Tourism Recovery package and the industry’s recovery. New Zealand Futures Tourism Taskforce – A public-private taskforce established to lead the thinking of the future of tourism in New Zealand.
Targeted support for key sectors including $41.4 million across three years into initiatives in the construction, digital and agritech sectors to help create higher-skilled jobs and make our economy more productive and sustainable.
Tourism Recovery Fund
Budget 2020 announced “A $400 million targeted Tourism Recovery Fund, alongside the extension of the Wage Subsidy Scheme and a domestic tourism campaign”. Tourism Transition Programme – delivering advice and support to assist tourism businesses either pivoting towards a domestic and Australian market, hibernating, or other options. Strategic Tourism Assets Protection Programme – helping to identify strategic assets that are considered vital tourist attractions and amenities and provide them with protection and assistance so they will not be lost. Tourism Recovery Ministers Group – established to oversee the Tourism Recovery package and the industry’s recovery. New Zealand Futures Tourism Taskforce – A public-private taskforce established to lead the thinking of the future of tourism in New Zealand.
Business Finance Scheme Loan (BFS)
As New Zealand moves down alert levels and the Government’s focus shifts to recovery, important updates have been made to the eligibility criteria for BFS loans. To better support viable customers through the uncertainty of the current economic conditions caused by COVID-19, the Government has:
Learn more.
Source BNZ 15 May 2020
As New Zealand moves down alert levels and the Government’s focus shifts to recovery, important updates have been made to the eligibility criteria for BFS loans. To better support viable customers through the uncertainty of the current economic conditions caused by COVID-19, the Government has:
- Removed the lower annual revenue threshold for eligible businesses, with the BFS now supporting businesses with an annual revenue of up to $80 million (previously $250,000 to $80 million).
- Opened up the BFS to support dairy farming, sheep and beef farming, and grain farming. Businesses in these sectors are now eligible to apply for BFS loans.
- Removed the requirement that customers must draw on existing committed debt facilities, so long as the existing facility limits remain in place.
- Removed the requirement for banks to obtain a general security agreement from customers for lending $50,000 and over.
Learn more.
Source BNZ 15 May 2020
Business Debt Hibernation
Business debt hibernation is a government initiative created in response to COVID-19. It helps companies, trusts, and other business entities affected by COVID-19 to manage their debts. Unfortunately, sole traders aren’t eligible for business debt hibernation. If you are a sole trader and seeking government support, check out the cash flow loans and support page.
If business debt hibernation is right for your business, this is how it helps you manage your debts.
Business debt hibernation reduces the burden of existing debts, so you can stay solvent and start trading normally again. For example, you might take a couple of months to get back up to speed, and then pay back the remaining debt over the following quarter. It’s a new option to consider alongside borrowing money, or processes like creditor compromises or voluntary administration. You can organise business debt hibernation yourself, or get help from a lawyer or accountant. If you do it yourself, you’ll need to be aware of several legal requirements. For example, you’ll need to complete several formal declarations and statements. You’ll also need to organise a proposal and agree it with your creditors. Learn more.
Source: NZ Government.
Business debt hibernation is a government initiative created in response to COVID-19. It helps companies, trusts, and other business entities affected by COVID-19 to manage their debts. Unfortunately, sole traders aren’t eligible for business debt hibernation. If you are a sole trader and seeking government support, check out the cash flow loans and support page.
If business debt hibernation is right for your business, this is how it helps you manage your debts.
- You set up an arrangement for your existing debts, eg paying your creditors only a percentage of what you owe them on time and delaying the rest.
- You get up to a month of protection while you set up the arrangement, meaning most creditors can’t enforce their debts, eg applying for your business to be liquidated.
- If your creditors agree, you get a further six months of protection.
- You still need to pay off your debts in full. Business debt hibernation helps you manage your debts while you are protected but they don’t go away altogether. And it’s only for debts you already have. Any new debts will have the terms and conditions your creditors set. Some debts aren’t covered by business debt hibernation, eg employee wages and debts to secured creditors with a general security agreement.
Business debt hibernation reduces the burden of existing debts, so you can stay solvent and start trading normally again. For example, you might take a couple of months to get back up to speed, and then pay back the remaining debt over the following quarter. It’s a new option to consider alongside borrowing money, or processes like creditor compromises or voluntary administration. You can organise business debt hibernation yourself, or get help from a lawyer or accountant. If you do it yourself, you’ll need to be aware of several legal requirements. For example, you’ll need to complete several formal declarations and statements. You’ll also need to organise a proposal and agree it with your creditors. Learn more.
Source: NZ Government.
