Hi once again and congratulations to those that are back up and running, to whatever level you can, and hang in there those that can’t get back into it. On that note, just to let you know that we are still working from our homes so email if we can be of assistance.
So today’s email is to update you on:
- today’s announcement from the Government on the small business loan scheme
- an update on 7 May GST and tax payments
- an update on the Wage Subsidy (if you have received the subsidy YOU NEED TO READ THIS)
Small Business Cashflow Loan
Today the Government announced an interest free loan scheme to small businesses impacted by the COVID-19 economic shock. Details are light at the moment but the scheme will be administered by the IRD, sounds like $10,000 per business plus $1,800 for each full-time equivalent employee and applications will open on May 12. Again certain criteria will need to be met in order to apply and contractual terms entered into.
GST & Tax Payments
There is no changes in this space that have been announced. So the options are:
GST – firstly you must file your GST return before the due date and if able make payment by the due date being 7 May. If you are unable to pay, you will need to file your return as soon as possible and then contact IRD to make an instalment arrangement. The easiest way to do this is to make an application online via your myIR account. If you don’t have a myIR account with the IRD, we recommend again that you set one up as going forward this is going to be the best way to deal with IRD. Click here and go to the end for instructions to setup myIR.
Tax – it doesn’t look like there is going to be a change in payment date for the 7 May payment. Therefore the options outlined in our email on 15 April remain .. either (1) pay (2) enter into an instalment arrangement with the IRD or (3) finance the tax payment via us. To see the pros and cons of the options click here. To those that have contacted us about financing the tax, we will be in touch. If you would like to discuss the options please either email myself or Julie and we will touch base.
Wage Subsidy UPDATE
It seems so long ago now that we were busy applying to get the subsidy so we just want to circle back and issue some action points on this. This is in light of the commencement of the audit process and the potential ramifications if it found that the criteria was not in fact met.
So we recommend that, if not so already, that you document the decision making process for each of the criteria points and collect evidence to support this .. so just to recap the criteria, using the latest criteria that applied to applications made after 4pm on 27 March:
– employees claimed for a documented, noting details of hours normally worked to justify either the more than 20 hours or less than 20 hours claim;
– the business has experienced a minimum 30% decline in actual or predicted revenue over a month AND the loss is attributable to the COVID-19 outbreak;
– active steps that were taken to mitigate the impact of COVID-19 such as contacting us, contacting the bank, doing the weekly cashflow etc;
– evidence that you have been paying your employees correctly with “best efforts” to pay 80% of their normal income. If you have dropped down to paying the subsidy, you need to document why this course of action was taken. Remember, employment law trumps this criteria so you need to keep records of conversations/emails where there has been agreement with employees to change their conditions of employment ie reduce their pay amounts. Check out this blog for the advice given back at the end of March.
By now you should have done the weekly cashflow forecast .. how is it looking?
Click here to access the COVID-19 Weekly Cashflow Template
Remember to check out our blog .. Click here to check out previous blog posts
Take care and keep safe.