5th June 2020 ….
It’s been good to see the country starting to moving again under alert level 3 and alert level 2. We are all looking forward to alert level 1, when things will return to some sort of normal. This is just a quick note to make sure you are aware of some important dates that are looming.
First wages subsidy scheme to close 10th June
Applications for the first COVID-19 wages subsidy scheme expire on 10th June. If you think you may qualify for this, and you have not already applied, then you need to act soon, or it will be too late. To qualify for the scheme, you must suffer a 30% drop in revenue for at least a one month period (30 days) between January 2020 and 9th June 2020, and you must be able to attribute this decrease in revenue to COVID-19. The intention of this subsidy is to enable you to cover the wages of employees (including working shareholders and proprietors if you are a sole trader or partnership). You can find the application form for the Subsidy here -> https://www.workandincome.govt.nz/covid-19/wage-subsidy/how-to-apply.html
Some businesses may need to repay the subsidy
Some of our clients have experienced better than expected business during the COVID-19 crisis. If you received the subsidy, and on review after 9th June, it turns out that your business did not experience 30% drop in revenue for a 30 day period, then you may be required to repay the subsidy. If you think your business may not have met the 30% decline in revenue criteria, please do the calculation carefully. You will need to be able to add up your revenue on a daily or weekly basis over the COVID-19 period, and also for the same period last year, or the preceding months, or whatever period you are using as a comparison. Before paying the money back, it is probably worth getting us to help ensure your calculations are correct. You can repay the subsidy using the online form at -> https://workandincome.govt.nz/form/workandincome/govt/nz/form.req2?requestType=workandincome-govt-nz-wagesubsidy-refund-form
Second wages subsidy scheme (Wage subsidy extension)
A wages subsidy extension payment will be available to support employers (including sole traders) who are still significantly impacted by COVID-19 after 9th June (when the Wages Subsidy period ends) To qualify for this subsidy, you must have suffered a 50% decline in revenue for the 30 days before you apply, compared to the closest period last year. The subsidy extension is for an 8 week period. Applications for the second wages subsidy scheme open on 10th June.
Small business cashflow (loan) scheme closes 12th June
For businesses with 50 or fewer employees, the government will lend $10,000 plus $1,800 per employee on pretty attractive terms to assist with cash flow. Your business must have met the criteria for the Wages Subsidy scheme. Applications can only be made by the business owner logging into MyIR on the IR website (https://www.ird.govt.nz/). Applications
As always let us know if we can be of any further assistance
The material on this website is for the benefit and information of clients. The items are in the nature of general comments only, and are not to be used, relied or acted upon without seeking further professional advice. Hounsell Accounting Limited accepts no liability for any errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice