Rebuilding: latest COVID-19 business support & initiatives
With Alert Level 2 underway and most businesses now able to cautiously reopen, we are preparing for the next phase of the COVID-19 crisis: rebuilding.
The Rebuilding Together Budget 2020 released last week, along with other government initiatives, have given businesses some financial and practical support for the coming weeks and months. We take a quick look at some of these.
Wage subsidy extension
The wage subsidy extension will be available from 10 June 2020 for businesses that have experienced a minimum 50% decline in actual or predicted revenue. This is calculated over the 30-day period immediately prior to applying for the extension, versus the nearest comparable period last year.
The weekly rates will be the same as under the current wage subsidy and will provide an 8-week lump sum payment per named employee. The wage subsidy extension must be used to pay employees’ wages and receiving it does not change existing employment law obligations.
Eligible businesses will need to reapply through Work and Income once their current 12-week subsidy has come to an end.
Business debt hibernation
Business debt hibernation helps companies affected by COVID-19 manage their existing debts until they can start trading normally again. For example, businesses may agree with creditors to delay repaying some of their debt.
Small business cashflow loans scheme
One-off government loans are available for small businesses and organisations impacted by COVID-19, including sole traders and the self-employed, to help with cash flow. Applications are open until 12 June 2020
Temporary loss carry back scheme
Inland Revenue has developed a scheme which allows businesses who predict a loss in either the 2019/20 or 2020/21 financial year to estimate the loss for this year and neutralise profits from the previous year (i.e. carrying the loss back to the previous year). This means that they may refund some or all of the tax which the company paid in the previous profitable year, which allows extra cashflows for businesses currently under financial stress.
Contact tracing app
All businesses, except retail, are required to record details of all people’s movement on their premises, including staff, customers and visitors. This is in case the Ministry of Health needs to contact people who have been exposed to COVID-19.
The Ministry of Health has developed the NZ COVID Tracer app to help the public log and track which businesses and organisations they have visited, and who they have come in contact with. Using the app is voluntary, but it helps contact tracing become faster and more effective, which is an essential part of stopping the spread of COVID-19 in New Zealand.
Commercial leases & mortgages
The Government has announced its intention to put in place some temporary law changes to support tenants and landlords in this difficult situation and to make it easier to retain lease arrangements and get back to business as usual after the pandemic.
The team at The Accounting Hub is able to help answer your questions related to these initiatives or with general business support around COVID-19. Please get in touch if you’d like to chat.