Covid-19 latest update

By on 16th April 2020


New suite of measures announced for small and medium sized businesses

New measures were announced on Wednesday 15 April 2020 which included:

  • $3.1 billion tax loss carry-back scheme (estimated cost over the next two years)
  • $60 million estimated savings to business each year from changes to the tax loss continuity rules
  • $25 million in the next 12 months for further business consultancy support
  • Greater flexibility for affected businesses affected to meet their tax obligations
  • Measures to support commercial tenants and landlords

The government is being proactive in helping businesses to stay solvent through this current crisis and to help with economic recovery in this health crisis.

Click here to read the fact sheet from the Beehive website. More specific information provided further in this update.

Update from ACC

CoverPlus Extra client

ACC have advised that during this time CoverPlus Extra payment plans will be paused, and they will not seek payment for outstanding balances.  They advise this will not impact your cover at the agreed amount.

Check out all your policy details by logging into MyACC for Business.

Other ACC invoicing

ACC have advised that every day their system issues invoices. ACC have added an insert to reassure customers that we have options available to support them and they are not actively collecting at this time.

ACC COVID-19 information for business

Regional Business Partner Network

The government is providing a further $25m in funding for Regional Business Partner Network who can assist business with access to support including business continuity, planning, finance and cash flow management.

Laurenson Chartered Accountants offer services that are registered with the Management Capability Development Voucher Fund, find out more by visiting www.regionalbusinesspartners.co.nz 

Business Finance Guarantee Scheme

The Government has launched a Business Finance Guarantee Scheme for small and medium-sized businesses to help protect jobs and support the economy.  This new scheme in partnership with approved banks will support targeted new loans (including increases to existing limits) to eligible businesses, as a response to difficulties caused by COVID-19.

Under this scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000 for up to three years.

Read more about this scheme here

IRD – Greater flexibility for taxpayers for tax deadlines

During this time IRD are encouraging taxpayers to file all their returns on time, this information is used to make correct payments to people and helps the Government continue to respond to what is happening in the economy.

If you are unable to make your payments within the current deadlines you can make contact with IRD through your myIR access, include letting them know if you are suffering hardship due to COVID-19 so that an instalment arrangement can be made. Or alternatively you can contact us and we can assist.

IRD – writing off penalties and interest

Details from IRD website:

To assist customers, the Commissioner already has a number of financial relief and remission provisions of the Tax Administration Act 1994 (TAA).  The Government has also introduced a new section 183ABAB into the TAA 1994 giving the Commissioner the ability to remit use of money interest (UOMI) charged if the taxpayer’s ability to pay tax on time has been significantly adversely affected by the COVID-19 outbreak.

This new provision would include both when a taxpayer is physically unable to make a tax payment on time and also when a taxpayer is financially unable to make a tax payment on time because of the economic effects of the COVID-19 outbreak. That relief is available once the core tax has been paid in full.  This discretion applies to tax payments due on or after 14 February 2020.  The Commissioner’s ability to remit interest under s 183ABAB will apply until 25 March 2022.

To be eligible for remittance of penalties and UOMI, the taxpayer must meet the following criteria.

  • The taxpayer has tax that is due on or after 14 February 2020
  • The taxpayer’s ability to pay by the due date, either physically or financially, has been significantly affected by COVID-19
  • The taxpayer will be expected to contact the Commissioner as soon as practicable to request relief and will also be required to pay the outstanding tax as soon as practicable

It is the Commissioner’s view that the taxpayer has been significantly affected by COVID-19 financially where the customer’s income or revenue has reduced as a consequence of COVID-19 and that as a result of that reduction in income or revenue is unable to pay their taxes in full and on time.

Click here for more information.

IRD – temporary loss carry-back scheme

Details from IRD site:

This temporary change should be introduced in a bill in the week beginning 27 April.

Businesses expecting to make a loss in either the 2019/20 year or the 2020/21 year would be able to estimate the loss and use it to offset profits in the past year. In other words, they could carry the loss back one year.

This change means we could refund some or all the tax already paid for the year they were in profit. It means firms could cash out all or some of their losses in 2019/20 or 2020/21. Without this change, firms would have to carry forward any loss to a year when they make a profit.

Taxpayers do not need to rush to re-estimate their provisional tax before 7 May. Part of the proposed law change would make it possible for them to re-estimate it after the date of the final instalment. This will give them more time to work out any estimated loss for the 2020/21 income year.

Between now and 27 April, officials will consult with tax advisors to ensure the law and administrative guidance is as clear as possible.

Government websites for more information

                

Call us on 04 4771801 or contact us today