Government Extends Support to Business Impacted by Covid-19

The Government continues to extend previously announced support schemes for Businesses impacted by Covid-19.

Over recent weeks the following extensions to the support packages have been announced:

Small Business Cashflow Loan Scheme (SBCS)

The SBCS application deadline has been moved from 24 July 2020 to 31 December 2020.

Eligible businesses and organisations (with 50 employees or less) may apply for a loan of $10,000 plus $1,800 per full-time equivalent employee up to a maximum of $100,000. The annual interest rate will be 3% from the date the loan is provided.

Interest will not be charged if the loan is fully paid back within one year of receipt.

The loan will be required to be repaid in full within five years of application, although repayments are not required (but can be made voluntarily) in the first 24 months.

Covid-19 Business Advisory Fund

The Government has allocated an additional $40m to the Covid-19 Business Advisory Fund to support small and medium sized businesses during the global pandemic.

The Covid-19 Business Advisory Fund can provide support in areas such as HR, health and wellbeing, business continuity, cashflow and finance management, marketing and digital enablement strategy.

Businesses may be able to access up to $5,000 excl. GST per business to obtain advice in these areas.

Funding is only available through the Regional Business Partners Network (RBP) Growth Advisors.

Drumm Nevatt & Associates Limited offers services that are registered with the Covid-19 Business Advisory Fund.  Find out more by visiting www.regionalbusinesspartners.co.nz.

Tax Pooling

In normal circumstances a taxpayer may use a tax pooling account to satisfy a tax obligation.

The Income Tax Act 2007 requires the transfer request to be made on or before either 75 or 76 days after the terminal tax date. The Inland Revenue has varied this timeframe to 365 days after the terminal tax date for the 2019 income tax year.

This variation applies to transfers of amounts to meet provisional or terminal tax obligations, or use-of-money interest on these amounts.

The taxpayer must have entered a contract with a tax pooling intermediary on or before 21 July 2020 to apply this variation and must also have experienced a “significant decline” in revenue.

This variation recognises that some taxpayers have encountered cash flow difficulties as a result of the pandemic in circumstances where they otherwise would have used tax pooling.