What’s being done to help?

08 May, 2020

Small Business Loans

Under the new “small business cashflow scheme”, businesses will be able to get interest-free or low-interest loans of up to $100,000. Key Points are include (We will have more info when the IRD confirm matters next week)

The cashflow scheme will be available to businesses employing 50 or fewer staff.

Eligibility criteria is the same as those for the wage subsidy scheme. Sole traders will be able to borrow up to $11,800 provided they meet a viable business test and have experienced a 30% drop in revenue.

Applications for the scheme open on 12 May 2020. The scheme will be administrated by Inland Revenue. Small firms will have 1 month from the opening date to apply for loans; however, the deadline can be extended.

Companies can borrow $10,000, plus an additional $1,800 for each full-time employee, therefore a firm employing 50 staff can apply for the maximum amount of $100,000.

The loans are interest-free where the amount is paid back within a year. Otherwise, interest will be charged at a rate of 3% annually and the loan must be paid back within 5 years.

No repayment is required within the first two years. If the business is never able to repay by failing the loan does not become taxable.

Provisional Tax

You can re-estimate their provisional tax as many times as needed as long as you do so before the tax return for the year is filed or due, whichever is earlier.

Shareholder-employees impacted by a 2020 loss carried-back claim

Shareholder-employees who have paid provisional tax on the basis they would receive a shareholder salary in the 2020 year may re-estimate their provisional tax if their company is going to claim a loss carry-back in 2020 which will reduce their shareholder-salary. Any overpaid provisional tax will be refunded.

Working from home determination

Inland Revenue has issued a new determination which means employers can pay employees, who are working from home, up to $20 a week tax-free for expenses such as additional heating costs, without having to estimate or show what the employee’s actual expenses were.

Employers can also now make a tax-free payment of up to $400 per employee for furniture costs, without having to work out actual expenses.

The determination is a temporary response to the Covid-19 pandemic and only applies to payments for expenses incurred between March 17 and September 17 2020.

Temporary loss carry-back scheme

Businesses expecting to make a loss in either the 2020 year or the 2021 year can use that loss to offset profits they made the year before. You could carry the loss back one year to the preceding income year. This can be done before the loss year return is filed.

There are two ways to claim your loss carry-back:

Include the carried-back loss in your tax return – we will automatically refund any overpaid tax

Ask for a refund of any provisional tax you have paid for 2020 if you are going to carry back a loss from 2021

We can refund some or all of the tax already paid for the preceding year before the loss year has finished by enabling you to estimate their loss.

Venture Taranaki Professional Services Grants for Small-Medium Enterprises

To support our region’s small-medium enterprises (SMEs) affected by the impacts of COVID-19, a $400 grant has been made available through Venture Taranaki, giving access to much-needed professional services advice and support.
Please note: this grant is not paid to the SME, it is paid directly to the service provider, and can only be used to assist with Covid-19 related matters.
SMEs that use one of our professional advice partners will receive an additional $400 of support, thanks to the partners’ own contribution of time; providing them with a total of up to $800 of professional services advice. SMEs that wish to use other service providers will still be eligible to access the $400 grant through Venture Taranaki.
The support enables Taranaki SMEs to access advice including legal, human resource management, financial and business continuity as they navigate the impacts of Covid-19.
This programme is made available with support from New Plymouth District Council, Stratford District Council and South Taranaki District Council. Funds are granted at the discretion of Venture Taranaki Enterprise Advisors.

To apply for this funding, you will need to contact Venture Taranaki in the first instance, by clicking on the below link and scrolling down to complete the necessary form.

http://business.taranaki.info/Sector-Support/Covid19_Response.aspx

COVID-19 Advisory Funding (Regional Business Partner Network)

The Regional Business Partner (RBP) network has additional government funding available to support enterprises through COVID-19. This can be used to access 1-1 support with professionals who are registered as eligible providers through the RBP network.
The fund is available to access support for:

• HR
• Health and Wellness
• Business Continuity Planning
• Finance and Cashflow Management

For further information, get in touch with Venture Taranaki’s Enterprise Team at business@venture.org.nz.