Covid Update - 22 February 2022
The Government has announced a further support package. The key changes are as follows:
New Covid Support Payment
What can you get?
Each Payment will be $4,000 per business plus $400 per full-time employee (FTE), capped at 50 FTEs or $24,000.
The payments will be available on a fortnightly basis for 6 weeks — so 3 payments in total.
The Government has indicated that they will extend the payment if necessary.
Who can get it?
Businesses will have to show a 40% drop in revenue for 7 consecutive days within the 6 weeks prior to the shift to Phase 2 of the Omicron response on 15 February, compared to 7 days after that date.
Businesses also have the option of comparing their revenue to the revenue earned in a comparison period of 5 January 2021 to 15 February 2021. This option is not yet available but is expected to be in mid-March.
How do you apply?
Applications for the first payment open on 28 February 2022 with payments starting from 1 March.
We expect the application to be via the WINZ website (see here)
Further information
As this is so new, there is limited information online. We expect more details over the coming days.
There is some basic information here.
COVID-19 Small Business Cashflow Scheme (SBCS)
There are two key changes to the Covid Support loans:
Those businesses that have already accessed a loan, are allowed to draw down an additional $10,000 with a new repayment period of five years and the first two years being interest free
They have also agreed to remove the first two years of accrued base interest from all borrowers who have, or will, take out a loan under the scheme. This change will mean interest will only start accruing at the beginning of year three
This means that in contrast to our blog last week, there is now less incentive to pay off the loan in full before the two-year periods.
There is no information on how to apply for the scheme yet but, it’s fair to assume the application will again be via MyIR (IRD login).
Flexibility for Tax Payments
The government has also confirmed “additional” flexibility for tax payment dates. It’s hard to know how extra this really is – there has always been some flexibility with IRD for those affected by Covid (and other situations).
We have recently negotiated some significant tax write-offs for clients in situations of hardship. We can offer a success fee based service for any clients who fit the criteria for a debt negotiation process.
We recommend that any businesses struggling to pay tax get in touch with us to discuss your options.