The New Zealand government is introducing legislation, similar to that recently introduced in Australia, with regard to companies who are struggling to maintain solvency as a result of the coronavirus outbreak.
The intent is to allow companies to place their current debt into a form of hibernation and to provide directors with a “safe harbour” that will protect them against action by creditors.
If you have been reading our blog you will be aware of the wage subsidies that have been available to New Zealand businesses (including Australian -controlled companies) who have been impacted by the coronavirus update.
The conditions on current and future applications have now been modified to ensure the spirit of the wage subsidy is understood and adhered to.
We mentioned back in February about how Inland Revenue were allowing businesses impacted by the Coronavirus outbreak to defer payment of a range of taxes.
The deferral covers all taxes including New Zealand GST, PAYE (employer) withholdings and income tax and relates to all payments due after 14 February 2020.
However, it is important to note that you still need to FILE all tax returns by the due date.
The New Zealand government has increased its Coronavirus support by another NZ$6.25 billion with the “Business Finance Guarantee” scheme.
It has been designed to provide short-term credit to help protect the solvency of small and medium-sized New Zealand businesses that have been affected by the Covid 19 outbreak.
As part of the business stimulus package for New Zealand businesses we have previously advised that wage subsidies of up to $585 are available for full-time workers working more than 20 hours per week and $385 per week for part-time workers working less than 20 hours per week.
But how do you treat them in your accounting system and what about tax?
The New Zealand government has released a list of what it considers to be “Essential Business” and therefore exempt from the lockdown.
Here is a list of essential services that can operate during the Coronavirus lockdowns:
As the impact of the Coronavirus continues to evolve in a way we simply couldn’t have predicted just a few short weeks ago, we wanted to reach out to update you on how we are responding to these new challenges at NZTax.com.au.
We are hearing from our clients that they need us more than ever to keep them updated on the New Zealand business environment, to keep them abreast of assistance and to help them do what needs to be done to get it.
Prime Minister Jacinda Ardern has announced that New Zealand will be in full lockdown for a period of 4 weeks.
New Zealand has expanded its wage subsidy by removing the cap of $150,000 for businesses. Previously that cap meant that only businesses with up to 21 employees will be covered.
These are difficult times. Communication is paramount but what you can share with others is subject to New Zealand’s Privacy Act.
Is an employee entitled to sick pay when they are in self-isolation?