Since the New Zealand government announced the wage subsidies there have been some changes to the terms and conditions so we thought it was time to bring you up with the latest including how to apply.
In this article we summarise the amounts you can receive, the conditions that attach to it, your obligation to retain workers and the details of your company that will be available to the public as a result of your application.
We have previously reported that Inland Revenue are responding to the impact that Covid-19 is having on New Zealand businesses by allowing deferrals of tax that would ordinarily be payable but is proving a challenge as a result of current business conditions.
The New Zealand government considers it essential that businesses continue to file returns as that is providing information with regard to the difficulties faced by businesses and the general economic outlook. Therefore the areas of relief relate to any late payment penalties rather than late filing penalties.
New Zealand’s Inland Revenue has confirmed they will be continuing with the planned shutdown over the Easter break while they complete the migration of the remaining systems still hosted on Inland Revenue’s old tax system to their new tax system.
Their core systems will be down from 3 PM (New Zealand time) Thursday, 9 April 2020 and expect to come online Thursday, 16 April 2020.
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: