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Weekly Digest – 24 September 2021 | Business Support and Advisory

Weekly Digest – 24 September 2021 | Business Support and Advisory

Welcome back to our Weekly Digest. Read on for business support and advisory, plus the latest updates and some ideas to help us all move forward.

Auckland Moves to Alert Level 3 | Business Support and Advisory

Auckland has moved out of Alert Level 4 lockdown, but could remain in Alert Level 3 for months, according to experts. Prime Minister Jacinda Ardern believes the outbreak can still be controlled under control under Level 3 as long as people stick to their bubbles.

Also, the PM believes that the country has the potential to hit the 90% vaccination mark over the next couple of weeks– just in time for people to enjoy more freedoms over Christmas.

Increased Fines for COVID-19 Rule Breakers

Last Friday, the government announced higher fines for those breaching COVID-19 restrictions amid concerns that the outbreak may spread beyond Auckland.

Intentionally failing to comply with rules such as travelling without permission will be a criminal offence and is now liable on conviction for a fine of up to $12,000 (previously $4,000) or 6 months imprisonment. Fines for companies can go up to $15,000.

On-the-spot fines for infringement offences like failing to wear a mask where it is mandatory will also be increased from $300 to now $4,000. These changes will be implemented in November, subject to the passing of the COVID-19 Public Health Response Amendment Bill.

Economy Surges in Q2

The country’s economy grew at a much faster pace than expected in the second quarter, as GDP surged 2.8% in the three months through June, according to the latest data by Statistics New Zealand. This figure beats the Reserve Bank of New Zealand’s estimate of 0.7% and the Reuters poll forecast of a 1.3% increase.

This improvement in the economy reinforces views that the central bank may start lifting interest rates despite the recent COVID-19 outbreak.

COVID Support for Businesses Amid Level 4 Lockdown

Businesses impacted financially by this lockdown are being offered a range of support measures. You can find information on the COVID-19 website detailing the support available, or there’s a recap below.

If your business has to close temporarily or reduce opening hours

COVID-19 Wage Subsidy

If your business could not operate at Alert Level 4 restrictions or you lost revenue, you can apply for the COVID-19 Wage Subsidy scheme to help keep paying your staff and protect jobs. Your opportunity to apply closes on 30 September.

Wage Subsidy 2021 #2 Update

The Wage Subsidy currently only applies to those businesses operating under Level 4 or Level 3 restrictions. This means generally anyone outside of the Auckland borders cannot and should not apply for this round of Wage Subsidy (at this stage).
If you have applied and received the subsidy (done before the move to Level 2) then you will need to consider and ensure that

  1. your revenue does in fact drop by 40% for the 2 weeks from 31 August to 13 September and
  2. it is attributable to the time spent at level 3 and/or any direct knock-on effect of Auckland remaining at level 4.

Get in touch with us if you have any questions.

Find out more about the Leave Support Scheme on the Work and Income website.

COVID-19 Resurgence Support Payment

The COVID-19 Resurgence Support Payment helps cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.

To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.

You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.
The maximum payment is $21,500.

If you’re a sole trader, you can receive a payment of up to $1,900.

Applications for the COVID-19 Resurgence Support Payment are now open. You need to apply through Inland Revenue. Businesses anywhere in New Zealand can apply if they meet the eligibility criteria.

Find out more information about the COVID-19 Resurgence Support Payment and how to apply here.

If your business has reduced revenue

Small Business Cashflow Loan Scheme

If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan where you can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business.

  • When applying for the loan, you need to be able to declare that your business is viable.
  • Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year.
  • Applications are open until 31 December 2023 through myIR. If your business does not have a myIR account, you will need to create one to apply.

Loans will be interest free if they are paid back within 2 years. The interest rate is 3% for a maximum term of 5 years.

IRD tax assistance

If you’re finding it hard to meet your tax obligations, Inland Revenue may be able to help. Get in touch with us if you have any questions.

Insolvency relief

The COVID-19 Business Debt Hibernation scheme allows businesses to get a month’s protection while they talk to their creditors.

If an employee needs to self isolate

COVID-19 Leave Support Scheme

If an employee cannot work from home while self-isolating, you may be able to apply for financial support so they can continue to get paid.

The Leave Support Scheme is paid as a 2 week lump sum at the rate of:

  • $600 a week for full-time employees
  • $359 a week for part-time employees

You cannot get the Wage Subsidy August 2021, Leave Support Scheme and Short-Term Absence Payment for the same employee at the same time.

If an employee is awaiting the result of a COVID-19 rest

COVID-19 Short-Term Absence Payment

The Short-Term Absence Payment is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here

Kiwi Business Boost Tool

The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.

The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.

Business Support and Advisory

Your most precious resource is your time. So if you want to find more ways to save time and focus on building a thriving business, get in touch with our advisors today!

Check our latest article on How to be Cashflow Confident – click here.

Weekly Digest – 17 September 2021

Weekly Digest – 17 September 2021

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

Auckland Lockdown Extended

On Monday Prime Minister Jacinda Ardern announced the decision to extend the lockdown in Auckland until 21 September, allowing for at least another week to help eliminate the small delta variant outbreaks.

Cabinet will review the nation’s pandemic settings on Monday 20 September, having agreed in principle to move Auckland down to alert level 3 from midnight Tuesday 21 September.   From there, Auckland may see restrictions ease slightly but offices, schools, and public venues will remain shut. The government has also purchased 500,000 doses of Pfizer’s COVID-19 vaccine from Denmark

NZ Super Fund Posts Record Returns

The NZ Super Fund has reported its strongest ever investment return, as it grew by $15 billion or 29.63% in the last financial year, reaching $59.8 billion. However, its chief executive, Matt Whineray​, warned the fund’s strong short-term performance was likely to be affected by increased inflation and rising interest rates.

COVID Support for Businesses Amid Level 4 Lockdown

Businesses impacted financially by this lockdown are being offered a range of support measures. You can find information on the COVID-19 website detailing the support available, or there’s a recap below.

If your business has to close temporarily or reduce opening hours

COVID-19 Wage Subsidy

If your business cannot operate because of Alert Level 4 restrictions or you will lose revenue, you can apply for the COVID-19 Wage Subsidy scheme to help keep paying your staff and protect jobs.

Businesses and self-employed people must expect a 40% drop in revenue to be eligible to receive the wage subsidy.

The wage subsidy is paid in a 2 week lump sum. You can get:

  • $600 per week for each full-time employee
  • $359 per week for each part-time worker retained.

As an employer you must pass on the full wage subsidy to your employee. If the wage subsidy is more than your employee’s pay, you can continue to pay them at their normal rate.

Wage Subsidy 2021 #2 Update

The Wage Subsidy currently only applies to those businesses operating under Level 4 or Level 3 restrictions. This means generally anyone outside of the Auckland borders cannot and should not apply for this round of Wage Subsidy (at this stage).
If you have applied and received the subsidy (done before the move to Level 2) then you will need to consider and ensure that

  1. your revenue does in fact drop by 40% for the 2 weeks from 31 August to 13 September and
  2. it is attributable to the time spent at level 3 and/or any direct knock-on effect of Auckland remaining at level 4.

Get in touch with us if you have any questions. Book a call here.

Find out more about the Leave Support Scheme on the Work and Income website.

COVID-19 Resurgence Support Payment

The COVID-19 Resurgence Support Payment helps cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.

To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.

You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.
The maximum payment is $21,500.

If you’re a sole trader, you can receive a payment of up to $1,900.

Applications for the COVID-19 Resurgence Support Payment are now open. You need to apply through Inland Revenue. Businesses anywhere in New Zealand can apply if they meet the eligibility criteria.

Find out more information about the COVID-19 Resurgence Support Payment and how to apply here.

If your business has reduced revenue

Small Business Cashflow Loan Scheme

If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan where you can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business.

  • When applying for the loan, you need to be able to declare that your business is viable.
  • Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year.
  • Applications are open until 31 December 2023 through myIR. If your business does not have a myIR account, you will need to create one to apply.

Loans will be interest free if they are paid back within 2 years. The interest rate is 3% for a maximum term of 5 years.

IRD tax assistance

If you’re finding it hard to meet your tax obligations, Inland Revenue may be able to help. Get in touch with us if you have any questions.

Insolvency relief

The COVID-19 Business Debt Hibernation scheme allows businesses to get a month’s protection while they talk to their creditors.

If an employee needs to self isolate

COVID-19 Leave Support Scheme

If an employee cannot work from home while self-isolating, you may be able to apply for financial support so they can continue to get paid.

The Leave Support Scheme is paid as a 2 week lump sum at the rate of:

  • $600 a week for full-time employees
  • $359 a week for part-time employees

You cannot get the Wage Subsidy August 2021, Leave Support Scheme and Short-Term Absence Payment for the same employee at the same time.

If an employee is awaiting the result of a COVID-19 rest

COVID-19 Short-Term Absence Payment

The Short-Term Absence Payment is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here

Kiwi Business Boost Tool

The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.

The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.

Training Incentive Allowance

The Training Incentive Allowance can help with tuition fees, books, childcare, equipment, transport and any additional caring costs while studying. It’s available for courses at levels 1-7 of the NZ Qualifications Framework. Visit the Work and Income website to find out who’s eligible, how much you can get and who can apply.

How Business Leaders Can Prevent the “Great Resignation”

The pandemic has turned our lives upside down, and many of us are responding by making significant changes in our personal and professional lives. With people becoming increasingly confident that they can find better work, the “Great Resignation” has ensued.

This Forbes article outlines some ways employers can stop the mass exodus:

  • Listen and learn. Gauge your employees’ well-being. Check how they’re doing on a regular basis and find out what they need for personal and professional growth.
  • Coach to mitigate burnout. Many people leave their jobs because of burnout. So review your wellness benefits or consider adding more. You might also want to identify at-risk staff and offer mental health hours to step away from work.
  • Invest in flexibility. It might not be easy for small businesses to provide extremely high pay, but you can at least offer work flexibility. If you can ease up on conventional standards of when and where your employees work, they are more likely to stay.

In a nutshell, it boils down to one thing: put your people first. If you need more focused business advice, get in touch with us today and let’s work out a plan!

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

Lockdown leave, pay cuts, reduced hours: what’s allowed?

Lockdown leave, pay cuts, reduced hours: what’s allowed?

We’ve been getting quite a few questions from our clients during Level 4 lockdown about the responsibilities of employers. We’re not HR specialists or employment lawyers, so we don’t have all the answers. Luckily, the Ministry for Business Innovation and Employment (MBIE) has been busy setting out all the information you need.

Two of the most commonly asked questions are:

1. Can I make employees take annual leave during lockdown?

The short answer here is no. You can talk to your employees and try to come to an agreement about how their annual leave might be applied during lockdown, but you can’t make them take annual leave starting immediately. The only time you can make an employee take annual leave is when an agreement cannot be reached about when the annual leave will be taken – and you must give them at least 14 days’ notice. Get all the details here.

2. Can I make employees take a pay cut during lockdown?

Again, the short answer is no. You can negotiate for a change in pay, hours or duties, but you need to reach an agreement with the employee. It must be set out in writing and the employee needs time to consider the new arrangement.

Remember, you can apply for the wage subsidy or other financial support if your business revenue is suffering under lockdown. Read more about your options here.

Where to find more information

The Employment website, provided by MBIE, lets you navigate all your responsibilities as an employer during lockdown. For instance:

If you’re concerned about your business’s finances during this time, we can help you identify what help you might be entitled to and apply on your behalf, so give us a call – we’re here to help!

The perfect time for business planning?

The perfect time for business planning?

Being in lockdown is frustrating, but what if there was a perfect time for business planning?

 

Business planning constantly gets bumped to the bottom of the to-do list. It never feels urgent, especially when sales are strong and you’re dealing with challenges like finding new staff or product shortages.

 

However, a business plan can really pay dividends in the long run. It can not only be a fantastic decision-making tool, but it can also help you get your priorities in order. What do you really want from your business in the long run, and how can you achieve that?

 

Setting goals takes a lot of thinking

Pared back to its essentials, a business plan identifies:

 

  1. Your goals – what you want and when you want it by
  2. How do you plan to achieve those goals
 
Don’t be fooled by how simple this looks.

 

It can be pretty soul-searching to work out what your goals are as a business owner because they’re not simply related to growth and market share. They’re also about your personal goals – do you want more money or more time? Do you want to step up, or step back? From a business perspective, you need to think about whether to expand your products or services or become more profitable within your existing specialty area?

 

If you don’t manage to do any other business planning, simply thinking about your goals and jotting down a few on paper can crystallise your ideas – giving you valuable insights into which direction to take next.


A plan for achievement

Once you have goals in place, figuring out how to achieve these usually requires a multi-faceted approach. It will include some or all of the following:

 

  • Reviewing current and potential products and services.
  • Pricing, target market and competitor comparisons.
  • Sales and marketing.
  • Assets and equipment.
  • Systems, automation and outsourcing.
  • Financial forecasts.
  • Cash flow forecasts.
  • Possible funding for investment.
  • Your team.


Give us a call

We love talking to business owners about how to achieve their goals – seeing our clients succeed is one of the most rewarding parts of this job. We can run the numbers on various scenarios, do a cost-benefit analysis, cash flow forecasts, and ideas for growth.

 

Give us a call, we can help.

 

Alert Level Rules: What They Mean and How to Use Them

Alert Level Rules: What They Mean and How to Use Them

Although we have been here before, it can be hard to remember the rules on operating businesses at the different alert levels.
The Ministry of Business, Innovation and Employment’s website has a useful guidance table for businesses at Alert levels 2, 3 and 4.
Familiarise yourself with the rules now, so that you can be ready with a plan for a change in Alert Level. Visit the MBIE site here.


While level 4 lockdown prevents most businesses from operating, businesses can sell essential non-food consumer products at Alert Level 4, as long as they’re sold online with contactless ordering payment and delivery.

For more information on operating your business at Level 4 visit the COVID-19 website.

COVID-19 Tax relief for donations of trading stock

If you are donating trading stock to an approved donee, such as a registered charity or public authority, you may qualify for an income tax deduction. 

The legislation applies to stock donated between (and including) March 17, 2020, and March 16, 2022. The change provides temporary relief from an anti-avoidance rule. Talk to us about how this may affect your business.

Talk to us, we are here to help​

If you are struggling to meet compliance obligations due to Covid 19, there are options. We can give you guidance on support schemes, assist with planning and we can talk to the IRD on your behalf. Talk to us early so we can help you plan.

 

New Zealand business Covid 19 Relief Options Update

New Zealand business Covid 19 Relief Options Update

COVID-19 Business Relief Options announced by the Government have recently been extended for any New Zealand business that is currently facing a financial hardship.

Read on to find out what relief option your business might qualify for.

N.B. Wages Subsidies are now closed

Insolvency relief for companies impacted by COVID-19

The Government introduced new legislation to make changes to the Companies Act to help businesses facing insolvency due to COVID-19 to remain viable, with the aim of keeping New Zealanders in jobs.

COVID-19 New Zealand Business Finance Guarantee Scheme

The Government launched a Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy.

The Crown, in partnership with participating approved banks, will support targeted new loans (including increases to existing limits) to eligible businesses, as a response to difficulties caused by COVID-19.

Under the scheme, New Zealand businesses with annual revenue up to $200m can apply to their banks for loans up to $5,000,000, for up to five years.

The length of time should help New Zealand business to plan for the longer-term without huge financial pressure.

The scheme is open for applications until 31 December 2020

Key information

The purpose of these loans is to help New Zealand businesses facing hardship as a consequence of COVID-19 to do one or more of the following:

  • To respond to the impacts of COVID-19;
  • To position themselves for recovery from the impacts of COVID-19; or
  • To recover from the impacts of COVID-19.
  • Maximum loan per eligible business up to $5,000,000.
  • The loan is for a maximum of 5 years and must be repaid over this time period.
  • Please note this is a loan and will add to the costs of running your business. As with any other loan, you remain responsible for repaying 100% of the loan and interest. You should not apply for an amount that you cannot afford to repay.

The New Zealand Business Finance Guarantee Scheme cannot be used for

  • Distribution of dividends or on-lending outside the customer’s guaranteeing group
  • Refinancing more than 20% of your existing debt with us. There are certain exceptions to the 20% limit

Industry exclusions

New Zealand Business Finance Guarantee Scheme Loans are not available to:

  • a local authority, a council-controlled organisation or a council organisation for the purposes of the Local Government Act 2002; or
  • anyone who is classified by us in the follow categories: residential property investor or developer and commercial property investor or developer.
  • The manufacture or distribution of recreational cannabis
  • The processing of whale meat
  • The manufacture of cluster munitions, anti-personnel mines, tobacco, and civilian automatic and semi-automatic firearms, magazines or parts
  • The manufacture or testing of nuclear explosive devices
  • Any activity which is illegal in New Zealand

Want help with making an application?  Drop us a line : murray@insightca.nz

Looking for Business Support?  Check out:  Insight CA Better Business Program

Are you working ‘on’ your business or ‘in’ your business?

Are you working ‘on’ your business or ‘in’ your business?

Are you trying to do everything by yourself? How much of what you do could be done by someone else, so that you can focus on your core business activity?

As small business owners we often think we can, or should, do it all ourselves. We have to, right? Often there isn’t a dedicated role or team within our business for each function. Although we sometimes get away with wearing many hats, right now what we actually need to be concentrating on is our core business activity.

The next 6-12 weeks are crucial for the survival of a business, so a lot of these other adjuncts like accounting and marketing have to be, or should be, outsourced so you can focus on getting your business through.

If you want to start working ‘on’, not ‘in’ your business, reach out for a no obligation call or visit our website to find out more about our CFO program.

Have you updated your business plan, taking into account the adjustment with COVID-19?

Have you updated your business plan, taking into account the adjustment with COVID-19?

Have you updated your business plan, taking into account the adjustment with COVID-19? While you might have had sales at 100% of anticipation, now you might be putting a Risk component into it. So what happens if we only do 50% of sales? Or 70%? What’s that going to do to 1) profitability 2) liquidity?

Think about:

  • Where are you now?
  • How has Covid-19 adjusted the plan you had, and where you expected to be in the next 3-6 months?
  • If Covid-19 has adjusted your current position, and forecasted path, where do you want to be at a future date?
  • How will you get there?
Check out our article on Business Plans to help you get started.

Do you have a sounding board for your business?

Do you have a sounding board for your business?

A sounding board for your business can make a huge difference to how your business performs because it’ll give independent (and objective) input into how things are going.

Would you value an independent, trusted advisor to discuss the burning issues and opportunities that are keeping you awake at night?

Having someone you trust that you can discuss issues with during times of uncertainty is vital to help develop ideas, solutions, share the load, and reduce stress.

If you’re wondering how to achieve your desired work outcomes to gain the lifestyle you want find out how Insight CA can help

 

How confident are you going forward?

How confident are you going forward?

The next 13 weeks is the vital part of coming out of Covid-19. One of the things I am working with my clients on right now is a daily cash flow plan for the next 13 weeks.

So, here’s a quick tip:

By doing it on a daily basis, as opposed to monthly, this will actually show you where you’re getting tight on cash, and where you might be able to move things around.

Have someone go through at the end of each week, recording the actuals against your expected sales and expenditure, so you can see what is actually happening.

If you’re wondering how to take control of your financial situation right now, and in the coming weeks, one of the services we offer at Insight CA (Auckland) is Financial Awareness Coaching.

Reach out for a no obligation conversation, or visit our website to find out more information about how our coaching service can give you confidence through understanding.