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
- your revenue does in fact drop by 40% for the 2 weeks from 31 August to 13 September and
- 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.
