Covid 19 - important updates
Updated: Oct 9, 2020
The Covid-19 pandemic is now very real with the enforced lockown looming. We are hearing about businesses who are rushed off their feet and others in dire circumstances. We are here to help.
With the increased risk we have now moved to working remotely so your best way of contacting us is via email and we will contact you back as soon as possible.
This has now ben widened due to the further restrictions announced. In addition to seeing the reduction in turnover you also need to have taken steps to mitigate the effects of Covid-19 and sought assistance from your bank. You must make best efforts to retain employees and pay them a minimum of 80% of their normal income for the subsidised period (12 weeks per employee) Further details are being released to ensure everyone is covered in this newly announced level 4 status.
We have just had clarification:
The wage subsidy and leave payments are NOT subject to GST - an Order in Council is being drafted to treat it as exempt (Section 5(6E)(B)(iii GST Act)
The wage subsidy and leave payments are excluded income under section CX 47 of the Income Tax Act 2007.
The payments made to employees ARE taxable and subject to PAYE, KiwiSaver etc in normal way.
For applications and application updates: https://services.workandincome.govt.nz/ess/employer_applications/new https://www.nzbn.govt.nz/ https://www.employment.govt.nz/about/news-and-updates/workplace-response-coronavirus-covid-19/
In these unprecedented times, holding on to cash will be a top priority for most businesses.
The IRD concession is not available for terminal tax payments relating to the 2019 tax year. If you’ve got the ability to pay, you must pay IRD is adamant the remission of UOMI is only for taxpayers experiencing hardship who have exhausted all other options. For upcoming tax obligations on 28 March 2020, 7 April 2020 and 7 May 2020, if you are unable to pay we recommend either making an arrangement with IRD or purchasing tax credits with TMNZ. who are offering a limited time rate (3.95%), but you must set up the Tax Finance arrangement ahead of the due date. Please contact us urgently if you would like us to arrange this or if we can help in making an arrangement with IRD. Bank Assistance
You all need to make a plan and may need to contact your bank to look at debt structures, business and personal. You should attempt to move terms to interest only and look at what the bank can do around interest rates. Mortgage holidays may be required if income has ceased and you hold no cash reserves. There will be more announcements coming from the Reserve Bank in the coming days.
We are all in this together
Instead of ‘social distancing’ let’s aim for ‘physical distancing’ - to emphasise we need to stay connected. Take care, be brave, be kind, be creative, look after yourselves and those around you and reach out if you are struggling. Let us know if we can help.
Stay updated and check in with the Grace Accounting Team | Tauranga Accountants who are on hand with professional advice and expertise