Got staff?  Wage subsidy applications close 1 September 2020 at 11.59 pm.

Low-interest loans from the government

Small Business Cashflow (Loan) Scheme

 

What it is: Low-interest one-off loan of up to $10,000 + $1,800 for each full-time equivalent employee.

  • 3% interest rate
  • repay over 5 years
  • no payments in the first 2 years — but you can choose to make payments
  • payments handled by Inland Revenue.

No interest charged if you pay back the loan within a year.

Who can get it:

Smaller businesses struggling financially due to the COVID-19 pandemic, including:

  • businesses with up 50 employees
  • sole traders
  • self-employed people.

As with any loan, you must also be able to show you can pay it back. Your business needs to be viable, with a plan to stay that way.

Deadline to apply: 31 December 2020

How to apply: On the Inland Revenue website, using your myIR account.

Small Business (Loan) Cashflow Scheme  — Inland Revenue

Also consider: Borrowing money or getting credit from a bank taking part in the Business Finance Guarantee scheme for small and medium-size businesses.

Business Finance Guarantee scheme — Treasury


Tax refunds

What it is: A way to pay less tax if your business made a profit in the 2019/20 tax year, but expects to lose money due to the impact of the COVID-19 pandemic. Inland Revenue (IR) will carry the expected loss back to the 2019/20 tax year, reducing your tax to pay on profits already made.

Who can get it: Businesses that:

  • ended the 2019 tax year in profit (usually 1 April 2019 to 31 March 2020)
  • expect to make a loss in the 2020 tax year or 2021 tax year due to the impact of the COVID-19 pandemic.

Deadline to apply: It’s a good idea to tell IR you plan to do this as soon as possible. If you have already paid provisional tax for 2020, you may be eligible for a refund.

How to apply: You must tell IR you plan to use the loss carry-back scheme. It’s easiest to do this online via myIR, using the “I want to” section.

For more detail on how to use the carry-back scheme, see the IR website:

Temporary loss carry-back scheme — Inland Revenue

Also consider: Inland Revenue’s cash flow and tax relief measures to help businesses as they recover.

COVID-19 Businesses and organisations  — Inland Revenue


Wage subsidy extension applications closing soon

What it is: Payments to help cover wages or salaries, open for applications from 10 June to 1 September 2020. It’s an extension of original wage subsidy scheme, announced as New Zealand went into Level 4 lockdown.

Who can get it: Businesses and self-employed people still financially impacted by the COVID-19 pandemic. You must have a minimum 40% decline in revenue over a 30-day period within 40 days before you apply for the extension.

All business types that meet the financial criteria are eligible, including:

  • businesses with employees
  • sole traders
  • contractors
  • self-employed people
  • registered charities.

Who can get it — Work and Income

Deadline to apply: 11.59 pm on 1 September 2020

How to apply: Use the online form on the Work and Income website. You’ll need your NZBN, the IRD numbers of your business and any employees, plus other details.

  • If you received the original 12-week subsidy for your worker(s) or yourself, you need to apply again for the extension.
  • If you haven’t applied for the wage subsidy before, you can apply for the extension.

Apply for the wage subsidy extension — Work and Income

Also consider: Leave support payments if an employee cannot work due to COVID-19 public health guidance.

COVID-19 Leave Support Scheme — Work and Income

Payments for employers with first or second-year apprentices to help cover wages. For each eligible apprentice, employers can claim $500 to $1,000 a month from August 2020 to April 2022.

Apprenticeship Boost Initiative — Work and Income


Income relief payments

What it is: Up to 12 weeks of payments to help with living costs after sudden job loss during the COVID-19 pandemic. If eligible, you will get $250 or $490 a week depending on the number of hours you previously worked.

Who can get it: You may be eligible if you lose your job between 1 March and 30 October 2020. This includes:

  • employees
  • contractors
  • self-employed people.

Before losing your job, you must have been employed for at least 12 weeks and have worked an average of at least 15 hours a week.

Deadline to apply: 13 November 2020

How to apply: Check full eligibility criteria on the Work and Income website.

Income relief payments — Work and Income


Help with commercial lease disputes

What is it: Temporary law changes and subsidies for arbitration/mediation to help commercial tenants and landlords share the financial impact of COVID-19.

Law changes backdated to 1 April 2020 include:

  • More time for commercial tenants to catch up on overdue rent.
  • Longer notice period for cancelling a lease because of overdue rent, up from 10 working days to 30 working days.
  • More time for mortgage borrowers, including landlords, to catch up on overdue mortgage payments.

Details of the subsidised arbitration/mediation are still being finalised. The service is likely to be available from late September.

Who it’s for: The law changes aim to help:

  • commercial tenants temporarily having difficulty paying rent and other bills
  • their landlords who, in turn, find it hard to make mortgage payments.

Next steps: Landlords and tenants should work together to agree a solution. If you cannot agree, it’s a good idea to get legal advice. Mediation or arbitration is another option — try the New Zealand Dispute Resolution Centre (NZDRC). You can register for subsidised arbitration on the NZDRC website.

Guidance for commercial property settlements — Ministry of Justice

COVID-19 lease disputes — New Zealand Dispute Resolution Centre


Business debt hibernation

What it is: Support to place existing debts on hold for up to seven months. This involves agreeing a new repayment plan with your creditors, eg reduced payments or delaying payments.

You also get government protection against creditors taking insolvency action against you for:

  • 1 month while you agree a new repayment plan
  • 6 months after agreeing new repayments.

You must still repay your debts in full.

Who can get it: Businesses and other organisations with both:

  • existing debt
  • reduced income due to the COVID-19 pandemic.

Eligible business types include:

  • companies
  • partnerships
  • trusts
  • societies.

Deadline to apply: No official deadline. But it’s important to notify the Companies Office and start talking to your creditors as soon as possible.

How to apply: Fill out the relevant form and send it to the Companies Office. Begin negotiating with your creditors — at least half must agree.

For more information, links to forms, and an online tool to check if you are eligible, check out our page on debt hibernation:

Business debt hibernation

Also consider: Support available to businesses at risk of insolvency due to COVID-19, or facing difficulties complying with their legal obligations.

Law changes to help businesses — Companies Office

 

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