Assistance and support information for small and medium-sized businesses.
There’s a range of COVID-19 financial support available to small and medium businesses, depending on your situation. Below is more about each type of support and where you can find more information. Businesses across the play, active recreation and sport sector will be eligible for this support if they meet the criteria for each initiative.
- COVID-19 Helpline for business advice
- Wage subsidy extension, leave support, income relief payment
- Small business cash flow loan scheme
- Support for commercial tenants and landlords
- RBP: business advice and consultancy support
- Business debt hibernation
- Business finance guarantee scheme
- Tax and ACC support
COVID-19 helpline for business advice
The current business environment is full of information. The COVID-19 Business Helpline can help - free for all businesses to call – whether you have questions around the Wage Subsidy extension, accounting treatment of the original Wage Subsidy, the Small Business Cashflow Loan Scheme, business cashflow and tax measures, business debt hibernation.
Or your query may be around restructuring, downsizing, or redundancy processes, health and safety requirements or even help with business continuity and planning for the future. Even if you would just like a sounding board – give the Helpline a call, it’s run by the BusinessNZ network.
0800 500 362 - FREE for all businesses.
New: Resurgence wage subsidy update
The Government has announced a new payment, the Resurgence Wage Subsidy. It’s a two-week payment open from 21 August 2020 to 3 September 2020, for all businesses who meet the criteria, and aren’t receiving the Wage Subsidy or Wage Subsidy Extension. See more on Work and Income’s COVID-19 support page.
The current Wage Subsidy Extension is still available – and open until 1 September for eligible businesses. Businesses that haven’t yet accessed that scheme should reassess if they now meet the current criteria, following the recent increase in alert levels. See more on Work and Income’s COVID-19 support page.
New: Simplified leave support payment
The COVID-19 Leave Support Scheme provides a payment to businesses to pay their workers who need to take leave due to COVID-19 public health guidance. This will be available from 1 pm 21 August. The revenue test will no longer apply. See more on Work and Income’s COVID-19 support page.
Income relief payment
Support is available for people who lose their jobs. If you lose your job (including if you are self-employed) from 1 March 2020 to 30 October 2020 due to COVID-19, you may be able to receive the COVID-19 Income Relief Payment. Find out if you’re eligible and how to apply at Work and Income. See more on Work and Income’s COVID-19 support page.
Small business cashflow scheme
Government will provide one-off loans to small businesses, including sole traders and the self-employed, impacted by COVID-19 to support their cash flow needs.
The small business cash flow loan scheme will provide assistance of up to $100,000 to businesses employing 50 or fewer full-time employees.
Details of the loans include:
- $10,000 to be provided to eligible businesses
- an additional $1800 per equivalent full-time employee
- interest free if the loan is paid back within a year
- an interest rate of 3% for a maximum term of five years
- repayments not required for the first two years.
Applications have been extended until and including 31 December 2020. To get an indication of your eligibility, use the business.govt.nz SBCS eligibility tool. For a full list of detailed criteria, visit Inland Revenue.
Support for commercial tenants and landlords
The timeframes required before landlords can cancel leases, and in which mortgagees can exercise their rights to sale or repossession, are being extended.
These changes would still allow landlords to cancel leases and mortgagees to exercise their powers, but they would allow for more time for breaches or defaults to be remedied. The changes aim to support commercial landlords, tenants and borrowers through the COVID-19 situation. They provide relief for businesses, to help them stay solvent through the pandemic, which will help New Zealand’s economic recovery. They are part of a wider government package of business support. For more Guidance for commercial leases and mortgages during COVID-19 see here.
Business debt hibernation
Business debt hibernation is a government initiative created in response to COVID-19. It helps companies, trusts, and other business entities affected by COVID-19 to manage their debts.
If business debt hibernation is right for your business, this is how it helps you manage your debts.
- You set up an arrangement for your existing debts, eg paying your creditors only a percentage of what you owe them on time and delaying the rest.
- You get up to a month of protection while you set up the arrangement, meaning most creditors can’t enforce their debts, eg applying for your business to be liquidated.
- If your creditors agree, you get a further six months of protection.
Use the business debt hibernation decision tool to find out if it’s a good option for your business and if so, how to get started. See more here: COVID-19: Business debt hibernation
Business finance guarantee scheme
Small and medium-sized businesses may be eligible for the business finance guarantee scheme to support operating cash flow disrupted due to COVID-19. Participating banks can provide new loans, increased limits to existing loans or a revolving credit facility to eligible businesses.
The scheme supports banks to take on lending by government taking on the default risk of up to 80% of the loan. Lending decisions are made by banks. Borrowers are still liable to pay the loan back in the usual way. See more here: Business Finance Guarantee scheme
IRD tax support
Many businesses and organisations will have changed the way they operate to respond to the challenge of COVID-19. There are new measures designed to help businesses and their employees deal with the COVID-19 outbreak. If you’re having difficulties meeting your tax obligations due to COVID-19, Inland Revenue has various support schemes and options to help.
See more here: https://www.ird.govt.nz/covid-19/business-and-organisations
A tax loss carry-back scheme
A temporary loss carry-back scheme has been introduced to support customers in the current uncertain economic environment.
Businesses expecting to make a loss in either the 2020 year or the 2021 year can use that loss to offset profits they made the year before. In other words, they can carry the loss back one year to the preceding income year. This can be done before the loss year return is filed.
You must let IRD know if you are going to use the loss carry-back scheme. You can do this in the ‘I want to’ section of your income tax account in myIR.
There are two ways to claim your loss carry-back:
- Include the carried back loss in your tax return – we will automatically refund any overpaid tax.
- Ask for a refund of any provisional tax you have paid for 2020 if you are going to carry back a loss from 2021.
IRD can refund some or all of the tax already paid for the preceding year before the loss year has finished by enabling customers to estimate their loss. Refunds will be processed a lot faster if you use myIR. More information can be found here https://www.ird.govt.nz/covid-19/business-and-organisations/temporary-loss-carry-back-scheme
ACC levy invoices for the 20/21 financial year would usually have been sent from 1 July, but will now be sent in October. ACC has more information about delayed invoices and guidance to help. See more here: Easing the COVID-19 burden on businesses
If you are having trouble making ACC payments, ACC has guidance to help. If you are no longer in business, it’s also a good idea to let ACC know. See more here: General COVID-19 information for businesses