In this article we have the latest and most relevant Covid-19 related information. We’ll continually update it as the situation progresses, outlining what these changes mean for you. Make sure to check back regularly to stay up to date, and don’t hesitate to get in touch if you have any questions.
Our team is still working online, and available to respond to emails and requests, but we are expecting a high volume of communication, so we ask for some patience as we expect a higher volume of customer requests.
We currently have two helpful videos available over in the Sidekick Business Lounge, which were both recorded since the lockdown announcement. The first is an update from Ric where he talks about how to get your Xero up to date, code up your statements, reconcile your bank and engage really well with your suppliers (available to watch below). In the second video Ric is joined by Matt Vaughn from MV Corporate Health where they discuss wellness throughout lockdown.
For the meantime, we have a few tips to help keep things moving steadily and to minimise disruption:
Get your Xero Ledger up to speed.
Check what bills you’ve got to pay in the upcoming weeks. It’s good to have an awareness of what payments are coming up, so you can plan accordingly.
It may also be a good time to review your financial situation. We can help with this, but take a look at how things stand and if you’ll need to apply for the wage subsidy.
It’s also good to think about suppliers and customers. There may be some disruptions to the supply chain – so now may be a good time to touch base with your contacts.
Financial Support Update:
- The Wage Subsidy Scheme (WSS). This payment will be available nationally to help eligible businesses continue paying staff and protecting jobs. To reflect increased wage costs, the payments have been increased to $600 for full-time employees and to $359 for part-time employees. This will be open to applications from 9am on Friday 20 August 2021, with applications initially open for two weeks. For more information on the WSS, click here
- The Resurgence Support Payment (RSP). This payment will be available to any business or organisation in New Zealand that experiences at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to a COVID-19 alert level increase of level 2 or higher. This will be open to applications from 8am on Tuesday 24 August 2021 and will be available until one month after a nationwide return to Alert Level 1. The becomes available from 8am of the 24th. For more information on the RSP, click here
- The Leave Support Scheme (LSS). This payment provides a two-week lump sum payment of either $585.80 per week for full-time workers or $350 per week for part-time workers who must self-isolate and cannot work from home. The rates increase to either $600 per week for full-time workers or $359 per week for part-time workers from Tuesday 24 August 2021. For more information on the LSS, click here
- The Short-Term Absence Payment (STAP). This payment provides a one-off (once per 30 days) payment of $350 for workers who must miss work due to a COVID-19 test and cannot work from home. The rate increases to $359 from Tuesday 24 August 2021. For more information on the STAP, click here
- The Small Business Cashflow Scheme (SBCS). This scheme supports small to medium businesses and organisations struggling with a loss of actual revenue due to COVID-19. Applications are open until 31 December 2023. For more information on the SBCS, click here
- All the above bullet points are sourced from the Inland Revenue Department, for more information visit their website
Sidekick Legal HR Update:
- If you qualify for the wage subsidy and apply for it, you need to remember that you cannot take any action with respect to restructuring and/or redundancy during the period you receive the subsidy.
- If you don’t qualify for the wage subsidy then you need to continue to pay your employees unless they explicitly agree to a variation in hours/remuneration. If that is the case then get them to confirm the variation in writing before you reduce hours/pay.
- If you cannot afford to pay your team but they agree to use accrued leave then you can pay them accrued leave for the period they agree to. You cannot force your employees to take this time as accrued leave, it can only be done by consent and agreement.
- If you do not qualify for the wage subsidy but cannot afford to continue paying your employees at full or reduced pay, and they don’t agree to a variation of their employment then we urge you to take some urgent legal advice about potential restructuring/redundancy options.
- We advise that you also keep records and evidence of loss of profits, such as cancelled job sheets, emails indicating that jobs are cancelled/deferred etc. This way you will readily be able to evidence the required loss of profits.
- Ric and Kirsten also recorded a video going through this, which is linked below:
Additional update from the Canterbury Employers’ Chamber of Commerce:
- All businesses must close to the public, unless they are a supermarket, pharmacy, dairy, or petrol station. Unlike last year, there appears to be no provision for the online sale of essential goods. We are seeking urgent clarification on this and will advise you of any changes as they are released.
- People are instructed to stay at home in their bubble other than for essential personal movement.
- Travel is severely limited.
- All gatherings are cancelled and all public venues are closed.
- Business premises are closed except for essential services.
- Educational facilities are closed.
- Safe recreational activity is allowed in your local area.
- If currently travelling, people have 48 hours to return to usual place of residence.
- New requirement (following today’s 1pm update) for masks to be worn for everyone over the age of 12 visiting essential services and when on public transport.
- Face coverings are also recommended to be worn while in public and indoor places where social distancing of 2 metres is not possible.
- Keep track of where you have been – the NZ COVID Tracer app is the best way to do this. Businesses also need to ensure that their QR code is prominently displayed if they are open.
- This section of the update is sourced from the Canterbury Employers’ Chamber of Commerce, so check out their website for more info.
Worrying about your tax payment for 28 August? TMNZ Tax Pooling update:
Tax pooling with TMNZ means you can pay income tax at a time that suits you, at a much lower interest cost than what IRD charges for unpaid tax and without incurring late payment penalties.
- How it can help: Tax pooling with TMNZ means you can pay income tax at a time or in a manner that suits you, at a much lower interest cost than what IRD charges for unpaid tax and without incurring late payment penalties. You may find the service useful if you are unable to pay your provisional or terminal tax on time (or if you have a better or more urgent use for those funds). That’s because tax pooling can be used to defer the full tax payment to a date of your choosing or pay what you owe in instalments.
- Can I trust this? As New Zealand’s leading tax pooling provider, TMNZ’s services are completely IRD approved. They are registered with IRD and operate under legislation set out in the Income Tax Act 2007 (sections RP17-RP21 and OB and OP) and Tax Administration Act 1994 (sections 124S-124X and 173M). Guardian Trust oversees all payments held in TMNZ’s tax pool account and the bank accounts into which payments are made. At no stage do they have access to your payments.
- Worrying about your tax payment for 28 August? Tax pooling with TMNZ means you can pay income tax at a time that suits you, at a much lower interest cost than what IRD charges for unpaid tax and without incurring late payment penalties.
- Who else uses tax pooling? Tax pooling is used by thousands of small and medium-sized businesses, accounting firms and New Zealand’s largest taxpayers. TMNZ maintain a close and long-standing relationship with IRD which means our clients are in the best of hands. TMNZ has helped more than 100,000 taxpayers with their provisional tax payments.
- A more flexible way to pay tax: TMNZ is a helpful cashflow solution because it enables you to choose how or when to make provisional or terminal tax payments. Pay what you want, when you want TMNZ’s Flexitax was designed to let you pay what you want, when you want. There are no set instalment amounts and you have up to 75 days past your terminal tax date to complete the arrangement with TMNZ. Paying this way can reduce IRD interest costs by up to 30 percent and eliminates late payment penalties.
- Instalments: You can pay your provisional tax liability in easy-to-set-up instalments. A set amount booked at a frequency of your choosing. As with Flexitax you can book instalments up to 75 days past your terminal tax date. This option will suit those with a consistent income and who would like their expenses to be spread accordingly.
- Deferred payment TMNZ offers a Tax Finance option. For an upfront fee you can choose a time in the future you wish to pay your tax liability. The upfront finance fee is much cheaper than most other traditional forms of finance. Tax finance suits those who have cashflow certainty and feel there is more to gain by being able to keep money in their business instead of paying income tax on IRD prescribed dates.
- For all options, acceptance is guaranteed
When dealing with a lockdown, it’s important to think about self preservation without being selfish. During these trying times, it’s ok to put yourself and your business first. We want you all to come out the other side as unscathed as possible. Please get in touch with any enquiries, we’re here to help.
Check back here for any updates as they come available. If you are unsure of anything, please make sure you contact your accountant.