Depreciation Changes

These changes apply to all taxpayers, whether affected by Covid-19 or not. The low value asset threshold has been increased from $500 to $5,000 BUT only until 16 March 2021. From 17 March 2021, the threshold will drop to $1000, so now is the time to buy those assets costing less than $5000.

It is also now possible to claim depreciation on industrial and commercial buildings, however, we strongly recommend that you talk to your tax advisor first.

Covid-19 Small Business Cashflow Loan Scheme

The closing date for applications has been extended until 31 December 2023. The terms have improved for new and existing loans, with the loan period being extended to 5 years and no interest payable if the loan is fully repaid within 2 years. The eligibility criteria have also changed, but include being able to provide evidence that the business is viable, and has experienced at least a 30% Covid-related drop in revenue in any 14 day period in the last 6 months, compared with same 14 day period a year ago. (Other period options for those affected by Covid in the comparative period or those who haven’t been in business for a year). The loan is a base amount of $10,000 plus $1,800 for each full-time-equivalent employee (FTE) and carries interest at 3% from the date of the advance (if not repaid within the 2 years.) If a loan is fully repaid by end of 2023, one further loan can be drawn down if eligibility criteria met at time of application.

Business Finance Guarantee Scheme

Although these loans are advanced through the banks, they are 80% guaranteed by the Government, with a maximum term of 5 years. However, it is the bank’s decision whether, how much and under what terms they will lend funds. Applications close 30 June 2021.

Covid-19 Leave Support Scheme

Available to both employers and self employed, this can help pay workers who have been advised to self isolate and can’t work from home. It is paid at a flat rate of $585.80 per week for those who were working more than 20 hours per week and $350.00 for part-timers, and is for 2 weeks only. It is repayable to the extent not utilised. The criteria are quite strict, so check with your advisor.

Covid-19 Short-Term Absence Payment (STAP)

To cover those workers and self-employed, who are at home awaiting Covid-19 test results and can’t work from home, a one-off payment of $350 for each eligible worker applies to tests taken from 9 February 2021.

Covid-19 Wages Subsidy

Although this is not available currently, the scheme will be in place if there is an escalation to Alert Levels 3 or 4 anywhere in NZ, for 7 days or more.

Covid-19 Resurgence Support Payment

If there is an escalation from Level 1 to Level 2 or above, a directly impacted business (with a revenue reduction of at least 30% over a 14-day period) will be able to apply for a one-off payment to support fixed costs such as rent and wages. There is a core amount of $1500 per business plus $400 per employee up to a maximum of 50 FTEs. This payment is still awaiting legislation, but if required, will be paid retrospectively once the legislation is in place.

As any data provided in the applications may be subject to audit , records must be maintained to subtantiate that you meet the eligibility criteria. We recommend you contact your accountant or advisor prior to applying..