COVID-19 Advice and Information
Tēnā koutou e hoa mā,
This is a commentary / explanation of the Government Support for businesses, regarding Covid-19.
Please also see my instructions for applying for the subsidies, and other resources.
I would like to acknowledge that this will be a very stressful time for many small-business owners. Each of us will be affected differently, with some experiencing instantaneous declines in sales, while others may feel it down the track depending on how deeply the economy is impacted. I’ll be doing everything I can at my end to support anyone who is affected.
As many of you will be aware, the government has announced a range of measures to support business during this time. The most short term of these are the Wage Subsidy and the Leave Payment. These are available to self-employed people who have no staff other than themselves.
- Lump sum payment for 12 weeks at $585.80 (full time) or $350 (part time) weekly.
- You need to show a 30% decline in turnover vs. the same period last year. If your business is new or changed, they accept projected earnings in some circumstances.
- You must have taken active steps to mitigate the impact of Covid-19. In my understanding currently, that just means that you are acting sensibly and responsibly with regards to working without increasing the risk to customers or others. Further ideas are in the last link below.
- Sole Traders and Partnerships no longer need to apply for an NZBN before applying.
- For people who need to self-isolate as per Ministry of Health guidelines, or who are sick with Covid-19 or are caring for someone who is.
- Does not apply if you are able to work from home etc.
- 8 weeks at a time, same rates as above.
- There are some qualifications – e.g., if you are self employed, you must be earning at least the equivalent of the minimum wage.
The mechanics for applying for these are very simple. You apply online via the Work & Income website, and it is a short application process. The website says that they will contact you if they require further information once you have submitted it.
From an accounting point of view, there are a few things to be aware of;
- Your workings with regard to the 30% decline need to be recorded carefully, and saved in case they come back later asking for further verification – it appears that they may not be checking them in detail initially.
- There may be a delay for the effect to take hold and for the decline to show in your accounts. For some it will be obvious straight away, others may have to monitor their figures over the next few months to see if they qualify.
If anyone is requesting assistance from their accountant, if you usually complete your Xero reconciling and invoicing yourself, it would be best if this is up to date so we can go straight to the metrics we need.
Please also remember that if your business is affected and you qualify for Working for Families, you can estimate your income down accordingly for the coming year to raise WFF payments. They like this info to come via secure message from your tax agent, so if you contact me with your revised income figures I can communicate this to Inland Revenue.
This will be a busy time for government departments, and I am unsure how the processing times will be. As always, the earlier the application is made the better, once you have the necessary details.
Numbersmith will be working through any requests for support as quickly as possible, with priority given to those who are the worst affected. As always, your patience and understanding is appreciated.
There have been a number of tax changes announced too, which are slightly longer-term but reasonably significant. The details of these will be the subject of another email.
If you have any questions or requests regarding the Wage Subsidy, Leave Payments or anything else, please let me know.