Many NZ businesses have been affected by the recent Covid-19 Omicron outbreak, hot on the heels of Delta. We have summarised Government Support for businesses and contractors below.

There is a new Covid Support Payment available from IRD, for business which have suffered a 40% or more decline in revenue . There are initially three payments, with applications opening 28 February 2022, 14 March 2022 and 28 March 2022. Each fortnightly payment is $4,000 per business plus $400 per full-time equivalent employee, and payments are GST liable like the resurgence support payment. Applicants details may be published, so this will enable workers to find out if their employers have applied for the payment.

The first affected period is any 7-day period starting from 16 February 2022. The dates for the other two periods are yet to be announced. The calculation of revenue is using standard accounting principles. For cashflow businesses, this would be daily takings. For businesses that invoice clients, this would be the activity the business carries out and then bills the clients for.

The comparison period is a "typical 7-day revenue period in the 6 weeks between 5 January 2022 and 15 February 2022". If your business earns unevenly, then you can take an average of the 6 weeks and then choose the 7-day period that is closest to the average. If the business is abnormally busy in early January, or the business is closed in early January, then you can exclude those weeks. For instance, if you had a summer closure and reopened on 17 January, you could calculate trading revenue for 4 weeks and divide by 4, to find your average weekly revenue.

A NZ business (including sole traders) or organisation is eligible if was in business before 16 January 2022, is viable and ongoing and has taken reasonably practical steps to minimise the decline in revenue. For CSP, the Government has added Vaccine Certificate requirements for "regulated businesses": food and drink, close proximity, gyms and tertiary education providers.

Further information about eligibility is shown here: https://www.ird.govt.nz/covid-19/business-and-organisations/covid-19-support-payment/eligibility-for-the-csp

You can apply by signing into MyIR, select the "I want to..."and" tab and 'Apply for COVID-19 support payment' under COVID-19 support. Or we can apply on your behalf, provided we have the relevant revenue figures and employee details.

The LSS provides a weekly payment of $600 per week for full-time workers and $359 for part-time workers (under 20 hours a week), who must self-isolate and cannot work from home. Previously this was a two-week lump sum payment of either $585.80 per week for full-time workers, or $350 per week for part-time workers. More information is available on the MSD website.

The STAP provides a one-off (once per 30 days) $359 payment for workers including self-employed people who must miss work due to a COVID-19 test and cannot work from home. Previously this amount was $350. Further information is available on the MSD website.

Businesses are able to apply for a $10,000 top up to their existing loans from IRD from the end of March 2022. This means that businesses and organisations have until 31 December 2023 to apply for up to $20,000 plus $1,800 per full-time equivalent employee (up to 50 employees). The loan repayment period is five years and the first two years are interest free, then 3% per annum. The accrued interest on the initial loan has been written off, so that interest only starts at the beginning of year three.

Covid-19 tax relief applies only to taxes due after 14 February 2020.

If you are having difficulty paying taxes on time due to COVID-19, you can apply to IRD for an instalment arrangement, with or without a delayed payment start date. If your business or organisation has been affected by Covid-19 then no more interest and penalties will apply if you complete the arrangement by 7 April 2024.

In extreme cases, IRD will agree to a partial write off, or a full write off due to serious hardship. Generally an application under serious hardship will need to be accompanied by financial records, such as bank statements, creditors, debtors, cashflow forecasts; medical certificates and other relevant documents.

You can either apply for instalment arrangements via MyIR or ask us to apply on behalf. If you have applied for yourself, please let us know for our records. If you want us to apply for you, please advise the tax payments you want to cover, a dollar amount, frequency and start date. If we can't reach an agreement with IRD for an instalment arrangement, we can also help you with tax pool finance through TaxTraders. They are a finance company which buys and sells tax payments at more attractive interest rates than those offered by IRD.

If you want our assistance with applying for these support packages, please contact us.

- Serena Irving

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Serena Irving is a director in JDW Chartered Accountants Limited. JDW is a professional team of qualified accountants, auditors, business consultants, tax advisors, trust and business valuation specialists.

A well-written article like this, which is general in nature, is no substitute for specific tax advice. If you want more information about the issues in this article, please contact the author.