New Zealand

FAQs on COVID-19 Government economic response measures

Our team has reviewed the announced support packages and answered the questions our clients are asking.

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A number of COVID-19 financial support initiatives are available to businesses and organisations. All have eligibility criteria that must be met when applying.

A new Short-term Absence Payment is available from 9 February 2021 for businesses, including self-employed people, to help pay their workers who cannot work from home while they wait for a COVID-19 test result.

This is a one-off payment of $359 for each eligible worker. It also includes parents or caregivers who need to miss work to support their dependents who are staying at home awaiting a test result.

Further information is available at Work and Income.

  • The COVID-19 Leave Support Scheme continues to be is available for employers, including sole traders, who meet the criteria. It covers workers who are at higher risk if they get COVID-19 and unable to work from home or need to self-isolate.
  • The weekly rates are $600 for full-time workers and $359 for part-time workers and is now paid on a weekly basis.

To find out more, click here.

  • Small to medium business owners, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.
  • The eligibility criteria are the same as the Wage Subsidy Scheme. How much you can borrow is based on the wage subsidy you received, or the wage subsidy you would have received if you had applied for it.
  • IRD will lend up to $100,000 to businesses that employ 50 or less full time staff. The maximum amount loaned is $10,000 plus $1,800 per full-time-equivalent employee.
  • The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within two years
  • Inland Revenue will administer the payments and repayments of this scheme. Businesses will apply for the loan payment through IRD’s myIR.
Business size Base loan FTE equivalent amount Total loan
Sole trader $10,000 $1,800 $11,800
10 FTE $10,000 $18,000 $28,000
50 FTE $10,000 $90,000 $100,000

To find out more, please visit ird.govt.nz

Other financial support

  • From the 2020-2021 income year onwards, businesses can claim depreciation deductions for commercial and industrial buildings.
  • Airbnb properties with less than four individual units or are part of a residential home, are NOT non-residential and therefore cannot be depreciated.

To find out more, please visit ird.govt.nz

  • Taxpayers will be able to deduct the full cost of more low-value assets in the year purchased.
  • The threshold will be increased from $500 to $5,000 for the 2021-21 income year.
  • From 17 March 2021, the depreciation threshold will be permanently increased to $1,000.

To find out more, please visit ird.govt.nz

  • The threshold for paying provisional tax will increase from $2,500 to $5,000. This is a permanent change that will take effect from the 2020-2021 income year.
  • This will give businesses until 7 February following the year they file to pay their tax, rather than paying in instalments throughout the year.

To find out more, click here.

  • Taxpayers who have had their ability to pay their tax on time significantly adversely affected by the COVID-19 outbreak may be eligible to have their interest waived on late tax payments.

To find out more, click here.

  • Businesses expecting to make a loss in either the 2019/2020 year or the 2020/2021 tax year can estimate that loss and carry the loss back one year.
  • A refund will be received for the tax paid in the previous profitable year.

To find out more, please visit ird.govt.nz

  • Your company can carry a loss forward if it meets the requirements of either the shareholder continuity test or the business continuity test.
  • Shareholder continuity test – You may be able to carry a loss forward if at least 49% of your company’s voting shares do not change hands during the year the loss was made, as well as the year it will offset income.
  • Business continuity test – From the 2020/2021 income year, unless there is a major change in the business within 5 years following a change in ownership, you may be able to carry forward losses for your company.

To find out more, please visit ird.govt.nz.

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