Below are all the current covid support that is available, please read carefully as some of these end shortly.
Resurgence Support Payment
This is the new support scheme that became available on Tuesday, and covers the week where alert levels were raised.
A business or organisation must have experienced at least a 30% drop in revenue over a 7-day period at the raised alert level compared with a typical 7-day revenue period in the 6 weeks prior to the increase from alert level 1.
The RSP is calculated as $1,500 plus $400 per FTE (up to 50 FTE). The maximum payment is $21,500. Sole traders can receive a payment of up to $1,900.
Employees working up to 20 hours per week are considered part time (0.6 FTE)
Employees working 20 hours or more per week are considered fulltime (1.0 FTE)
The following link will give you all the information you need to be able to calculate whether you are eligible. There is also a calculator at the bottom of the page to check eligibility. Read all the info carefully as we have found quite a few of our clients aren't eligible as they worked double time in the 3 days following lockdown.
Low Value Asset Threshold and Depreciation
The low value asset threshold was increased on the 17th March 2020 from $500 to $5,000. This means that it allows for immediate expensing of assets purchased on or after the 17th March 2020 that cost less than $5,000. You do not need to depreciate these items they can instantly go to the Profit & Loss Report.
If you are thinking of buying new assets do it now, as this threshold will be reduced permanently from the 17th March 2021 to $1,000.
Depreciation can be claimed on Commercial buildings from the 2021 financial year. This was previousy 0% and has been increased to 2% DV. Ensure that you have recorded the land value separately as this cannot be depreciated.
Loss Carry-Back Scheme
Businesses that are expecting to make a loss in the 2020 or 2021 year can use that loss to offset the profit from the year prior. This means if you paid tax in your company in 2019 and made a loss in 2020 you could carry back that loss to 2019 and get your income tax from 2019 refunded.
The same can be done for the 2021 year as you are able to estimate the loss however make sure that you don't overestimate your loss as no doubt IRD will impose penalties and interest when you file your 2021 accounts.
I held off on completing several clients 2020 accounts until this month to be sure on what the approximate loss was going to be therefore not overestimating.
Small Business Cashflow (Loan) Scheme (SBCS)
Applications for this loan have now been extended until the end of 2023. The loan is available to Sole Traders, Comapnies, not-for-profit, Partnerships, Joint Ventures and Trust as long as they meet the eligibility criteria.
No interest will be charged if the loan is repaid within 2 years - this is an increase from the original 1 year time line.
If the loan is fully paid before the end of 2023 you may be able to re-borrow one more time provided that you meet the criteria when you apply to re-borrow.
