COVID-19 | Financial FAQs with SBA

Many small businesses are taking a hit from COVID-19. During this time, the team at Small Business Accounting (SBA) is working harder than ever (at home) to help businesses try to survive the impact of COVID-19.

We asked Megan Tomalin from SBA to provide some handy tips for small businesses working through their finances.

With financial planning, business planning, forecasting, finance and lending support, and also working with you through the COVID-19 subsidy process, we are here to help.

To help you get started, here are the answers to the most common questions we get asked:

How do I apply for the wage subsidy?
Please follow this link HERE to the Work and Income website where you can submit a request for the wage subsidy, and also find information regarding the requirements.

If you have any further questions, please don’t hesitate to call your local SBA branch for more assistance.

Which category do we apply under if we are shareholders and receive annual remuneration at year end?
You can follow this link HERE to the right place.

Wage subsidy applications for employees and shareholder salary recipients use the same form.

Is there another form to complete if our business is 30% down from last period / year?
Not yet – use the following form at this link HERE.

The online application form is all that is required at this time. The applications are being processed quickly with no evidence required at this stage. This will be required at a later stage, so prepare it now with reports generated to preserve the current figures in the ledger. Make sure to have fully reviewed your income results before applying to avoid issues and potential repayments later on.

Do I make employees take annual leave as part of the wage subsidy?
No, pay them as normal, leave is not required to supplement pay at this stage wherever possible. Try to keep normal wage/salaries for 12 weeks or at least ensure they’re at or above their 80% standard pay rate. There are ongoing updates and revisions with this subsidy, please visit the Work and Income website HERE to get the latest information.

Can I defer 7 April 2020 tax payments?
This is being dealt with by the IRD on a case by case basis, contact the IRD. They will charge interest for pre-COVID income. Tax Management New Zealand offer tax pooling services and this is highly recommended by SBA if you are unable to settle your residual tax amount on this date. You can find out more HERE.

Can I defer 7 May 2020 provisional tax payments?
This has not been confirmed by the IRD at this time. Contact the IRD through their online secure mail service. It is highly likely given the situation currently, but not certain. The IRD has said they will consider remission of interest for late payment, quoting from their website:

“To support businesses and individuals impacted by COVID-19, the Government is proposing to give Inland Revenue the discretion to write-off use of money interest (UOMI) on payments due on or after 14 February 2020 if a taxpayer’s ability to make a tax payment on time has been significantly adversely affected by the COVID-19 outbreak.

“Under the current proposal, UOMI could be remitted for a maximum of two years past the date of enactment, but the actual length will depend on the circumstances of each business or individual.”

Likewise GST for both 28 March 2020 (for one month February 2020 GST return) or 7 May 2020 (for two monthly March 2020 GST return)?
It is understood all PAYE and GST returns and payments are to be made as usual, no exceptions or provisions for interest and late penalties for these payments so continue to meet this compliance requirement as usual.

This is a constantly changing situation and SBA are doing their utmost to keep up to date with the latest developments. We hope everyone and their families stay safe during this time.

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