The Government has announced new financial support measures for businesses affected by Omicron.
- New targeted COVID Support Payment
- Top up loan available under the Small Business Cashflow Loans Scheme
- Flexibility on tax payment dates and terms extended by Inland Revenue
New COVID Support Payment
This payment will be available for businesses which have experienced a significant drop in revenue as a result of the Omicron outbreak.
Each COVID Support Payment will be $4,000 per business plus $400 per full-time employee, capped at 50 full-time equivalent positions or $24,000. It will be paid on a fortnightly basis for an initial six-week period (three payments in total) with the ability to extend the duration if necessary.
To qualify, affected businesses must show a 40 percent drop in review over seven consecutive days within the six weeks prior to 15 February (when the Government shifted to Phase 2 of its Omicron response), compared to seven days after that date. This is a higher threshold than previous Government support, such as the Resurgence Support scheme.
Applications for the first payment will open on 28 February, with payments starting from 1 March.
Changes to the Small Business Cashflow Loans Scheme
Changes are also being made to the Small Business Cashflow Loans Scheme to increase the amount of funding available to eligible businesses through the introduction of a ‘top up’ loan.
The Small Business Cashflow Loans Scheme, administered by Inland Revenue, currently provides loans of up to $100,000 to eligible firms employing 50 or fewer full-time equivalent employees.
The top up loan will allow those firms that have already accessed a loan to draw down an additional $10,000 with a new repayment period of five years and the first two years being interest free.
Cabinet has also agreed to remove the first two years of accrued base interest from all borrowers who have, or will, take out a loan under the scheme. This change will mean interest will only start accruing at the beginning of year three.
Flexibility on tax payment dates and terms extended by Inland Revenue
The Government is also extending the Commissioner of Inland Revenue’s ability to allow businesses to be flexible with their tax payment dates and terms to assist firms with cashflow pressures.
Revenue Minister David Parker said any business struggling to pay tax because of the impacts of COVID should log on to myIR to see if they can delay starting payments to a later date, or if any part of the tax could be written off. Inland Revenue can help with both GST and provisional tax due.
Further information on all of these changes is expected to be made available on the Inland Revenue website in the coming days.
Other options available to employers include the Short-term Absence Payment and the Leave Support Scheme.
The Short-Term Absence Payment is available for businesses, including self-employed people, to help pay their employees who cannot work from home while they wait for a COVID-19 test result.
The COVID-19 Leave Support Scheme is available to employers, including self-employed people, to help pay their employees who have been advised to self-isolate because of COVID-19 and cannot work at home during that period.
We will continue to monitor developments and encourage you to keep in contact with us directly to discuss how these financial support measures may assist you and your business.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. While we make every effort to ensure the accuracy of the information contained in this article, this is a rapidly changing environment and the information will be subject to change