Blog Layout

COVID-19 Business Support

accelerateonline • Apr 16, 2020

The Government has announced new relief measures to boost confidence and help small and medium-sized businesses get through the COVID-19 crisis.

The package includes:

  • a tax loss carry-back scheme
  • changes to the tax loss continuity rules
  • greater flexibility for taxpayers in respect of statutory tax deadlines
  • measures to support commercial tenants and landlords, and
  • further business consultancy support.

Tax loss carry-back scheme

This enables a business to offset a loss in a particular tax year against a profit in a previous year, producing a refund of the tax paid in the previous profitable year, boosting cashflow. Businesses expecting to make a loss in either the 2019/20 year or the 2020/21 year can estimate the loss and use it to offset profits in the previous year.

A tax Bill being introduced the week beginning 27 April will include a temporary mechanism for this. The Government proposes a permanent scheme, subject to public consultation in the second half of 2020, to apply for the 2021/22 and later income years.

Inland Revenue’s website notes taxpayers “do not need to rush to re-estimate their provisional tax before 7 May. Part of the proposed law change would make it possible for them to re-estimate it after the date of the final instalment. This will give them more time to work out any estimated loss for the 2020/21 income year.”

Change to tax loss continuity rules

The tax loss continuity rules will be relaxed from the 2020/21 income year to support businesses trying to raise capital. Currently, if a company has more than a 51% change in ownership it cannot keep its tax losses. The change allows more businesses to carry forward losses. A tax Bill for introduction in the second half of 2020 will set out the detail. The new rules will include a ‘same or similar business’ test, meaning the business must continue in the same or a similar way it did before ownership changed.

Greater flexibility around tax deadlines

Inland Revenue will have greater discretionary power to extend due dates and timeframes, or to modify procedural requirements set out in the Revenue Acts. This could include extending deadlines for filing tax returns and paying provisional and terminal tax. At this stage, the power will be time-limited for a period of 18 months and will apply to businesses affected by COVID-19.

It’s expected that the tax Bill for introduction on 27 April will include amendments to the Tax Administration Act 1994.

Supporting commercial tenants and landlords

The current timeframe for commercial landlords to cancel a lease will be extended from 10 to 30 working days. The changes allow for more time for breaches or defaults to be remedied, covering:

  • the period the tenant is in arrears before notice is given, and
  • the period required to remedy the breach before the landlord can cancel the lease and the mortgagee can exercise their rights to sale or repossession.

The Government is also extending timeframes for commercial mortgages and home loans. The timeframe for lenders will be extended:

  • from 20 to 40 working days, for mortgaged land, and
  • from 10 to 20 working days, for mortgaged goods.

These changes are included in the Bill to be introduced on April 27 and will apply retrospectively once passed.

Free business consultancy support

Businesses will be able to access free, specialist support for issues including business continuity planning, finance and cash flow management, HR and staffing issues, and potentially any sector-specific issues. The Regional Business Partner Network will scale up advisory services, so more businesses receive support over the next year. Existing helplines often used by businesses, such as those operated by the Employers and Manufacturers Association and the Canterbury Chamber of Employment and Commerce, will also be extended.

Our Recommendation

We expect to see further support for businesses and households as we go on. Meanwhile, contact us so we can work together on how these changes could support your business recovery.

By Withers Admin 04 Dec, 2023
Accelerate - December 2023
By Withers Admin 04 Dec, 2023
Accelerate August 2023 
By accelerateonline 12 Jun, 2023
Inland Revenue have recently announced this year’s livestock Herd Scheme Values and we think this is a great opportunity to update you on the latest movements. The Herd Scheme Values are the National Average Market Values, determined by a process involving a review of the livestock market as at 30 April.
By accelerateonline 12 Jun, 2023
The values for Dairy this year have seen a fall in values across all female classes, but increases across all male classes. The fall in R1 heifer values can be attributed to the prohibition of live export by sea commencing from 30 April 2023. For the first time the National Average Market Value for R1 Heifers is less than the National Standard Cost of breeding and rearing an R1 Heifer.
By accelerateonline 12 Jun, 2023
In contrast to Dairy values Beef values have increased on average 9% and are almost at record values for all classes.
By accelerateonline 12 Jun, 2023
Sheep values have all fallen from the high of 2022, slipping back an average of 10.2%. Whilst values have fallen, they are still either the second or third highest that they have ever been depending on which class of sheep you are looking at.
By accelerateonline 12 Jun, 2023
Goat values have increased on average 7.8% with almost all classes of fibre and meat producing goats at record highs. The value of milking goats continues to be well down from historic highs, except for breeding bucks which are at their highest value.
By accelerateonline 21 May, 2023
Like the rest of the world, New Zealand has reeled from the aftermath of Covid, rising inflation and interest rates, and the cost-of-living crisis. This year we also have a massive storm damage repair bill.

Tax

By accelerateonline 21 May, 2023
Any tax cuts, or changes to the tax thresholds were vetoed in Budget 2023 as this was viewed as worsening inflation.
By accelerateonline 21 May, 2023
Budget 2023 builds on the $889m already provided in response to this year’s storms. A further $6b is allocated for a National Resilience Plan , for rebuilding after weather events. $71b is committed to new and existing infrastructure projects: not only storm damaged communications, power and roading, but schools, hospitals, public housing, rail and road.
More Posts
Share by: