COVID-19 Business Update – 13 May 2020
Hello again for another week! We hope you’re healthy and well. You’ve probably heard by now about the move to Level 2 on Thursday 14th May – great news for all of us!
Level 2 for businesses
The government’s COVID-19 response website says most businesses can open at Level 2 if they can do so safely. This is to be self-assessed by the business as to whether it is safe to open or not. Businesses like retail stores, cafes, restaurants, pubs, cinemas, health services and hairdressers will all be open under Level 2, but physical distancing and good hygiene need to be enforced. For the time being, groups should be kept to a maximum of 10. Regional travel is also permitted as well as recreation activities, provided it is safe to do so. This is fantastic news for all of us and well done to everyone for playing their part in “flattening the curve!”
Small Business Cash Flow Loan Scheme (SBCS)
The government has announced new one-off loans to help small businesses (including contractors and self-employed), with their cash flow. Applications opened this week for eligible businesses.
The scheme is open for businesses who have 50 or fewer full-time employee equivalents. There is a tool on the business.govt.nz website to help you work out if your business is eligible. $10,000 will be provided to eligible businesses, with additional $1800 for full-time employee equivalents and no repayments required for two years. There are some finer details of course, but we are happy to help if you have any questions.
Temporary loss carry-back scheme
Inland Revenue has some information on the temporary loss carry-back scheme that has been announced. If your business is expected to make a loss in the 2020 or 2021 year, you can use that loss to offset profits you made the year before. This means you can carry the loss back one year. This can be done before the loss year return is filed. There are certain requirements to meet for the loss carry-back scheme and you must let the IRD know if you are going to use it. Ask us if you have any questions.
What’s next for your business?
While many businesses can reopen, it’s unlikely that everything will go back to normal. It’s very wise to use this time to plan for the months ahead, as none of us know exactly what will happen. We know that writing a business plan can feel like a big effort so we have created a template to make it easier. Please get in touch if you’d like to talk about your plan – especially the financial parts like cash flow.
Here to help
We’re committed to helping you through the next few months. If you have any questions or concerns, don’t hesitate to reach out to us.