Surviving in uncertain times : things you can do
We are going into unchartered times with a heightened sense of uncertainty.
Just as ancient mariners bolted down the hatches to navigate through storms, so it is with business owners now needing to make adjustments to stay on course through uncertain times.
Focus on cashflow and liquidity – these are over riding elements business owners will need to be focused on to ensure business resilience and sustainability.
Highly recommend business owners engage their business advisor (Chartered Accountant) to review the business and build a business disruption plan. This will help identify strategies to put in place to navigate through this business disruption phase.
We are offering a 1 hour Complimentary Business Review to assess your response to this business disruption. Call now on 0800 555 8020 to book an appointment.
Government support wage subsidy packageW
The wage subsidies will be available for businesses in all sectors and all regions that can show a 30 per cent decline in revenue for any month between January and June 2020 compared to the year before (including projected revenue). If eligible, employers would be paid $585.80 per week for full time staff, and $350 for part time. Payments are capped at $150,000 per business. They will be paid in a lump sum. The support will be available for twelve weeks with applications open today. Businesses must have taken active steps to mitigate the impact of COVID-19 (eg. engaged with their bank) and signed a declaration form to that effect.
COVID-19 leave and self-isolation support
The COVID-19 leave payment scheme will provide support (through employers/to sole traders and the self employed) for those people unable to work because they are in self-isolation, are sick with COVID-19 or caring for dependents who are in either of these situations. The payments will be equal to the rate of the wage subsidy scheme but available for a maximum of eight weeks. Employers will be expected to meet all of their sick leave and other employment expectations.
Fewer small businesses having to pay provisional tax
From April 1 2020 the threshold for provisional tax will lift from $2,500 to $5,000. This measure will reduce cashflow pressure and compliance costs for small taxpayers by allowing roughly 95,000 businesses to defer their tax payments.
Waiving interest on some late tax payments
Interest is usually payable by taxpayers when they pay their tax late. The Commissioner of Inland Revenue will be given a time-limited discretion to remit interest if a taxpayer’s ability to make a tax payment on time has been significantly adversely affected by the COVID-19 outbreak. This measure will provide targeted relief to directly affected taxpayers facing cashflow pressures and apply for all tax payments due on or after 14 February 2020.
Working capital support for small and medium sized businesses
Officials are meeting with banks to discuss the potential for future working capital support, including in the form of loan guarantees for businesses that face temporary credit constraints.
OTHER TAX MEASURES
Immediate deductions for low value assets
Immediate expensing allows businesses to fully deduct the cost of low-cost assets when they are purchased, with the threshold for the write-off currently at $500. We are putting in place a temporary increase in the threshold to $5,000 for one year, reverting to $1,000 in the longer term (still higher than the current $500 threshold), which will reduce compliance costs for businesses. It will also have the side-benefit of stimulating business purchases.
Reinstatement of depreciation deductions for commercial and industrial buildings
A reintroduction of depreciation deductions for commercial and industrial buildings will encourage business investment in the recovery phase and support productivity. It will support business confidence, continuity and recovery.
$100 million has been allocated to support worker redeployment. The Tairāwhiti region will be the first to receive assistance, with the package to be agreed.
Full details of Subsidies with definitions :
Wage subsidy application is online form at:
Call us if you require any further information or assistance with this.
Business as usual
We have robust IT remote access infrastructure in place, enabling all of our people to work remotely at a moment’s notice, should that be required.
Consider what your Covid 19 Policy is for your business
Here is an example of ours that might be helpful.
COVID -19 Virus precautions:
Our thoughts go out to everyone who has been affected by the impact of the COVID-19 virus.
Due to the possible spread of the virus, we are implementing some restricted personal contact with our clients during our appointments. For the foreseeable future there will be no handshaking when we meet, but you will always receive a warm happy smile, a hello and a thank you, at the beginning and end of every appointment from our team members.
If you (the client) have any flu-like symptoms, please inform us immediately and we will reschedule the appointment to a more suitable time and date. We will of course take the same action as a company, if any of our team members show any symptoms.
As your Chartered Accountants and Business Advisors, we have a positive outlook and will do our very best to maintain the safety of our clients and employees during these testing times.
Take time to take advice
As business owners – time to take advice
You are not alone.
Take time to assess your business risk and then make a plan.
Your team will follow your lead. Some general comments:
- Don’t subscribe to the contagion of fear – this is a storm that will pass.
It’s a time for leadership and not blind panic or over reaction.
- Keep focused on the things that matter – adjust to the conditions –
focus on what you can control and not on what you can’t.
- Make proportionate responses to ensure resilience and sustainability –
belt tightening only, don’t cut off the blood supply.
Things you can do
- Talk to your Accountant – Review tax planning and explore strategies to spread tax longer, say 6 months’ holiday, and overall business disruption planning
- Talk to your Bank Manager – Converting principal and interest loans to interest only
- Talk to your Landlord – Start a dialogue and bring them with you. Explore options of rent holidays in some form
- Talk to your Franchisor – Open a dialogue around options relating to franchisor support, adjustment to marketing spend, any royalty holiday, deferment of refurbishment
* Remember Landlords and Franchisors also need to be funded to operate their business and don’t, as a rule, have pots of money lying around, so this is a dialogue about options that can work for all parties on a collaborative basis.
Contact our offices to book your Complimentary Business Disruption Review Assessment appointment.