A new targeted COVID-19 support scheme has been released by the Government to help businesses.
A new COVID-19 Support Payment of a maximum of $24,000 will be made available for businesses struggling with a business downturn during the Omicron outbreak.
Each COVID-19 Support Payment will be $4,000 per business plus $400 per full-time employee (FTE), capped at 50 FTEs or $24,000. This is the same rate as the most recent Transition Payment which the Government rolled out in December.
Businesses will have to show a 40% drop in 7 consecutive days within the 6 weeks prior to the shift to Phase 2 of the Omicron response on 15 February, compared to 7 days after that date.
Applications for the first payment open on 28 February 2022 with payments starting from 1 March.
The Minister of Finance, the Hon Grant Robertson, said that the payments will be available on a fortnightly basis for 6 weeks - so 3 payments in total. He said that "this reflects the international experience that the peak of the Omicron outbreak should pass after about 6 weeks. We will continue to closely monitor the situation and have the option to extend the payment if this is necessary".
There will also be changes 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 Minister of Revenue, the Hon David Parker, said that "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".
The Minister said that "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".
The Commissioner of Inland Revenue's ability to apply flexibility for tax payment dates and terms to assist firms with cashflow pressures will also be extended.
Any businesses struggling to pay tax because of the impacts of COVID-19 should log on to myIR to see if they can delay starting payments to a later date, or if any part of the tax can be written off. IR can help with both GST and provisional tax due.
Link to above article: https://www.business.govt.nz/covid-19/financial-support-for-businesses/
Source: New financial support for businesses affected by Omicron, Beehive govt website, 21 February 2022, accessed 21 February 2022.