Covid-19 Archives - GECA Chartered Accountants

Covid Leave Support Scheme and Short-Term Absence Payment

Giles — Mon, 30 May 2022 23:53:35 +0000

This post is by Sheral Reddy, an chartered accountant and tax specialist at GECA Chartered Accountants. Call Sheral now for tax advice on your circumstances.

Covid Leave Support Scheme and Short-Term Absence Payment

As the Covid-19 pandemic continues, a lot of businesses are experiencing shortage of staff and impact on their businesses with employees having to isolate or not being able to work from home. There are two different COVID-19 payments available for employers and self-employed people as follows:

COVID-19 Leave Support Scheme
- This is for people who need to self-isolate and can’t work from home.
- $600 is paid to each worker who were working 20 hours or more a week (full-time)
- $359 is paid to each worker who were working less than 20 hours a week (part-time)
- To be eligible for this payment, the employee or self-employed person has to have Covid-19 or be a household contact. Further payments can be applied depending on how long the employee needs to self-isolate.
- Employers can apply for casual workers or staff with variable hours. A written agreement needs to be done between the employer and employee to work out the hours they would have usually worked during this period and what rate should be applied for.
COVID-19 Short-Term Absence Payment
- This is for employees or self-employed person requiring to stay home while waiting on their Covid-19 PCR test result and they can’t work from home.
- Employees who have to support a dependent or have children or disabled family member can also be eligible for this scheme while they wait for the COVID-19 PCR test result.
- The employees are eligible for one-off payment of $359. It can only be paid once in a 30 day period unless a health official tells the employee or their dependent to get another test.
- This payment is not available for employees or self-employed persons taking a Rapid Antigen Test (RAT) as the results are quicker to obtain.

Before applying for the above schemes please ensure you have the following information available:

Your New Zealand Business Number (NZBN) if you have one available for your business
Your employees full name, date of birth and IRD number
Your bank account details
Your business IRD number

Please contact your GECA advisor now on 0800 758 766 if you require any assistance with applying for the above Covid-19 Payment schemes. The link below is to assist you if you would like to apply for the payments yourself:

https://www.workandincome.govt.nz/covid-19/leave-support-scheme/how-to-apply.html

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Covid-19 Tax Update

Giles — Mon, 20 Apr 2020 22:54:08 +0000

The government response to Covid-19 and the shutdown of the economy has seen a raft of tax changes proposed. These are still in draft form and we will be in a better position to advise clients once the legislation is passed.

However, we suggest the following in regard to upcoming tax payments. As always, early engagement saves long term pain so call us if you need advice in regard to your specific circumstances.

7 May GST, 2020 Tax Filing and Business Planning

Right now we favour drafting the 2020 Financial Statement positions, but not taking a final 2020 tax position too early, our view is wait and see what the Government rolls out next, there is still a budget to come in May and we don’t know how much more stimulus or legislation changes they will need to produce. A few months of trading in 2021 will allow you assess how the remainder of teh year will progress and plan accordingly before we close off 2020. There are changes to various IRD rules as well that may make it beneficial to hold off filing 2020 tax returns early.

Having a good 2020 draft tax position though, means we can move to final accounts quickly if we need to for any reason, but we have flexibility to incorporate changes.

Please contact us urgently if you want to review your taxation, over the next few weeks to determine what is the best course of action for you, particularly for the 7^th of May Provisional Tax and GST payments and returns.

Tax Payment Strategies for On Time or Overdue Taxes and Dealing with Tax Cashflow Issues

Please contact us for a strategy no matter the tax type or period we can help, in terms of dealing with tax, the sooner we start reviewing options the better, for past, present or future taxes.
We can arrange tax purchase/options through Tax Management NZ, so there are other ways for you to deal with tax payment issues in addition to direct payment arrangement deals with IRD on taxes to be paid.

We can still purchase 2019 terminal tax due 7^th of April 2020 as far out as 17 June 2020 for final payment, and we can look at a variety of dates for the various provisional taxes. In some instances this may be more economical than the time and cost to complete a payment arrangement and remission of penalties and interest.

If you are applying for finance, a bank might require you or we to certify all taxes are up to date, a TMNZ arrangement is likely to meet that requirement, a direct tax arrears arrangement with IRD might not. Have a look here to get the basics of this at: https://www.tmnz.co.nz/

Before committing to a 7^th May 2020 tax payment, based on your draft results to 31 March 2020, due to lockdown and Covid we recommend clients review their cash flow needs, and only pay IRD in the first instance if they have significant surplus funds to do so.
Penalty and Interest relief period is for 24 moths effective 24 March 2020 to 24 March 2022.
In any event not paying the IRD upfront, will require a repayment arrangement or use of a TMNZ type Scheme.
At this stage we are still working through what IRD will deem an acceptable repayment arrangement. If come 7^th May 2020 and the IRD hasn’t yet signalled what an acceptable repayment arrangement is, we would assume 6 to 24 months, until told otherwise.
Instalment proposals may be accepted by IRD with “minimum requirement” if it’s within 24 months, thought this still needs to be clarified.
Any proposal that IRD views as risk based may require in support of the application three months bank statements/credit card statements, management accounts, lists of debtors and creditors, cash flow projections.
IRD link https://www.ird.govt.nz/Updates/News-Folder/covid19-business-changes

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COVID-19 and Commercial Rent Payments

Giles — Mon, 30 Mar 2020 22:19:16 +0000

Many of our clients lease commercial premises and rent is typically payable monthly in advance on the first day of the month (tomorrow). Clients have been asking us what relief is available (if any) in relation to their monthly lease payments.

After the Christchurch earthquakes the standard Auckland District Law Society (ADLS) commercial lease agreement was changed to include a clause 27.5, the relevant parts of that clause are as follows:

“If there is an emergency and the Tenant is unable to gain access to the premises to fully conduct the Tenant’s business from the premises because of reasons of safety of the public or property or the need to prevent reduce or overcome any hazard, harm or loss that may be associated with the emergency including: …

Restriction on occupation of the premises by any competent authority, then a fair proportion of the rent and outgoings shall cease to be payable for the period commencing on the date when the Tenant became unable to gain access to the premises to fully conduct the Tenant’s business from the premises until the inability ceased.”

We have been informed that clause 27.5 means in the main rent and outgoings, with the possible exception of insurance, will abate by 100% for the Lockdown Period. The exceptions to this will be businesses that operate an “essential service” during the Lockdown Period or circumstances where access to the premises is less relevant.

The standard ADLS Lease prior to 2012 contained no provision relating to lack of access.

If the standard ADLS Lease is prior to the 2012 version, or if a lease makes no provision for “no access” then:

The Tenant will have a right to claim for its losses or damages, by not being able to access the premises, which may well end up being a fair and reasonable proportion of rent or outgoings, similar to the clause in the standard ADLS Lease since 2012.
If the Tenant provided an essential service, entirely or in part, then in a similar way their claim to damages would be reduced.

News media has reported that The Warehouse Group has penned a letter to its landlords relying on the ‘no access in emergency’ lease clause to stop paying rent. A letter from The Warehouse to its landlords, obtained by NBR said,

“Due to the government activating Alert Level 4, effective from 11.59pm on Wednesday night, we will be unable to trade from the premises which we lease from you due to the restrictions imposed.”

“We will be relying on clause 27.5 of our lease and as a result all rent and outgoings cease to be payable from March 26, 2020, continuing during the period we are unable to trade.”

The above is general commentary only and each business should take expert legal advice. Specific legal advice as to your specific circumstances should be sought, and this commentary should not be relied upon as if it is specific advice to you.

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