13 signs your business might be in need of some help. The media is full…
- Working from Home allowance extended
In April, Inland Revenue began allowing employers to pay staff who were working from home because of the Covid pandemic up to $20 a week tax-free for expenses such as additional heating costs, without having to estimate or show what the employee’s actual expenses were.
The change also allowed employers to make a tax-free payment of up to $400 per employee for furniture costs, also without having to gather evidence on how the money was spent.
The measures were originally billed as a temporary response to the Covid-19 pandemic and had been due to come to an end on September 17.
But employers will now be able to make the tax-free payments until March 17 and they will be able to make the payments to all staff who are working home – whether or not that is because of the pandemic.
If home-workers had costs exceeding $20 a week and employers wanted to fully reimburse them, they could still do that, tax-free, if they kept accurate records.
- Business Finance Guarantee scheme
Small and medium-sized businesses may be eligible for the Business Finance Guarantee scheme. The scheme helps businesses access credit to support operating cashflow disrupted by COVID-19.
Participating banks can provide to eligible businesses:
- new loans
- increased limits to existing loans
- revolving credit facilities.
Recent changes to the scheme mean:
- credit is now available for general purpose borrowing, including capital purchases or projects related to COVID-19
- the revenue limits have been extended from $80 million to $200 million per annum
- the loan limit has increased from $500,000 to $5 million
- the loan term has increased from 3 to 5 years.
The scheme supports banks to take on lending by the Government taking on the default risk of up to 80% of the loan.
No personal guarantee is required. Lending decisions are made by banks. Borrowers must still pay the loan back — with interest — as they would normally.
· Small Business Cashflow Loan Scheme
Inland Revenue will provide interest-free loans for a year to small businesses as they recover from the impacts of COVID-19.
The Small Business Cashflow Loan Scheme will provide assistance of $10,000 plus $1,800 per full time equivalent employee up to a maximum of $100,000 to firms employing 50 or fewer full-time equivalent employees.
Loans will be interest-free if they’re paid back within a year. The interest rate will be 3% for a maximum term of 5 years. Repayments are not required for the first 2 years.
- Apprenticeship Boost Initiative
Support will be available to employers of first and second year apprentices in a Tertiary Education Commission-approved New Zealand Apprenticeship or Managed Apprenticeship programme.
The amount that can be claimed will vary depending on when an apprentice started their training programme and when they reach 24 months. Employers can claim:
- $1,000 a month for eligible apprentices in the first 12 months of their training programme
- $500 a month in the second 12 months of their training programme.
Funding will be available from August 2020 until April 2022.
Employers are required to top up the funding they receive to ensure their apprentices receive at least the minimum or training wage they are legally entitled to.