Date posted: 15/04/2020

The first month of COVID-19 response

The New Zealand Government’s first COVID-19 assistance announcement was made on 17 March. We have summarised all of the announcements so you can choose the best options for you and your clients. CA ANZ has also created two fact sheets covering the Government’s support package and tax legislative changes.

In brief

  • Here is a timeline of the COVID-19 announcements and key dates
  • There is a quick reference factsheet for tax policy changes
  • There is also a quick reference factsheet of wider Government assistance
  • 14 February 2020 – taxpayers with tax payments due on or after this date, who's ability to pay on time was significantly impacted by COVID-19, may be eligible for Use of Money Interest remission when their core tax has been paid.
  • 16 March 2020 – the Reserve Bank sets the official cash rate at 0.25 and says it will remain at this rate for 12 months.
  • 17 March 2020 the Government unveils a NZ$12.1 billion support package for COVID-19, including the first version of the wage subsidy scheme, the leave subsidy scheme, social assistance measures, and NZ$2.8 billion of business tax changes. These business tax changes were: the reintroduction of depreciation for non-residential buildings; increasing the low-value asset write-off threshold; increasing the residual income tax threshold to NZ$5000; allowing the Commissioner of Inland Revenue to waive interest on late tax payments.  
  • 23 March 2020 – the initial NZ$150,000 cap on the wage subsidy scheme is removed and the wage subsidy is expanded to be accessible to high-growth firms and new businesses. Announcements also clarified that self-employed persons and contractors can apply.
  • 24 March 2020 – the Government, Reserve Bank and retail banks announce the Business Finance Guarantee Scheme and, a six-month mortgage holiday for homeowners impacted by COVID-19. The Business Finance Guarantee Scheme (operated by retail banks) allows for a loan of up to NZ$500,000 for a maximum of three years and is available for businesses with turnover of NZ$250,000 to NZ$80 million per annum. The Government will carry 80% of the credit risk.
  • 25 March 2020 – the COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020 receives Royal Assent under urgency. Inland Revenue issues a media release on its possible response to businesses that cannot pay their taxes. "If your business is unable to pay its taxes on time due to the impact of COVID-19, we understand, you don't need to contact us right now. Get in touch with us when you can, and we'll write-off any penalties and interest. To help get correct payments to people we would like employers to still file their returns as normal. This helps us work out the right amounts for people and helps the Government continue to respond to what is happening in the economy." While taxpayer-friendly at face value, this raised concerns for the NZ Tax Team as it does not align with the recently introduced Use of Money Interest changes.
  • 26 March 2020 the first day of level 4 lockdown.
  • 27 March 2020 – the second version of the wage subsidy is announced. Applications made on or after 4pm on 27 March are subject to different obligations, including a requirement to retain staff for the 12 weeks of the subsidy. The leave subsidy scheme is folded to prevent double dipping.
  • 28 March 2020 – the Minister of Finance clarifies that if employers cannot pay 80% of the employees' salary and wages as a minimum, the full entitled wage subsidy must be passed to employees.
  • 1 April 2020 – applications open for the Business Finance Guarantee Scheme.
  • 2 April 2020 – a leave scheme is established for essential workers who are self-isolating, deemed high risk, or who have household members who are regarded as high risk or are self-isolating.
  • 3 April 2020 – legislative changes to the Companies Act are announced to help companies facing insolvency. These temporary changes include a 'safe harbour' from insolvency duties and enable businesses to place existing debts into hibernation.
  • 6 April 2020 – applications open for an Essential Workers Leave Scheme.
  • 8 April 2020 – the Inland Revenue sends updated guidance to tax agents and businesses regarding the remission of Use of Money Interest.
  • 9 April 2020 – the Inland Revenue's online myIR systems and secure mail system shut for Business Transformation – release 4. CA ANZ requested this release be delayed, however system improvements were required to further support the COVID relief measures.
  • 16 April 2020 – Inland Revenue's systems come back online.

Quick Reference fact sheets

CA ANZ has created two fact sheets covering the NZ Government support package to date, and tax legislation changes.

These fact sheets summarise the key points of the Government packages and tax legislation so that members have the information at their fingertips. If you want more information, the fact sheets include links to the relevant websites or legislation.

Search related topics