Date posted: 12/05/2020

What you’re asking: COVID-19

The NZ Tax Team shares some of our most frequently asked questions and where to go for more information

In brief

  • Small Business Cashflow Loan Scheme
  • Repaying the wage subsidy
  • Temporary loss carry back scheme

What members are asking 

It’s been great to hear from such a wide range of our membership in recent weeks, although we wish it was in more positive circumstances. The NZ Tax Team have noticed a 150 per cent increase in member queries since March. In the initial weeks of the COVID-19 response, the types of questions we received were almost exclusively centred on the eligibility criteria for the wage subsidy and seeking clarification on the penalties and Use of Money Interest relief provisions. As time’s gone by and businesses have continued to adapt and seek other support mechanisms, the types of questions have changed. We know everyone is grappling with similar concerns at the moment, so we wanted to share some of the most frequent queries we’ve received in the last two weeks. 

Small Business Cashflow Loan Scheme 

  • Am I eligible for the small business cashflow loan scheme?
  • How do I apply? 

Inland Revenue are administering the payments and repayments of the Small Business Cashflow Loan Scheme (SBCS). It has been introduced to support businesses and organisations struggling because of loss of actual or predicted revenue as a result of COVID-19. Businesses must have 50 or fewer full-time-equivalent employees. Applications for the SBCS opened on 12 May 2020 and are open till 12 June 2020 (inclusive). 

Inland Revenue’s website has information on the eligibility criteria, maximum loan size, how to apply via MyIR, as well as information on receiving and repaying the loan. This includes step by step information on what steps need to be taken in MyIR. You can also download a copy of the SBCS Loan terms and conditions. 

Find out more about the small business cashflow loan scheme

Organisations and small to medium businesses, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.

Find out more

Wage Subsidy

  • When do I/my client need to repay the wage subsidy? 

This question is coming through frequently following media coverage of some businesses repaying the wage subsidy, or some being asked to repay the subsidy. CA ANZ have addressed the wage subsidy and repayments in the following Sharing Knowledge webinars which are available on demand for members in our COVID-19 Hub. 

  • Wage Subsidy Scheme (including insights from Employment Lawyer, Steph Dyhrberg)
  • COVID-19: Alert Levels, Regional Support, Tax and Insolvency

Work and Income have recently updated their guidance and frequently asked questions relating to when the wage subsidy needs to be repaid. As well as providing information on how to repay the subsidy, they also outline some possible scenarios, such as when a business hasn’t experienced the predicted decline in revenue. 

Repaying the wage subsidy

How to repay the COVID-19 Wage Subsidy if you need to.

Read more

Temporary Loss Carry Back Scheme

  • How do I claim a loss carry-back?
  • What happens in scenarios where shareholder salaries have been paid?
  • Can I carry a loss from the 2021 year to the 2019 year?

Our NZ Tax Leader John Cuthbertson ran a dedicated Sharing Knowledge webinar on the loss carry back scheme in early May and was joined by three senior Inland Revenue officials.  The presenters specifically address the question of shareholder employees, and the scenario where the 2021 loss may be ‘blocked’ by a smaller loss in the 2020 year. 

Inland Revenue have a lot of information available on the scheme, including eligibility criteria and a practical guide on where to claim your loss in the return. 

Loss Carry Back Scheme

A temporary loss carry-back scheme has been introduced to support customers in the current uncertain economic environment. Inland Revenue has full information here.

Read more

Search related topics