Weekly Digest – 29 September 2021

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

45 New COVID-19 Cases a Week After Alert Level Downgrade

The government has recorded 45 new community cases of COVID-19, and all new cases were from Auckland. Everyone in Auckland is urged to stay within their bubbles and wear face masks.

Auckland was nearing the end of its first week under its downgraded level 3 restrictions, which were set to be reviewed on 4 October.

New Law to Cool Down Housing Market

The government introduced new rules designed to make property speculation less appealing and to improve record-low housing affordability. The new law will limit property investors from deducting mortgage interest from their taxable incomes.

It will be implemented from 1 October and will be the first of a series of real estate measures to be introduced to cool the country’s red-hot housing market.

New Zealand to Begin Letting People Isolate at Home

The government will allow small numbers of vaccinated travellers to isolate at home instead of in state-run quarantine facilities as part of a phased approach to re-opening its borders.

The pilot project that will start in October will be open to 150 people who must be fully vaccinated NZ citizens or residents. The participants will be charged a $1000 fee and expressions of interest for the trial will open at 9am on Thursday.

If your business has to close temporarily or reduce opening hours

COVID-19 Wage Subsidy

If your business cannot operate because of Alert Level 4 restrictions or you will lose revenue, you can apply for the COVID-19 Wage Subsidy scheme to help keep paying your staff and protect jobs.

Businesses and self-employed people must expect a 40% drop in revenue to be eligible to receive the wage subsidy.

The wage subsidy is paid in a 2 week lump sum. You can get:

  • $600 per week for each full-time employee
  • $359 per week for each part-time worker retained.

As an employer you must pass on the full wage subsidy to your employee. If the wage subsidy is more than your employee’s pay, you can continue to pay them at their normal rate.

Wage Subsidy 2021 #2 Update

The Wage Subsidy currently only applies to those businesses operating under Level 4 or Level 3 restrictions. This means generally anyone outside of the Auckland borders cannot and should not apply for this round of Wage Subsidy (at this stage).
If you have applied and received the subsidy (done before the move to Level 2) then you will need to consider and ensure that

  1. your revenue does in fact drop by 40% for the 2 weeks from 31 August to 13 September and
  2. it is attributable to the time spent at level 3 and/or any direct knock-on effect of Auckland remaining at level 4.

Get in touch with us if you have any questions.

Find out more about the Leave Support Scheme on the Work and Income website.

COVID-19 Resurgence Support Payment

The COVID-19 Resurgence Support Payment helps cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.

To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.

You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.
The maximum payment is $21,500.

If you’re a sole trader, you can receive a payment of up to $1,900.

Applications for the COVID-19 Resurgence Support Payment are now open. You need to apply through Inland Revenue. Businesses anywhere in New Zealand can apply if they meet the eligibility criteria.

Find out more information about the COVID-19 Resurgence Support Payment and how to apply here.

If your business has reduced revenue

Small Business Cashflow Loan Scheme

If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan where you can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business.

  • When applying for the loan, you need to be able to declare that your business is viable.
  • Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year.
  • Applications are open until 31 December 2023 through myIR. If your business does not have a myIR account, you will need to create one to apply.

Loans will be interest free if they are paid back within 2 years. The interest rate is 3% for a maximum term of 5 years.

IRD tax assistance

If you’re finding it hard to meet your tax obligations, Inland Revenue may be able to help. Get in touch with us if you have any questions.

Insolvency relief

The COVID-19 Business Debt Hibernation scheme allows businesses to get a month’s protection while they talk to their creditors.

If an employee needs to self isolate

COVID-19 Leave Support Scheme

If an employee cannot work from home while self-isolating, you may be able to apply for financial support so they can continue to get paid.

The Leave Support Scheme is paid as a 2 week lump sum at the rate of:

  • $600 a week for full-time employees
  • $359 a week for part-time employees

You cannot get the Wage Subsidy August 2021, Leave Support Scheme and Short-Term Absence Payment for the same employee at the same time.

If an employee is awaiting the result of a COVID-19 rest

COVID-19 Short-Term Absence Payment

The Short-Term Absence Payment is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here

Kiwi Business Boost Tool

The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.

The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.

Training Incentive Allowance

The Training Incentive Allowance can help with tuition fees, books, childcare, equipment, transport and any additional caring costs while studying. It’s available for courses at levels 1-7 of the NZ Qualifications Framework. Visit the Work and Income website to find out who’s eligible, how much you can get and who can apply.

Five Strategies to Gain Market Share

New businesses may find it extremely challenging to increase their market share. The success of your efforts depends on your decisions and other factors that vary from one industry to another. However, this Forbes article shares five strategies that will help you gain a bigger market share no matter what sector you’re in:

  • Define your brand. Create a recognizable brand identity to distinguish your company from others.
  • Study the competition. Dissect the market you’re about to enter and own up to determining what your direct competitors do better that you currently do.
  • Target your market. Dive deeper into defining your existing and ideal customers so you can market your business more effectively.
  • Be innovative, yet flexible. Find the right balance between sticking with what makes your services unique, while still being willing to adapt to necessary changes.
  • Connect with your customers. Directly engage with your customers to acquire feedback and assess their needs.

Need more focused business advice? Get in touch with our advisors today and let’s chat about your specific situation.

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