This summary is provided by leading music & entertainment accounting and business consulting services firm Entertainment Accounting Services.
COVID-19 is a rapidly developing situation. New Zealand’s official response to COVID-19 is having an impact on our business community and in the entertainment industry, which has come to a sudden halt with so many events and productions postponed or cancelled. We believe that business owners and managers, ourselves included, will find dealing with the coming months challenging.
Business continuity plans will be key to surviving the impending business disruption. As will clear communication and accurate information.
The Government has released an economic response package.
The package includes:
- wage subsidy scheme
- leave and self-isolation support
- business cash flow and tax measures
- wider $12.1 billion package.
Links to applications:
Wage subsidy scheme
Wage subsidies will be available for all employers that are significantly impacted by COVID-19 and are struggling to retain employees as a result. The scheme will be open to all businesses, including sole traders and the self-employed.
Wage subsidies will be available for businesses in all sectors and all regions that can show a 30 per cent decline in revenue for any month between January and June 2020 compared to the year before (including projected revenue).
The subsidy will be $585.80 per week for a full time employee (20 hrs or more) or $350.00 per week for a part time employee (less than 20 hrs). The payment will be made as a lump sum for a period covering 12 weeks. This means employers will receive a payment of $7,029.60 for a full time employee and $4,200 for a part time employee. The maximum amount any one employer can receive is $150,000.
More information on who qualifies for the wage subsidy, definitions for wage subsidy qualifications, and how to apply, can be found on the Work and Income website.
Leave and self-isolation support
Workers and businesses have responsibilities to prevent the spread of COVID-19. The purpose of the COVID-19 leave and self-isolation scheme is to support workers financially to self-isolate, or while ill with COVID-19, where this is required so that all businesses and workers can do the right thing.
From 17 March 2020, the COVID-19 Leave Payment will be available to support people financially if they need to self-isolate, cannot work because they are sick with COVID-19 or cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19.
The payments will be $585.80 per week for full time and $350 per week for part time workers. The COVID-19 Leave Payment will be available for eight weeks from 17 March 2020. Employers will be able to apply for this more than once.
More information on who qualifies for the leave payment, and how to apply, can be found on the Work and Income website.
Business cash flow and tax measures
There are a number of business cash flow and tax measures that have been announced, including:
- Giving Inland Revenue the discretion to remit use-of-money interest (UOMI) for customers significantly adversely affected by COVID-19.
- Increasing the provisional tax threshold from $2,500 to $5,000 from 2020/2021.
- Increasing the small asset depreciation threshold from $500 to $1,000 — and to $5,000 for the 2020/21 tax year.
- Allowing depreciation on commercial and industrial buildings from 2020/2021.
- Removing the hours test from the In-Work Tax Credit (IWTC) from 1 July 2020.
More information on the business cash flow and tax measures can be found on the Inland Revenue website.
Wider $12.1 billion package
There are further parts to the wider $12.1 billion package that you may be interested in, including income support, and further investment in the health response.
More information on the wider package can be found on the Treasury website.