What’s in the $3.2 billion support package?
The government’s latest coronavirus support package includes further measures to try and ease the pain of the lockdown. It includes tax breaks, business advice and help for tenants and landlords.
There are no in depth details available yet, so we will have to hold on, likely until 27th April.
Tax loss carry-back scheme
A large portion of the package is the tax loss carry-back scheme which will allow some businesses to access previous tax payments as refunds. Essentially this means a forecast loss in the current financial year can be offset against the tax paid on a profit from the prior year. Basically 2 tax years become 1 year.
Commercial landlords and tenants
The Government has announced its intention to put in place some temporary law changes to support commercial tenants and landlords impacted by COVID-19. The goal is to make it easier to keep lease arrangements and get back to business as usual after the epidemic. Many businesses have been unable to operate due to the level 4 lockdown alert, so they may have difficulty payment rent. Landlords, in turn, may have trouble making mortgage payments.
Important Note: Landlords and tenants will not receive financial support in the form of cash payouts.
The temporary bill that is set to come is designed to give commercial tenants more time to catch up on overdue rent before a landlord can take steps to evict them. For the next three months, landlords can’t apply to end the tenancy for rent arrears unless the tenant is at least 60 days behind in rent.
The official advice for tenants that can’t pay their rent is to let their landlord know right away. Be honest about the situation and get a payment plan in place.
If you will continue to have trouble, you may be able to access financial support from the Government’s Wage Subsidy and Leave Payment scheme that is available to eligible employers and workers.
We hope to have more details on this after April 27th, but please get in touch with us if you have any questions.
The business.govt.nz website is regularly updated with the latest COVID-19 news and announcements for businesses.
Are you worried about cashflow?
If you’re worried about your cashflow, please don’t hesitate to get in touch with us. We will do all we can to help you implement cash management processes and forecasting techniques to help. There are also some finance options available to you as well. Facilities may be provided quite quickly, so just ask if you need some help and we’ll work out what’s best for you. Remember, we are in this together.
Thank you for your continued support and patience as we work to wade through government packages, announcements and updates each week. Please get in touch if you have any questions.
We are in this together.