Omicron linked government business support

The Government has announced three support measures to help businesses affected by the current Omicron variant corona virus spread. These measures entail

• Covid-19 support payments for six weeks from 28 February 2022
• Changes to the Small Business Cashflow Scheme
• Flexibility from IRD around making tax payments—timing and relief from penalties and interest

The COVID-19 support payments announced will enable affected businesses to receive a subsidy of $4,000 and $400 per full time equivalent employee each fortnight for six weeks (three payments).

To qualify for this payment, the business must demonstrate a 40% drop in turnover in a seven-day period after 15 February 2022, compared to a comparable seven-day period within the six weeks prior to 15 February. (Example from 21 February to 27 February, turnover of $6,000 compared to the turnover from 24 January to 30 January of $10,000). A subsequent amendment allows the comparison period to be the same dates in the 2021 year and this seems to be producing results that qualify for the support payments, as compared to the 2022 dates.

Applications can be made from 28 February. From the previous subsidies, the ability to make a second and subsequent application is time based, so applying sooner will enable the second application also to be applied for sooner. IRD is administering the scheme, similar in form to the Resurgence support payment application.

As before, the support payments are not a grant, but require accounting for in the business results, with an income tax effect to them.

Changes to the Small Business Cashflow Scheme have been summarised in other entries.

Flexibility from IRD around making tax payments has had little detail, but the announcement by the Revenue Minister advised

"We are also extending the Commissioner of Inland Revenue’s ability to apply flexibility for tax payment dates and terms to assist firms with cashflow pressures"

He advised that any business struggling to pay taxes due to the impact of COVID-19 should contact IRD to see if they can delay starting payments and if any part of the tax could be written off.

For Wellington businesses, the impact of the protests at Parliament have not been addressed specifically, but we would proceed on the basis that they are related to the Omicron outbreak, with these measures applying to effects they contribute to.

As more details are advised we will communicate them. For any questions in the meantime, contact us.