Category Archives: En News

COVID-19 Small Business Cashflow Scheme (SBCS)

The Small Business Cashflow Scheme (SBCS) was introduced to support small to medium businesses and organisations struggling with a loss of actual revenue due to COVID-19. Applications are open until 31 December 2023.

We will administer the payments and repayments of this scheme. If your business or organisation is eligible and you submit an application through myIR, you may be entitled to a loan.

In February 2022, the Government announced that the SBCS base loan would increase to $20,000 (from $10,000). This means that for new loans the amount that can be borrowed will be $20,000, plus $1,800 per full-time equivalent employee (up to 50 employees). The loan repayment period remains 5 years (60 months).

Existing borrowers will also benefit from this change as they will be able to apply for a top-up loan of $10,000, plus any amount they were eligible for but did not take in their initial loan. Applications opened on 21 March 2022.

The first 2 years of existing and new loans will be interest-free provided the loan is not in default. Interest will apply at a rate of 3% per year on the remaining loan balance from the first day of the third year of the loan period.

This change took effect from 21 March 2022

Talk to us, so we can check whether your company is eligible for Covid-19 Business Loan

Source: www.ird.govt.nz

Investment property changes

When: 27 March 2021

What: For properties acquired on or after 27 March 2021:

  • Legislation has passed that extends the bright-line test from five years to 10 years on residential property.
  • The Government intends for the bright-line test to remain at five years for new builds. The Government has introduced legislation that is currently being considered by the Finance and Expenditure Committee in Parliament.
  • Legislation has passed that introduced a ‘change of use’ rule. If the sale of your property is subject to the bright-line test, and you don’t use the property as your main home for 12 months or more, you will be required to pay income tax on a proportion of the profit made through the property increasing in value.
  • If you sell a property within 10 years of acquiring it (or five years for a new build) and it was your main home for the entire time you owned it, you will not pay tax under the bright-line test on any gain in value.
  • Any gain in property value that is considered taxable income (including under any of the bright-line tests) will also affect any other obligations or entitlements you have based on taxable income, such as student loan repayments, child support payments, and Working for Families.

For properties acquired before 27 March 2021:

  • The previous bright-line test for five years will continue to apply for properties acquired before 27 March 2021.
  • The Government has proposed that interest on loans for investment properties acquired before 27 March 2021 can still be claimed as an expense, but the amount will reduce each year until it’s completely phased out by the 2025-2026 tax year. Legislation is currently being considered by the Finance Expenditure Committee in Parliament.

Source: Business.govt.nz

Minimum wage rises by $1.20 on 1 April 2022

When: 1 April 2022

What: The new minimum wage rates, before tax, are:

  • Adult – $21.20 an hour (up from $20.00)
  • Starting-out – $16.96 per hour (up from $16.00)
  • Training – $16.96 per hour (up from $16.00)

Why: By law, the Government must review the minimum wage rates every year.

What you’ll need to do:

  • If you do have staff on minimum wage, send them a letter or email to let them know about the increase.
  • If any workers are on starting-out or training wages, now is a good time to check when they’ll be eligible to move to the adult rate.
  • If you pay staff minimum wages, recalculate your budget for the rest of the year, as you’ll be paying out more in wages. To work out the updated cost of your employees, use the Employee cost calculator.
  • Check that any affected employment contracts are updated.
  • Talk to whoever runs your payroll system to make sure they’re ready for the changes.
  • If your payroll and employment agreements are a few years old, you can use this as a chance to update them using our free and easy tool, the Employment Agreement Builder. Note that it is a legal requirement to have a written employment agreement with all your staff.

Source: Business.govt.nz