Covid-19 and visiting DM&Co: We are closely watching the government guidelines in terms of Covid as the safety of our clients and team is paramount to us. But ultimately we are here to support all clients and this is irrelevant of their vaccination status. For clients that are unvaccinated (or prefer not to disclose status) we have additional protocols that are required for the protection of you, our team and other clients. So, before visiting us in person, please get in touch (via phone or email) if you would like to meet and we can arrange an appropriate way to do this.

DM&Co Announcement:
30 September 2022

Welcoming a new partner – Christy Burgess

We are proud to announce that Christy Burgess is now a Partner at DM&Co.

The partners have worked with Christy in excess of 20 years and the promotion recognises Christy’s valuable contribution within the firm and her strong client relationships. It also facilitates the strong growth of the firm and ensuring our capabilities can meet that growth.

Christy has advised small and medium businesses, particularly clients in the professional and legal sector together with property clients and managing large investment syndicates. She also works closely with contractors and clients with Trusts. Working with both independent and large accounting firms she has accumulated a wealth of knowledge she shares with her clients to help them achieve their goals and evolve their businesses.

DM&Co Newsletter:
29 March 2022

The Beginning of the End

With many of the mandates coming to an end and Air New Zealand announcing that its international flight programme will kick off with direct flights to New York later in the year there is a general feeling that a corner has been turned and COVID may no longer dominate our everyday lives. However, many clients are still facing staff shortages and reduced turnover until people return to offices and the city. The Government has a number of support packages that are detailed below:

Short Term Absence Payment

This is available to employers to pay workers who follow public health guidance and stay at home while waiting for a COVID-19 PCR test result.  It is also available for self-employed workers.  To be eligible, workers need to be unable to work from home. People doing Rapid Antigen Tests (“RAT”) are not eligible for the Short-Term Absence Payment because they don’t need to wait long for results.

There is a one-off payment of $359 for each worker. Employers or the self-employed can apply for any worker once in any 30-day period unless a health official or doctor tells the worker to get another test. 

More information and how to apply can be found here: https://www.workandincome.govt.nz/covid-19/short-term-absence-payment/index.html

Leave Support Scheme

The leave support scheme is available to employers and the self-employed to help:

• Pay employees who must self-isolate due to the COVID-19 rules for at least 4 consecutive calendar days; and

• Cannot work from home

Provided the above criteria is met the employer/self-employed is eligible to apply for the following:

• $600 for full-time workers who are working 20+ hours per week

• $359 for part-time workers who are working < 20 hours per week

If an employee needs to keep self-isolating for at least 11 calendar days or more AND cannot work from home, then the employer can reapply for a second week payment.

Detailed declarations are required to confirm eligibility requirements and to acknowledge obligations regarding use of the subsidy. Key points:

• The employee(s) must be unable to work from home

• The employee is required to self-isolate (i.e., not a voluntary choice to isolate)

• The employer will not unlawfully compel the employee(s) to use leave entitlements for the period they receive the subsidy for

• The employer remains responsible for paying the ordinary wages or salary

• Pay at least the full amount of the subsidy to the employee BUT where the ordinary wages or salary of a named employee is lawfully below the amount of the subsidy, pay the employee that amount (i.e., their normal pay).

More information and how to apply can be found here: https://www.workandincome.govt.nz/covid-19/leave-support-scheme/how-to-apply.html

COVID-19 Support Payment (“CSP”)

The CSP is a payment to help support businesses that see a decline in revenue by 40%+ due to the impact of COVID in NZ.

This payment will be $4,000 per business plus $400 per full-time employee (20+ hours per week) and $240 per part time worker (< 20 hours per week).

Up to 3 CSP payments will be available with the first period beginning 16 February 2022 and ending on 4 April 2022. Key criteria are:

• 40% decline in revenue in any 7-day period after 16 February 2022

• Comparison period is a typical 7-day period between 5 January 2022 and 15 February 2022. Alternatively, you can use a typical 7-day revenue period in the 6 weeks between 5 January 2021 and 15 February 2021 (i.e., the previous year).

More information and how to apply can be found here:
https://www.ird.govt.nz/covid-19/business-and-organisations/covid-19-support-payment/apply-for-the-covid-19-support-payment

Small Business Cash Flow Loan Scheme (“SBCS”)

The amount available under this scheme has increased from $10,000 to $20,000 plus $1,800 per full-time equivalent employees. Applications are open until December 2023 and employers (or self-employed) who applied previously can top up their loan by $10,000 (plus any amount they were eligible for previously but did not take). Key points of the scheme:

• Interest free if the loan is repaid within 2 years

• Repayments are not required for the first 2 years, but after 2 years any unpaid balance will be charged interest at a rate of 3% (for a maximum loan term of 5 years).

• You must show a 30% drop in revenue due to COVID-19 over a 14-day period over the last 6 months (compared with the same 14 days a year earlier). However, if the previous year was also affected due to COVID-19, you can compare the same 14-day period, 2 years earlier).

More information and how to apply can be found here: https://www.ird.govt.nz/covid-19/business-and-organisations/sbcs/apply

Deadline for filing your 2021 Tax Returns is almost here.

For those with 31 March balance dates, there is now less than a week to go before Inland Revenue’s deadline (although a small “COVID relief” extension can be obtained). For those that haven’t already, please get us your information in as soon as possible so that late filing penalties are not imposed by Inland Revenue.

DM&Co Newsletter:
17 December 2021

2021 – another year of resilience and change

The end of the year is upon us and it has been another tough one for many – especially those in Auckland and the tourism & hospitality (& associated) sectors.

2021 saw a few changes on the tax front with the top tax rate increased to 39% from 1 April, interest deductions on rental properties dropping to 75% from 1 October on existing properties (excluding new builds) and the Brightline test extending to 10 years. The biggest bombshell on the tax front was the inability to get a tax deduction on interest for borrowings for the purchase or expenditure on residential properties from 27 March 2021 (excluding new builds).

Red Tape – it just gets longer

One key observation this year is the continual increase in compliance and ability to obtain lending in a timely fashion (if at all). The responsible lending code is adding a huge amount of compliance to lenders and the amount of information required to obtain or renew finance will be far more difficult going forward. Near our office we have seen two banks close their branches so talking to someone in person will be even more difficult in the future.

In addition to lending, the anti-money laundering legislation (AML) means ID verification (and in some cases financial wealth verification) will be required when engaging with banks, accountants, lawyers, and real estate agencies.

In terms of property, records now need to be maintained for ringfenced rental losses (separate to other losses), lost interest deductions calculated and Brightline dates checked. And then there is healthy homes compliance.

GST and 2022 Provisional Tax

Remember that GST for periods ending 30 November 2021 and the second instalment of 2022 provisional tax is due 15th January 2022. Please try to have your GST Returns completed and your provisional tax reviewed before the Christmas break so that the payment can be loaded for the due date.

Deadline for filing your 2021 Tax Returns

We are already 9 months into the current financial year so, for those that haven’t already, please get us your information so that we can ensure your Tax Return is filed on time.

Holiday Break

It has been a second year that will we remember for a long time – another lockdown, major (and unforeseen) changes for residential investors, building material shortages, rollout of vaccinations, property values continuing to increase despite the forecasts, Crusher out/Luxon in, and the introduction of a traffic light that is very different to the Cobb & Co drink many of us remember as kids.

Throughout this we have continued to be inspired by our clients and also thankful to live in this special corner of the world. We thank you for your continued support and wish you an enjoyable break. We’re looking forward to being part of your 2022.

We are a dog friendly office so feel free to bring in your canine companion when coming in to see us next year – the team love meeting your additional family members.

DM&Co Newsletter:
21 September 2021

Continuation of Wage Subsidies – Round 3

The wage subsidy scheme has again been extended for a further 2-week period. This is the third round of the subsidy since the August 17 lockdown occurred.

Applications for the new round of wage subsidies are already open and applications for the previous round of the subsidy closed on the 16th of September.

Not applying for the previous round of subsidy does not exclude you from applying for this current round.  Businesses who did apply previously should have received an email advising that they can reapply (subject to the same criteria being met).

Wage Subsidy Eligibility Criteria:

Applications for this round of the subsidy will remain open until 11:59pm on Thursday 30th September.

The key criteria is that revenue must have fallen (or expected to fall) by at least 40% over the new revenue test period of 14 – 27 September 2021 when compared to a typical 14-day consecutive period in the 6 weeks period prior to the move to Alert Level 4 on 17 August 2021. 

You can only be in receipt of one wage subsidy at a time meaning you cannot apply until 2 weeks has passed from your previous application date.

For details of how to apply (& full details on eligibility requirements) go to:
https://www.workandincome.govt.nz/covid-19/wage-subsidy/index.html

Resurgence Support Payment (RSP) – Round 2

The second round of the RSP is now available.

The key criteria is that the business must be able to show a 30% decrease in revenue in a 7-day period from 8 September onwards compared with a typical 7-day period during the 6 weeks prior to 17 August.

While the wage subsidy is to help businesses meet wage costs, the RSP is a one-off payment which is to help businesses meet other costs (such as rent). 

Application for the RSP will remain open for 1 month following the return to Alert Level 1.

For details of how to apply (& full details on eligibility requirements) go to: https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment/apply

DM&Co Newsletter:
3 September 2021

Continuation of Wage Subsidies

The wage subsidy scheme has been extended for a further 2-week period. 

Although not confirmed, the expectation is this will continue until we return to lower alert levels. This may mean going forward eligibility may be different for different areas under different alert levels, for example, the Auckland region currently.   

Applications for the new round of wage subsidies is open from 9am today (3rd September) and applications for the previous round of the subsidy closed yesterday.

Not applying for the previous round of subsidy does not exclude you from applying for this current round. Businesses who did apply previously should get an email advising that they can reapply (subject to the same criteria being met).

Wage Subsidy Eligibility Criteria:

Applications are open from 9am Friday 3rd September and will remain open for 2 weeks.

The key criteria is that revenue must have fallen (or expected to fall) by at least 40% over the new revenue test period of 31 August – 13 September 2021 when compared to a typical 14-day consecutive period in the 6 weeks period prior to the move to Alert Level 4 on 17 August 2021. 

You can only be in receipt of one wage subsidy at a time meaning you cannot apply until 2 weeks has passed from the earlier application date.

For details of how to apply (& full details on eligibility requirements) go to: https://www.workandincome.govt.nz/covid-19/wage-subsidy/index.html

Resurgence Support Payment (RSP)

While the wage subsidy is to help businesses meet wage costs, the RSP is a one-off payment which is to help businesses meet other costs (such as rent). Previously the requirement was you must have been in business for at least 6 months, this threshold has now been reduced to 1 month.

Application for the RSP will remain open for 1 month following the return to Alert Level 1.

For details of how to apply (& full details on eligibility requirements) go to: https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment/apply

DM&Co Newsletter:
18 August 2021

Delta Disruption

The announcement on Tuesday (17 August), was something many medical professionals had considered inevitable but many of us hoped wouldn’t happen before mass vaccinations had been rolled out. The announcement has reminded us how quickly the confidence, that New Zealand has everything under control, can disappear.

With NZ moving to Level 4 both the Wage Subsidy and COVID Resurgence Support Payment have again been made available. The Support Payment is available whenever we are above Level 1 if the Government activates the scheme (which it has now). A reminder of both schemes, together with new payment rates is detailed below.

Resurgence Support Payment (RSP)

From 24 August 2021 Businesses, non-profit organisations and the self-employed can apply to receive the lesser of:

• $1,500 plus $400 per full-time equivalent (FTE) employee (up to a limit of 50 FTE) ; or

• 4 x the revenue decline experienced by the business.

The RSP is a one-off payment although it is possible the Government may decide to reactivate this if we remain in an increased alert level for a period of time. We will keep you updated if this occurs. 

The RSP is to support businesses meet costs (unlike the Wage Subsidy which is designed to help businesses continue to meet payments to employees). RSP is applied for through Inland Revenue whereas the wage subsidy is applied for through WINZ.

The RSP is not treated as taxable income, it is exempt, so businesses that apply and receive this payment will need to record the receipt in a separately identified code so that it is not mixed in with other revenues. However, for GST registered businesses GST is payable on the receipt of the Payment.

The qualifying criteria for the RSP is that the business must have had a 30% drop or more in revenue (or a 30% decline in capital-raising ability) over a 7-day period due to the increased COVID alert level. The decrease in revenue or capital-raising ability is compared with a typical 7-day revenue period in the 6 weeks prior to the alert level increase – but there are some exemptions such as those for seasonal businesses which is based on seasonality of the revenue.  

RSP Eligibility Criteria:

To qualify the business must have been operating for at least six months prior to the application and you must be at least 18 years of age.

• You can choose the start date of the 7-day period for calculating the revenue reduction as long as the whole 7-day period is within the increased level of alert.

• The calculations cannot be made using forecasts as a comparative. The calculation must be on actual results and be retrospective based on what has happened, not what you estimate is going to happen. For past RSP applications IRD have required your calculations to be submitted with the application for their review.

• Applications are not open until 8am on 24th August 2021. Application for the RSP will remain open for 1 month following the return to Alert Level 1.

For details of how to apply (& full details on eligibility requirements) go to: https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment/apply

Continuation of Wage Subsidies

The wage subsidy has been increased to $600 for people working full-time (20+ hours per week), and $359.00 for people working part-time (<20 hours per week). GST is not included in the receipt. This Wage Subsidy application covers a period of 2 weeks (based on the subsidy rates mentioned above).

At an absolute minimum, the value of the subsidy must be paid to employees, but best endeavours should be made to meet 80% of the wage/salary cost of each employee.

Please note that qualifying revenue does not include rent, interest, dividends or other types of passive or investment income.

It is expected that payments will be received within 3 days of the application being submitted.

Wage Subsidy Eligibility Criteria:

The criteria for the Wage Subsidy is different from the RSP. The decline in revenue must be at least 40% in predicted or actual revenue over a consecutive 14-day period, compared to the typical fortnightly revenue in the 6 weeks before the rise in alert level. You need to be able to show that the revenue drop is due to the increase in alert level, not just COVID-19 in general. 

Applications are open from 9am Friday 20th August 2021 and will remain open for 2 weeks.

For details of how to apply (& full details on eligibility requirements) go to: https://www.workandincome.govt.nz/covid-19/wage-subsidy/index.html

Plan and Safeguard your Business

If you haven’t already, now is a good time to make sure your business contingency plan is fit for purpose should alert levels change again. As demonstrated on Tuesday the alert levels can change in a matter of hours, day or night, so it’s important your business is prepared for this including having your team working remotely.

We realise times like this can be unsettling for business owners and those who are self employed but we are here to support our clients so please just get in touch if you have any questions concerning any of the above. We are here to help!

If you have any questions, don’t hesitate to contact us.
E: admin@darvillmellors.co.nz
P: 04 577 0105