Is your business ready
Is your business struggling with the impact of Covid-19?
As your accountant we are here to help you get through this. We are an approved service provider through Northland Inc’s Regional Business Partner which means our clients are able to apply for a grant of up to $2,000 for us to assist your business with getting through this. We are able to help with:
- Business Continuity Planning
- Finance and Cashflow Management
See below for further details of these services.
To apply for the funding your business must:
- Undergo an assessment with Northland Inc
- Have fewer than 50 full time equivalent employees
- Be registered for GST in NZ
- Be perating in a commercial environment
- Be a privately owned business, or are a Maori Trust of incorporation under the Te Ture Whenua Maori Act 1993
Please call us to discuss how we can assist you to get access to this funding.
Once you know what the service is about you will need to register with Regional Business Partners https://app.regionalbusinesspartners.co.nz/Business/SelfRegister or Northland Inc. They will call you and discuss your needs and confirm your eligibility. Advise them that Gilmore Taylor referred you and they will link you to us as the service provider. Once approved we can work with you to complete this via phone, email, Zoom or Skype.
The most valuable business asset is your staff. During the uncertain times of Covid-19 virus we can provide HR Consulting support. We can give you guidance to get through the challenges your business may face.
We can assist in the following key areas:
- Advice on employment agreements, employment legislation including dealing with redundancies, and employee policies and procedures
- Guidance for managers in dealing with performance problems if you are operating
- Support in administering the payroll
- Advisory and assistance with application for government support
- Best practice processes
As you emerge from the Covid-19 business interruption we can assist with rebuilding your workforce if you were required to downsize.
Recruitment and Selection services include:
- Assistance with advertising for employees
- Shortlisting and interviewing
- Reference checking
Our staff regularly attend EMA conferences, briefings and other trainings keeping our firm up to date with the ongoing changes in this area. Over this period we have been in touch with EMA and Ministry of Social Development so we can keep on top of the ongoing changes.
Our HR team has a history of helping clients with implementing changes in structures and helping them get through difficult times.
Finance and Cashflow Management
How will COVID-19 impact your business? Are you holding too much inventory? If your debtor days are drawn out what is the impact on your ability to pay staff wages and debts? Surviving a business interruption requires you to spend time understanding the impacts on your financial position and management of cash flows.
We can provide you with accurate, timely, informative cash flow forecasting reports that enable you to:
- Realise and understand when cash is available and required
- Plan and prepare for business changes, stock control, and taxes
- Analyse and anticipate key expenses
Equipped with this information, we’ll work with you to develop action plans to get the business through the challenges it faces with Covid-19.
A wide range of financing options exist, each with their pros and cons. At Gilmore Taylor Associates Ltd we have strong relationships with financers and have the experience to assist you in securing the best financing option for your business.
Let our experienced team explore the best financing options with you and get your business in a stronger position to cope with the changes it will face.
Given the challenges our country and business are facing, getting through COVID-19 and continuing in business mean previous forecasts and budgets will need to be addressed. We are experienced in a number of forecasting applications where we can work with you to see the outcome of the current climate on your business.
Business Continuity Planning
We all want our business to come out of this ready for the opportunities that will present themselves. There is a large amount of uncertainty such as entitlement to government subsidies and business banking which are changing daily as more information is coming through.
We work with businesses to ensure they can maintain business functions during the Covid-19 threat and resume as quickly as possible to normal business, in whatever form this may take.
We can assist with:
- Employee retention and management
- Identifying risk, risk mitigation
- Business processes
- Flexibility and resilience to deal with issues
- Communications with business partners.
- Management reporting, giving you an independent view of your business and give insights from an external perspective of actions required
- Business monitoring
- Business mentoring during these challenging times.
COVID-19 Wage Subsidy Update 30 March 2020
Due to a number of uncertainties over treatment of the wage subsidy, the government have given further guidance regarding the use and treatment of wage subsidies.
We have employees earning less than the subsidy – what do we do with the excess?
If your employee’s usual wages are less than the subsidy, you must pay them their usual wages. Any difference should be used for the wages of other affected staff – the wage subsidy is designed to keep your employees connected to you.
Is the subsidy amount the gross amount paid to employee or net?
Your employee will need to pay tax on their wage subsidy payment as it’s paid to them as part of their normal wages. This means it’s subject to the usual deductions e.g. PAYE, Student Loan, Kiwisaver, ACC etc.
What happens if I cannot afford to top my employees up to 80%?
Employers are required to agree that, for the duration of the subsidy, they will make best efforts to retain the employees the subsidy was paid for.
If you are receiving the COVID-19 Wage Subsidy, you must:
- Try your hardest to pay staff at least 80% of their usual wages;
- If that isn’t possible, pay at least the rate of the subsidy that applies to that employee
A business must take active steps to mitigate the financial impact of COVID-19 on their business. This could include:
- drawing from your case reserves (as appropriate)
- activating your business continuity plan
- making an insurance claim
- proactively engaging with your bank
- speak to your accountant
- seeking advice and support from:
- the Chamber of Commerce
- a relevant industry association
- the Regional Business Partner programme (Gilmore Taylor Associates are registered to assist with COVID-19 Support whether you need cashflow assistance, HR help or Business Planning).
I already applied for the COVID-19 Wage Subsidy, but only for some of my employees. Can I make another application for my remaining employees?
Yes. You can make an additional application for any of your employees whom you haven’t already applied for.
If I am a shareholder in a business, can I apply for the wage subsidy?
If you work for the business and you are paid a wage, salary or draw an income for the work you do for the business, you can apply for the wage subsidy.
If I work for a business where there are multiple shareholders, how do I apply for the wage subsidy?
The business you work for should make one application for all of its employees and shareholders who work for the business and are paid a wage, salary or draw an income for that work they do.
Which form do I use?
You can use the ‘employer’ form and the other shareholders if they are paid a wage, salary or draw an income for the work they do for the business, need to have their details entered into the employee section of the form.
If my business operates in a partnership, can I apply for the wage subsidy?
If each partner that works for the business is paid a wage, salary or draws an income for the work they do, you can apply for the wage subsidy.
Which form do I use?
One partner must apply on behalf of the other partner(s) using the ‘employer’ form and using the other partners as named employees.
Non-essential business + Minimum waged worker
James is a barista at a Wellington café. James earn the minimum wage. The café is closed for the lockdown and has had a 30% loss in revenue. James’ employer cannot afford to pay any wage to James, but wants to keep him on. James does not want to use his annual leave entitlements.
James’ employer can access the wage subsidy and pay $585.80 per week to James, without James being required to do any work. James retains his annual leave entitlements to use at a different time.
Able to do some work from home + Full-time worker
Sam is a civil engineer. He usually works 40 hours per week at $30 per hour, with a usual gross income of $1200 per week. The business is non-essential and closed for the lockdown and has had a 30% loss of revenue. Sam can do some work from home over this period. He works 30 hours per week for the duration of the Alert Level 4 lockdown period.
Sam’s employer can access the wage subsidy and pays Sam his usual salary at the agreed reduced hours, which is $900. Sam’s employer can use the $585.80 per week to subsidise Sam’s wages, this means Sam’s employer will top up the wage subsidy with $314.20 to compensate the hours Sam worked.
Non-essential business + Can do some work from home
Phil is an HR advisor in a medium-sized business and works full time. The business is non-essential and closed for the lockdown and has experienced a 30% loss of revenue. Phil can do some work from home. He does 8 hours per week. His hourly rate is $25 per hour.
Phil’s employer can access the wage subsidy. Their revenues have dropped so much that they are worried as they will be unable to retain their staff. Under employment law, Phil must receive $200 per week for the hours worked. His employer can use the remaining money from the subsidy for other affected employees.
Non-essential business + Unable to work
Craig is a waiter at a successful restaurant chain that also needs to close during the lockdown. Craig was getting paid $1,000 per week. Craig’s employer has committed to paying full wages to their staff as they know that such workers will be in demand as the lockdown ends. The restaurant has suffered a 30% loss in revenue due to COVID-19.
Craig’s employer can access the wage subsidy scheme to pay Craig $585.80 per week, and the employer can then top that up with $414.20 per week to ensure Craig receives his full income.
Essential business + Able to work
Steve is an essential services worker, ensuring certainty of electricity supply. Steve is really busy, working his normal hours and getting paid at his normal rate, and his business has not been affected by COVID and does not require support to pay or retain its staff.
Steve’s employer does not need to apply to the wage subsidy scheme.
FAQ – COVID 19 in the workplace
We are fielding a lot of questions from clients during this time regarding wage and leave subsidies.
There are a number of questions for which there is no definite answer yet – marked as pending – as soon as we have further information we will update this & our Facebook page”.
Below are some of our frequently asked questions and answers –
What is the tax treatment of any wage and leave subsidies we receive?
Any payments received as part of the COVID-19 response package are not GST-able and are excluded income to the employer. Subsidy payments made to employees are taxable to employees, but not deductible for income tax to employers. For the self-employed the payment will be taxable.
We have employees working more than 20 hours per week, but they earn less than $585.80. Do they now receive the $585.80 during this time?
My employee wants to use annual leave over this time and receive 100% of their pay, but we have applied for the wage subsidy, how does this work?
If the employee wants to take annual leave to continue receiving their normal wage, they can use holidays that have been accrued. At the discretion of the employer, holidays in advance may also be taken if both parties agree. It is still unclear how the wage subsidy and annual leave will work together, and we will update this once it becomes clear.
Unless employees are sick, they cannot use sick leave unless they are sick.
When we enter Alert Level 4, our revenue will dry up. We want to retain our workers for when we are able to return to work, but we can’t afford to pay 80% over this time even with the wage subsidy. Can we agree to pay a lesser amount?
At this point in time, the wording says you must make your best endeavours to pay 80%. There is no definition regarding what this means e.g. should you be asking for a bank loan to top up to 80%. Employers must document their best endeavours.
What is 80% of normal income – does it include overtime?
Yes overtime, commissions and shift allowances are included as part of the calculation of normal income.
What are essential services?
If an over 70 employee self-isolated BEFORE alert 4 was entered, are they eligible for the wage or leave subsidy?
Can you use the excess of one employees wage subsidy (who receives less than $585.80) to subsidise one who earns more than this?
When applying for the wage subsidy, we are required to enter each employee one by one. Will there be a bulk upload option?
Yes, MSD are working on this.
We are an essential service and a staff member has a high risk family member at home. Are they covered by the leave payment?
Once everyone is out of our place of business, am I able to return to clean or complete payroll?
No, unless you are an essential service you need to remain at home.
WHAT YOU NEED TO KNOW
You must ask your employees for their permission to apply for wage and leave subsidies and have this in writing.
Any reduction in normal pay MUST be agreed to in writing by employees.
When applying for wage and leave subsidies you will be asked at a later date to show drop in income and other records used in the application.
Kiwisaver contribution holidays are now called Saving Suspensions. To apply for a Savings Suspension you can either apply online if you are registered for MyIR and going through to your Kiwisaver, or complete a Savings Suspension request form searching for KS6 on the Inland Revenue website www.ird.govt.nz
Given the rapidly changing situation, please check our website or our facebook page for updated information. We will be sending out newsletters with regular updates, but please contact any of our team with any queries you may have.
Farmers - register for safe practice
Update – 24 March 2020
The Ministry for Primary Industries (MPI) has set up a register for safe practice in the sector as New Zealand moves to National Alert Level Four in response to COVID-19, says Director-General Ray Smith.
“Alongside Minister O’Connor I met with more than 90 sector stakeholders by conference call yesterday,’’ Mr Smith says.
“It was an extremely constructive meeting and I know that everyone who took part wants to do their best for New Zealand as we meet the COVID-19 challenge.”
Mr Smith says MPI requires safety assurances from operators that their processes protect workers and the public by limiting interactions between staff and reducing the potential spread of COVID-19.
“The Government’s declaration of essential services approves those operating in the primary sector, but we just need to verify that operators are following safe practices.
“We are asking eleven critical questions about how you intend to stop any spread of COVID-19 (please see service registration here.),” says Mr Smith.
There are a couple of simple questions operators can ask themselves before registering:
- Do you have five or fewer people (including the owner) working at each business site?
- Can you achieve social distancing measures between staff in your workplace, including travelling, to and from work?
- If you answer YES to both of those questions, then you do not need to fill in the form.
- If you answered NO to either of these questions, you MUST fill in the form.
- If in doubt, fill in the form.
“Production chains should work to achieve separation between staff and adopt mitigation measures, such as protective gear and equipment, where possible,” says Mr Smith.
Mr Smith says MPI will do its best to advise and support the sector over the coming days and weeks.
“We are asking businesses to be registered by 5:00pm on Friday 27 March 2020. They should keep operating and are expected to already have health procedures in place.
“We’re all working together to ensure that our vital food production sectors can operate safely,” says Mr Smith.
Primary sector businesses may contact MPI at 0800 00 83 33 or firstname.lastname@example.org for further details on registering or the registration process.
For media enquiries, please contact May Tien, Principal Advisor MPI Communications, at email@example.com.