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Well it has certainly been an interesting seven weeks; dealing with level 4 lockdown conditions and then easing into level 3 before finally getting back to a level of normal activity under level 2 conditions. Obviously things will never go back to business-as-usual as it was before Covid-19 raised its ugly head but we are able to get back to business and work on rebuilding our businesses.
Then we had the 2020 Government Budget announcements, a budget designed to make sure as many businesses as possible survive and are able to rebuild in a new economic environment.
Some businesses will never be the same, some will close and others will adapt and grow, taking advantage of the opportunity to revisit how they do business.
While the office will be open please note Sari will still be working from home for a few more weeks. She is available for Zoom video conference meetings, on her mobile (021-548-489) or by email (sari@savage.co.nz)
Visiting our office
For us our focus will be on helping you as it always has been, the success of our clients is really important to us and to help you we need to make sure we have a workplace that is safe for you and our staff. This means if you do need to come to our office you will notice a few small changes that are designed to meet government requirements for operating under level 2 conditions.
We will have social distancing practices in place, there will be a table at reception for you to leave packages, there will be hand sanitiser readily available, there will be single-use facemasks available for you to use if you are meeting with a staff member and you will be required to register as a visitor to our office for contact tracing purposes whenever you visit, no matter how briefly.
Contact Tracing
We will be using the “I’m Here” contact tracing system, you will need to use your phone to scan a code when you arrive and depart. We have chosen this because it is a simple solution to use, however, our staff will be able to assist if you have any issues using it. There will also be a form to fill in if you don’t have a mobile phone. You can check out the system at www.imhere.nz so you know what to expect when you do visit us.
The Budget
The one Budget item that will have the most impact immediately for many businesses is the announcement of an extension to the Wage Subsidy Scheme.
If your business has suffered a 50% or greater decline in turnover for a two month period then you are able to apply for a subsidy to help you pay staff wages for another eight weeks.
Small Business Loans via IRD
Announced before the budget but included in the overall Covid-19 response package is a loan scheme for SMEs. The scheme (https://media.ird.govt.nz/articles/government-boosts-cashflow-support-for-small-businesses/) for SME’s is to be administered by IRD. This will be interest free for 12 months or low interest for up to five years with no repayments for the first two years if you take the low interest option. It will be administered through IRD and provides for loans of $10,000 per business plus $1800 per employee up to a maximum of $100,000.
While we can’t make the application for you we will give any of our clients up to an hour free time to help you with your application, just email Sari, Anna or Libby to arrange a time to talk.
We hope you are all staying safe and we’re looking forward to talking with you sometime soon.
It has been a couple of weeks since we sent you an update and a number of things have happened in that time, prime among the the announcement of the rules that will apply when we head into the Covid-19 Level 2 environment. All businesses will need to alter how they work and it’s important the changes are well thought through as these restrictions are likely to be with us in one form or another for many months to come.
Our offices will be open for business again when Level 2 restrictions come into place.
We are excited to be able to have everyone back at work, albeit with restrictions and changes to how we operate.
Because Sari has an autoimmune condition she won’t be back in the office for a few weeks yet but will still be working from home by email, mobile phone and Zoom video conferencing.
We are currently working on a Covid-19 plan for the office and the biggest impact on you will be when you visit our office, we will have social distancing rules in place you will need to observe. Because a lot of our communication with you is via phone and email our main focus is going to be on ensuring the safety of our staff when we do return.
Government announcements and support
The business environment for the foreseeable future is going to be quite different to what it was before Covid-19 raised its head, every business is going to face challenges and will have to review what it does and how it goes about its business.
The government has acknowledged there will be very challenging times ahead with much higher unemployment (especially from the hospitality and tourism sectors) and it appears to be offering assistance to SME’s (Small to Medium Enterprises) that make up a huge proportion of businesses in this country.
Small businesses that provide services and products to local regions are going to be vital to New Zealand’s economic recovery as we will be less reliant on tourism until our international borders reopen, this could be a number of years away.
Along with various tax changes and the significant wage subsidy the government recently announced a loan scheme (https://media.ird.govt.nz/articles/government-boosts-cashflow-support-for-small-businesses/) for SME’s. This will be interest free for 12 months or low interest for up to five years with no repayments for the first two years if you take the low interest option. It will be administered through IRD and provides for loans of $10,000 per business plus $1800 per employee up to a maximum of $100,000.
This is in addition to various loan guarantee schemes put in place earlier with the banks.
Looking ahead
While we may appear to be over the very worst of the Covid-19 outbreak there is every possibility it could re-emerge as a significant health threat during the winter months so it is important we all do our bit to avoid having to go back into a Level 4 lockdown situation again.
So for the next two years let’s have local and New Zealand holidays and visit places you haven’t been before, you may be surprised at what New Zealand has to offer. And of course shop local, support those businesses that have supported our community for many years and help them stay in business so they can be part of our future too.
In the next week we will be sending an update on what you will need to do if you visit our offices.
Take care and continue to do your bit to keep everyone in our community safe.
Well it continues to be an interesting time we are working our way through. The great news is that the Covid-19 lockdown appears to be having a positive effect by controlling the spread of this illness.
While all the signs are good we still have a long way to go, firstly to get through the immediate crisis and then a very long road to economic recovery. We are expecting some of the lockdown restrictions to be eased but not expecting them to be lifted totally for a few months yet.
Today’s Government Announcement re Level 3
The Government has announced general conditions for operating under Level 3 restrictions when they do drop the Covid Threat Level from Level 4 to Level 3.
It appears there will still be strict restrictions on who can open for business and how those businesses operate. The key point is the social distancing 2 meter ‘bubble’ must be retained. We’re uncertain how this will effect Savage & Savage and whether or not we are able to operate from our offices. We are expecting to not be able to operate from the office however we do want to get back as soon as we can and will be seeing if the detail in Level 3 lockdown rules allow us to. Watch this space.
Planning
With that in mind business owners need to start thinking about what their business is going to look like post Covid-19. Some of the things to consider are when will your business be able to be up and running again? Will your business clients still be in business? How will your general customer base have changed? What will your cash flow look like for the next two years? How many staff will you need? What is your tax liability for the next two years? And many other things.
There are many things to consider and every business owner is going to have to do some serious thinking and planning. We can help you with your cashflow forecasting for the next few years so we are happy to offer our clients an hour of time from either Anna or Libby, at no charge, to discuss what you need to think about when preparing a cashflow. If you’d like us to prepare your cashflow for you we will give you an hours’ free time when preparing it.
Recent tax changes announced
The Government has announced some changes to various taxes and payments, in particular tax carry back changes (tax losses carried forward). When we get exact details about the implementation of these changes we will share those with you but in the meantime you will need to do some panning, both for your cashflow and future tax purposes.
So we can accurately estimate your future tax liabilities it’s important we have the most up-to-date information as possible so please don’t delay sending your annual accounts information to us. By having your tax position for 2020 established we can then look at forecasting 2021 for the loss carry back if you have one. The tax relief measures will be easier to use if books are up to date.
Attached is a factsheet from the Beehive – Supporting small and medium sized enterprises during the COVID-19 crisis. This is a summary of the latest support measures being rolled out by the government.
Annual Accounts
We operate on a first in – first out basis unless there are urgent business needs like refinancing business sale etc so the sooner you get your information to us the sooner we can get your annual accounts finished.
Tax payment relief
When it comes to IRD payment arrangements your tax position needs to be established first, this goes for all tax types. It’s better to get in contact with us to request an IRD payment arrangement rather than just not paying – even though IRD will be lenient and write off interest and penalties it is much better to have a formal arrangement in place.
Payment of our invoices
We understand these are difficult times financially for many businesses and we don’t want this to be a barrier to us doing work for you so if you would like to make an arrangement to pay your account with us over a period of time please contact Neil at neil@savage.co.nz . We want to make sure we help all of our clients as much as we can.
Please continue to think about your safety if you are out and about.
We’re working on how we will operate under Covid-19 Level 3 restrictions when they come into place, hopefully in the not too distant future.