Tag Archive for: Weekly update

Beyond Covid-19

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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.

We reopen our office on Monday 18th May

with some Covid-19 restrictions in place.

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.

Covid-19 Weekly Update 20.04.20

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As these unusual times continue there are a few things to remember – stay safe and shop local, shop local, shop local!

While we are in this lock down situation together we need to remember to help one another come out of it in as best shape as possible. The best way to do that is support every local business you can.

Various restrictions under Level 3 Lockdown may make it seem like Level 3.75 but at midnight on Monday 27th April some businesses will be able to start operating again, mainly without any public contact but with online or phone orders, contactless payment and similar things only.

Also if you are currently working from home you must continue to do so if it is at all possible. With that in mind we will NOT be reopening our office under Level 3 restrictions.

However Sari and our senior staff will continue to work from home. So far this has been a little frustrating at times but we are getting everything done you need us to do. We are also set up to use Zoom video conferencing so if you want to have some more personal contact then email us to make an appointment for a Zoom meeting. Anna and Libby are available Monday to Friday 9am ‘til 5pm while Neil and Sari are available seven days a week, including evenings if required.

Here’s a link from business.govt.nz for an explanation of various alert levels and operating guidelines for businesses

If you can’t find an answer to your questions here then just email or phone us, we are here to help our clients through the challenging times ahead of us as we work on re-establishing our businesses again.

Things to Remember

  • March PAYE payments were due today
  • GST returns for the periods ended 31 March are required by the 7th of May, however if you will have difficulty in making your GST payment please contact us and we will help you sort out a deferred payment arrangement with IRD. It’s important you put an arrangement in place rather than just not paying it.
  • If you have provisional tax (3rd payment for 2020 year) then this is also due to be paid. On 7th May As a result of recent government announcements about tax relief there has been some confusion around the need to pay this. If you have this due you must pay it as it is calculated on your year end 31 March 2020 figures, not current trading figures.

And of course remember to stay safe, don’t let your social distancing standards relax because we don’t want the community to be forced back into level 4 lockdown, and most of all be kind to each other.

Being kind includes supporting every local business we can so they are here for us to enjoy into the future, so look for local business offering deliveries from the 28th April, buy from them and use other local service providers – shop local!

Covid-19 Weekly Update – 05.04.20

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Well it certainly has been an interesting week and a half as we all get used to working and living differently during the Covid-19 lockdown.

It seems that every day the government is providing more clarification as to things we can do day-to-day and, most importantly for you, how you can use the wage subsidy. There have been many conflicting pieces of advice from employment lawyers and employment relations businesses. As we have digested these varying pieces of interpretation we have taken a ‘use it responsibly and fairly’ attitude.

On Friday Minister Grant Robertson clarified that if a wage subsidy received for a part time employee is more than they would usually get paid then the balance can be used towards paying other employees. The key thing is it MUST be used to pay staff wages.

Wage Subsidy for Sole Traders, Self-Employed and Contractors

We have had many queries from clients who are sole traders, partners in partnerships, and contractors as to whether they can get the wages subsidy. The answer is yes, provided you meet the necessary criteria.

Contact Anna at anna@savage.co.nz if you need help filling in the application

Keeping wage subsidy records

You may be asked to prove you have applied the wage subsidy correctly and we will need to account for any subsidy you have received when we prepare your annual accounts at the end of the year so it is important you keep a record of how you spend the money the government gives you for wages.

We have prepared a very simple spreadsheet that will help you keep track of the money you receive and pay out.

If we prepare your payroll for you we will do this for you and can send you updated figures on a regular basis so you know how much you have left to use for wages. If you want a copy of the spreadsheet just email neil@savage.co.nz and he will send it to you

At the end of the year please email it back to us with your annual accounts information.

Minimum wage increase

If you are an employer it is important to note the minimum wage rate increased effective from 1st April. Even during the current difficult trading conditions this is the minimum you must pay all of your staff

The rate increases from $17.70 to $18.90 per hour.

7th May Provisional Tax

If Sari normally contacts you prior to provisional tax payments she will still do so as many businesses may need to estimate their provisional tax down due to low trading / no trading in March and doubt about debtor payments.

As usual we will be sending out tax notices to you during April for 7th May payment.

If you have any queries contact Sari – sari@savage.co.nz 021-548-489

Annual Accounts

If you are using Xero or MYOB on-line and would like us to get started on your 2020 annual accounts please sign client questionnaires that were previously emailed to you in March, and send them to Sari.

Your bank may need these if you are looking for further support from them during these difficult times. We have two senior accountants as well as Sari working remotely from home who can work on these during the Covid-19 lockdown.

Remember, we are here to help you if you need some advice or assistance, just email or phone us, but most importantly please be safe and stay home so we can all get back to a level of normalcy as soon as possible.

 

Covid-19 Update – 30.03.20

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We certainly hope you are all well and sticking to the rules, everyone doing the right thing now will help businesses get up and running again. Having said that we are expecting the current four week lock down to be extended, to possibly eight weeks, and then restrictions to come off slowly I.E. – reverting back to level three restrictions for a few weeks then back to level two.

We have no definitive evidence of this but looking at what’s happening overseas this is what we expect. The real message here is we are in this very unusual and curious situation for many weeks to come and we need to be prepared for it.

Savage & Savage invoicing and payment

We will be emailing March invoices as usual in the next week, however these will not contain the same level of detail we normally include as we are working remotely and don’t have access to some of the information we use each month due to not being able to get in to our premises. If you require a fully detailed invoice we can send this to you when we are able to return to the office, but do note the totals won’t change.

We also understand it a difficult managing cashflow for many so with this in mind we will work with clients to make payment over time if required. We are in exactly the same position as many of our clients, we are a small business too and are subject to the same pressures of not being able to work at normal levels to generate income.

It is important we all pay our regular invoices on time so the economy keeps ticking over but as I said above, we are very happy to work with clients to arrange payment over a few months. Please just contact Neil and he can make suitable arrangements with you. His contact details are shown below.

Wage Subsidies

Many of you will have applied for and received the wage subsidy. You need to try your hardest to pay employees named in the application at least 80% of wages. If you want and are able to you could give employees the option to top it up to 100% using annual leave or sick leave. If it isn’t possible pay 80% you need to pay at least the subsidy rate. Employers are obliged to retain the employees for whom they receive the subsidy for 12 weeks.

Paying the subsidised wages

When processing the pays in payroll, work out what 80% of their normal hours would be and pay that as ordinary hours. By paying it as ordinary hours PAYE, Kiwisaver, holiday pay etc is calculated as it should. If the employees hours vary you will need to work out an average of the last 4 weeks hours. If the last 4 weeks are not an accurate picture of their usual fluctuations in hours you can average out over the last 12 months. If topping up pays with annual leave or sick leave, use appropriate pay code.

Please set up a spreadsheet or similar to keep track of how much of the subsidy is used each pay as any balance unused is earmarked for wages but can be used for other employees. If you use the full subsidy amount for each employee each pay period, then you wouldn’t need to track it.

Reconciling transactions

Sole trader

The subsidy payment received has no GST. Code to other/sundry income, change to no GST. It is taxable as it is received by the end user.

Companies that pay end of year Shareholder Salary – no other employees

The subsidy payment received has no GST. It is taxable to the shareholder when taken as drawings. As it will be used over a period of time and is a grant earmarked for wages, it should be coded to a liability account called Subsidy with Conditions.  We are more than happy to take care of coding if you’d like. We will then transfer the subsidy out of the liability account as it is used up and ensure correct coding and tax treatment.

Company or partnership with employees

The subsidy payment received has no GST. As it will be used over a period of time and is a grant earmarked for wages, it should be coded to a liability account called Subsidy with Conditions.  We are more than happy to take care of coding if you’d like. We will then transfer the subsidy out of the liability account as it is used up and ensure correct coding and tax treatment. Taxable to employees as wages.

For all employers (Sole traders excluded), the income is not taxable and it is not a deductible expense when paid, we will take care of coding and ensure correct treatment when we prepare your annual accounts.

Rent and Lease Obligations

The impact for this Covid-19 event is likely to be long and lingering,

With this in mind, we recommend you contact your landlord sooner rather than later to discuss your lease and rent situation. Many leases are based on the Auckland District Law Society form and depending on the version of the ADLS Lease form you have signed with your landlord (clause numbers may vary) you should be able to negotiate a reduction in rental to a ‘fair proportion’ of the rent and outgoings as provided under clause 27.5 (No Access in Emergency) of the lease agreement.

  • There exists an “emergency” that prevents the tenant from gaining access to the premises to fully conduct business from the premises because of reasons of safety of the public

27.5 (a)       Access is prohibited

27.5 (c)       Restriction on occupation of the premises is by a ‘competent authority’ (the government of New Zealand)

We believe that lease clause 27.5 can be relied on to enter into negotiations with your landlord.

We have seen a range of negotiated results and it is apparent landlords are prepared to share the pain everyone is experiencing, the question of what is a fair proportion of rent and outgoings is going to vary depending on your business and lease term and conditions but you should be talking with your landlords now.

Please don’t hesitate to contact us if you have any questions.

Covid-19 Update 23.03.20

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These are certainly curious and challenging times for everyone in the community and we know businesses will need all the support they can get to survive through the next few months.

At Savage & Savage we are being pro-active and have set up systems to allow us to operate with a similar level of service to you, our clients.

We have taken the decision to close our office effective from 5pm this Wednesday

The Government has just moved the warning level for Covid-19 to level three and expect to move it to level four within 48 hours.

This means total lockdown for all but essential businesses

You can still drop paperwork in to us using the mail slot in the wall beside the front door. Neil will check for mail every few days.

As the majority of our clients deal with most things by way of email and telephone we expect this inconvenience to have minimal impact for much of the work we do for you. We have set our senior staff up to work from home and they will have remote access to our secure servers and email so we can continue to work as normally as we can in these trying circumstances.

We do understand these are going to be difficult times as we are also a small business facing many of the same challenges as our clients.

We will help you and work with you to ensure everyone survives this challenge.

We expect the government to roll out more support for businesses and we will keep you updated on help available to businesses.

Please do not hesitate to contact us for advice and assistance.

If you have any queries please contact us either on our normal phone line that will be diverted to Neil Hodgson’s mobile if we are forced by government restrictions to close our offices.

Contact details for our senior staff are:

Sari Hodgson       021-548-489       sari@savage.co.nz

Anna Patchett   021-276-7393      anna@savage.co.nz

Libby Gledhill      027-313-4382    libby@savage.co.nz

Neil Hodgson     021-445-142        neil@savage.co.nz

Most of all please be safe, take appropriate precautions, stay in touch with lonely and vulnerable people (at least by phone) and take care of yourselves.

Kind regards to you all