St Andrews Accounting

Small Business Accountant

wage subsidy

Spring 2020

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Spring is in the air. Trees are flowering, lambs are finding their feet and we are starting to feel some hints of warmer weather. In this newsletter I cover a new wage subsidy the government has announced as a result of the latest COVID breakout along with an old topic that people often get confused by.

Resurgence wage subsidy

With the re-emergence of the COVID virus, the government has announced a further wage subsidy. The resurgence wage subsidy is available nationally for employers, including self-employed people, who are financially impacted by the resurgence of COVID-19 and changes to COVID Alert Levels.

To be eligible for this you need to have a revenue drop of at least 40% because of COVID-19, for a 14-day period between 12 August to 10 September 2020, compared to a similar period in 2019

You can potentially receive $585.80 per week for two weeks if you are eligible.

You can apply for this on the work and income website and applications close at 11.59pm on 3 September 2020. You’ve only got a few days if you want to apply for this so you’d better get in quick. If you’re unsure how to apply or whether you are eligible, give me a yell and I’ll be happy to help you out.

Home office claim

One of the most common questions I get asked from people starting out in business is in regard to using an area of your home for work. The most common example is if you use one of the rooms in your home as an office for all your admin work. If so, a portion of your home costs can be included in your business tax return.

To calculate this, the first thing to do is measure the dimensions of the office space you are using. This simply involves getting out a tape measure and measuring from one side of the room to the other.

You will then need to know the total floor area of your house. Normally this will be shown on your insurance invoice. If not, you will need to get out the measuring tape once again and measure your whole house.

Once you have these, you have a percentage of claimable house costs which you can then apply to your overall house costs.

There are certain costs you can claim and others you can’t (putting in a new spa won’t be included!)

If you are not already claiming this expense, or are thinking about doing more work from home, feel free to discuss with me whether you are eligible for this. I can walk you through the steps needed.

Regards –Andrew    

Lockdown Tax Changes

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Here are the latest tax updates which may affect you:

Wage Subsidy Extension

A lot of you will have been adversely affected by the lockdown. I hope you took advantage of the wage subsidy while it was available. The government has now announced an extension to the wage subsidy. The amount they will pay out will be 8 weeks at the same rate as you received the wage subsidy. To be eligible for this, you must be able to prove that your business income for 11 May 2020 – 10 June 2020 was at least 40% less than the previous year (11 May 2019 – 10 June 2019). Applications start on 10 June. If you are unsure whether you are eligible for this, flick me a message and I’ll have a look for you.

Small Business Loan

The government has also announced a small business loan available for businesses affected by the lockdown. If you were eligible for the wage subsidy then you will be eligible for this. It is a government loan up from $10,000 to a maximum of $100,000 depending on how many employees you have. It is repayable at an interest rate of 3% over 5 years. You only have until 12 June 2020 to apply for this so get in quick! Again, let me know if you want me to have a look into your eligibility for you.

New Way of Paying Tax

The IRD have announced a new way of paying tax for those who don’t use internet banking. If you are paying tax by EFTPOS or cash at Westpac then you will need to take a barcode with you. If you are planning on paying this way, please let me know and I will produce the relevant barcode for you when I complete your tax return.