WAGE SUBSIDY - Employers Obligation
 
 
IRD have introduced new obligations for the employer which must be met when receiving the subsidy. These changes do not apply to employers who have applied for the Wage Subsidy prior to 5pm on Friday 27th March 2020.

Employers must now agree to:
  • Not make any changes to any obligations under an employment agreement, including to rates of pay, hours of work, and leave entitlement without the written agreement of the employee;
     
  • Retain the employees named in the application as employees for the period the employer receives the Wage Subsidy;
     
  • Not unlawfully compel or require any of the employees named in the application to use their leave entitlements for the period the employer receives the Wage Subsidy;
     
  • Use the full amount of the Wage Subsidy to pay each of the employees named in the application in fulfilment of, or towards the fulfilment of, the wages or salary obligations contained in each of their employment agreements for the period the employer receives the Wage Subsidy;
     
  • Pay employees the full amount of the Wage Subsidy (even where an employee would normally earn less than $585.80 for full time staff or $350 per week for part time staff) instead of the wages or salary that would otherwise be payable;
     
  • Not make employees redundant during the period of the Wage Subsidy.
WAGE SUBSIDY - Additional Information
 
 
In addition to elaboration on employers’ obligations, the following has also been clarified:
  • An employee may receive the Wage Subsidy from more than one source (this includes self-employment).
     
  • Employers can rehire staff that were let go because of COVID-19 and receive the Wage Subsidy granted to the employees that were employed by the employer as at 17 March 2020.
     
  • The isolation leave payment scheme has been closed with effect from 3pm on Friday 27 March due to fears of double-dipping. Claims submitted to MSD prior to this date will be processed and paid.
TAX OBLIGATIONS

 
IRD has now elaborated on its stance relating to outstanding tax liabilities as follows:
  • As part of the NZ Governments’ Business Continuity Package, IRD are looking into remitting UOMI (Use of Money Interest) for late payment on payments due on or after 14 February 2020. To be eligible for this, the entity must prove its inability to make this payment.
     
  • This has been communicated via a press release and is not currently law. We recommend making use of it if required, but not to be too aggressive in using this for now.
     
  • Regardless of your ability to pay, IRD still expects all returns to be filed. This includes GST, NRWT, PAYE, and any other returns you would normally file. Please ensure you are on top of your requirements.
INSTALLMENT ARRANGEMENTS

IRD has lowered the threshold for instalment arrangements set up in MyIR. These new repayment rates are:
  • Weekly $20 (previously $50)
  • Fortnightly $40 (previously $100)
  • Monthly $80 (previously $200)
This may provide some breathing space if you are struggling with repayments of debt incurred before the COVID-19 crisis.
OTHER INFORMATION

No Access – Clause 27
  • Many leases signed after the Canterbury Earthquakes now include a “No Access in Emergency” clause. This clause stipulates that a “fair proportion of the rent and outgoings shall cease to be payable for the period commencing on the date when the Tenant became unable to gain access to the premises to fully conduct the Tenant’s business... until the inability ceases”.
     
  • If your business is currently locked into a commercial lease and you are unable to enter the building, you may be covered under this lease. We recommend you refer to your lease to see if you fall under this regime. Any agreements or discussions had under this clause are recommended to be put in writing during these uncertain times.
     
  • Consider your relationship with your landlord or tenant before considering activating these clauses. Non-payment of rent, especially in the case where you can afford to meet your payment obligations, may cause long term issues to your relationship with your landlord.
BUSINESS INSURANCE - Infectious Disease Exclusion

Many insurance agreements will include exclusions for infectious or contagious diseases. It may be worth checking your agreement in the case that this exclusion does not apply. You may be entitled to compensation if this is the case.
Hudson Taylor Chartered Accountants