New Covid-19 relief announced for businesses

Yesterday, the Government announced a further round of financial support for businesses impacted by COVID-19. This is targeted at businesses that have been impacted in the red light setting.

Below is a summary of the new COVID-19 support payment for businesses:

  • Each payment will be $4,000 per business plus $400 per full-time employee, capped at 50 full-time staff or $24,000.
  • It will be available on a fortnightly basis for 6 weeks, so 3 payments in total.
  • Applications for the first payment will open on February 28th, with payments starting from March 1st.

To be eligible for this support, businesses must show a 40% revenue drop in 7 consecutive days within the 6 weeks prior to the shift to Phase 2 of the Government’s Omicron response on February 15th, compared with a 7 days period after that date.

Small Business Cashflow Loan Scheme Changes

Changes are being made to the Small Business Cashflow Loan Scheme to increase the amount of funding available to eligible businesses through the introduction of a top-up loan.

The top-up loan would allow businesses that have already accessed a loan to draw down an additional $10,000 with a new repayment period of 5 years with the first 2 years interest free.

The first 2 years of accrued base interest will be removed for all borrowers who have, or will, take out a loan under the scheme. This change means interest will only start accruing at the beginning of the third year.

Greater Tax Payment Flexibility

The Government is extending IR’s ability to apply flexibility for tax payment dates and terms to assist firms with cashflow pressures.

The Government have announced any businesses struggling to pay tax because of the impacts of COVID-19 should log on to myIR to see if they could delay starting payments to a later date, or if any part of the tax could be written off.

If you have any questions about accessing this relief, please speak to your trusted RSM advisor or get in touch with your local office. 

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Authors

Hensen Goh
Tax Principle