Additional Government support for SME’s
The Government has announced a string of new measures to provide relief for small and medium-sized businesses, which includes:
Introduction of Loss Carry Back Scheme
This is possibly the most interesting tax measure. Businesses will be able to offset a loss in a particular tax year against a profit in previous year and receive a refund of tax paid in previous profitable year. The proposed mechanism will provide cash flow assistance to businesses that are or anticipate being in a loss situation.
A temporary rule will be introduced for 2020/2021 tax year whereby the loss will be able to be carried back to the 2019 or 2020 tax year to allow for a refund being paid. The temporary rule will allow a loss to be estimated. However as with any estimation, if an estimation is made and a refund is made incorrectly the UOMI will apply.
A temporary legislation will be introduced in the week of 27th April. For later years the loss will need to be confirmed in a tax return before it can be carried back to a prior year. The permanent rule will be legislated later in the year.
Details and legislation will be introduced on April 27 and will effectively apply retrospectively once the bill is passed.
Below are the links to the relevant press releases issued by the Government:
Government backs business through COVID-19
Supporting small and medium sized enterprises during the COVID-19 crisis
Whilst the proposal is light on details, we will begin applying for the benefit accruing from this initiative on a case by case basis once further clarifications are available.
Biz Solutions has registered with the Regional Business Partner Network so that you are able to access grants for business consultancy assistance where applicable. We will update you with further information on this initiative in due course.
https://www.regionalbusinesspartners.co.nz/
If you have any questions at all, please do contact us, our staff details are on our website.
The Biz Solutions team
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