With regards to the current situation we are receiving information as and when the Government announces different measures to support individuals and businesses during this time of uncertainty.
What we know so far;
- If you are having financial difficulties paying outstanding tax bills from prior to joining Hnry, IRD suggests setting up an installment arrangement (we can assist you with this if need be)
- Under limited circumstances penalties for late payments incurred due to the effects of the COVID-19 may be remitted.
- To date, it was required that any assets purchased over $500 needed to be depreciated over the life of that asset. From 1 April 2020 - 31 March 2021, the government have increased this to ensure that only assets over $5,000 need to be depreciated. This means that if you purchase any equipment after the 1st April that is under $5,000, we will be able to pass on the full tax relief to you via a reduction in your Income Tax rate.
- The Government has also introduced a Wage Subsidy and Leave Payment that the self-employed are entitled to apply for (please see below links to a fact sheet and application for the COVID-19 Wage Subsidy and Leave Payment)
NB: The form has a field for an NZBN but this is Optional and will not affect your application so you can just leave this field blank. There does appear to be a bug on the form however so you may get an error message when you first try to submit without filling in the NZBN field but if you try resubmitting then it should go through.
Also, your Business IRD number is just your personal IRD number.
- In order to receive the full subsidy payments, we recommend providing your Personal Bank account details on the Application form as any payments coming into your Hnry account will automatically have Income Tax, ACC, Hnry fee etc deducted
- Whilst tax will be owing on this payment, we would rather you had the full payment now to help you through, and then we can look at spreading the cost of the tax over the next 12 months to help reduce any impact.
- If you choose the above approach then you MUST add the total amount of the subsidy you are set to receive as an Income Source on your Hnry Profile as per below example;
If you want to pay all tax upfront:
You can have your subsidy paid directly into your Hnry bank account (or transfer it yourself) and it will processed as a regular payment. Please note that if you choose this approach, we are unable to prevent the Hnry fee being deducted from the payment as this is an automatic deduction for any income received into your Hnry account.
- If you are GST-Registered, you MUST raise a Client on your profile prior to receiving or transferring this subsidy payment into your Hnry account and ensure you select that the Client (MSD - Covid-19) is zero-rated for GST otherwise GST will get deducted from your payment which is incorrect (as per below example).
Please be aware that any credit balances/held payments showing in IRD are NOT actual credits, these are your pre-paid taxes for this Financial Year. DO NOT ask IRD to refund you these funds as you will be required to pay them straight back to IRD once we have filed your Income Tax return.