On Tuesday the Government introduced a new Bill, the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill (8-1) to Parliament and it was passed under urgency.
The Bill will set up a new Resurgence Support Payment for businesses affected by any resurgence of COVID-19. The Bill amends the Income Tax Act 2007 and the Tax Administration Act 1994. It enables Inland Revenue to administer the new COVID-19 resurgence support payments (RSP) scheme, which is a one-off support payment to businesses in the form of a grant.
The scheme may be activated in the event of an increase in alert levels from alert level 1 to alert level 2 or higher, and after remaining at an alert level higher than 1 for 7 days or more. The scheme will be available to all businesses in New Zealand each time it activates. The scheme will not be restricted to a particular region even in the event of a regional increase in alert levels, as even a regional public health restriction may impact businesses across New Zealand. Applications can be made in myIR from Tuesday 23 February 2021.
To be eligible for the RSP, a business or organisation must have experienced at least a 30% drop in revenue or capital-raising ability over a 7-day period after the increased alert level and meet other RSP eligibility criteria.
The payment will consist of a base amount of $1,500 per applicant plus $400 per full-time equivalent (FTE) up to a cap of 50 FTEs. Although the payment is capped at 50 FTEs, businesses with more than 50 FTEs may still apply.
The RSP scheme aims to limit the economic and social impacts of public health restrictions. It does so by providing financial support to businesses in the event of alert level escalations following further outbreaks of COVID-19 in the community.
If you need help to check your eligibility, or if have any questions about the RSP scheme please do not hesitate to get contact your Greenlion Advisor.