Monday, March 1, 2021
No Result
View All Result
FMLaw
  • Building and Construction
  • Charitable
  • Commercial
  • Dispute Resolution
  • Employment Law
  • Franchising
    • Franchisee
    • Franchisor
  • Property
  • Relationship Property
  • Retirement
  • Transport
  • Trust, Wills, Estates and Enduring Powers of Attorney
FMLaw
  • Building and Construction
  • Charitable
  • Commercial
  • Dispute Resolution
  • Employment Law
  • Franchising
    • Franchisee
    • Franchisor
  • Property
  • Relationship Property
  • Retirement
  • Transport
  • Trust, Wills, Estates and Enduring Powers of Attorney
No Result
View All Result
FMLaw
No Result
View All Result
Home Commercial

Wage Subsidy Scheme For High Growth Businesses Under COVID-19

by fmlaw news
December 18, 2020
in Commercial
0
Rent Abatement Under NZ Leases and COVID-19
0
SHARES
7
VIEWS
Share on FacebookShare on Twitter

The updated declaration states a ‘high growth business’ is a business that has experienced a significant increase in revenue prior to Covid-19. There is no further guidance on how significant “significant” needs to be. It seems clear that the intent is to capture businesses that had experienced month-on-month growth in a pre-Covid-19 world of a magnitude that means, even though they have suffered 30% revenue declines in revenue in recent months, they haven’t been eligible for the Wage Subsidy Scheme when looking back at the same month last year. Best practice will be to carefully document your company’s prior ‘significant revenue growth’ in case of a subsequent audit.

Wage subsidy scheme expansion

The Wage Subsidy Scheme has been expanded for pre-revenue R&D businesses too; although how to qualify under the relevant expanded criteria is less clear. Wage Subsidy Scheme declaration is the possibility to include a fall in projected ‘capital income’ for the purpose of calculating a 30% revenue decline.It is understood that a fall in projected ‘capital income’ is intended to mean a fall in projected capital funding e.g., third party investment (rather than “income”).

Businesses who can use a 30% decline in projected capital funding, as opposed to a 30% decline in revenue, are limited to businesses that:

  • have had no revenue (which excludes seed or venture capital, or Government funding); and
  • are recognised by Callaghan Innovation as a legitimate research and development start up business.

This limits the applicability of this expansion to truly zero revenue organisations. This may exclude many R&D businesses that have had minimal income, e.g., from pilot schemes. The Government’s assumption seems to be that if a business has had some revenue, then the usual ‘30% decline in revenue’ eligibility criteria apply.

It also limits the applicability of this expansion to R&D start-ups recognised by Callaghan Innovation. It is understood that this is intended to cover businesses:

  • Startups who have joined one of Callaghan Innovation’s international missions;
  • that are Callaghan Innovation “customers” (e.g., R&D grant and R&D Tax Incentive recipients);
  • Tech incubator startups;
  • Startups that have engaged Callaghan Innovation research and technical services;
  • Startups that have done, or were signed up for, one of Callaghan Innovation’s innovation programmes.

Small business cashflow scheme

These expansions are doubly important because eligibility for the Wage Subsidy Scheme is a pre-requisite for accessing Inland Revenue’s recently announced Small Business Cashflow Scheme (SBCS) Loan regardless of whether you’ve taking the Wage Subsidy or not.

The other main eligibility criteria:

  • having 50 or fewer full-time-equivalent employees; and
  • a declaration that the business is viable, and that you have a plan to remain viable.

If eligible, the maximum loan amount is $10,000 plus $1,800 per full-time-equivalent employee. The annual interest rate is 3% over a 5-year term, and interest will not be charged if the loan is fully paid back within one year.

fmlaw news

fmlaw news

Related Posts

Resilience: Tips for small business owners

Resilience: Tips for small business owners

by fmlaw news
February 22, 2021
0

2020 might be in the rear-vision mirror, but COVID-19 is not yet behind us. We asked an expert for mental...

GC pressure expected to triple in-house legaltech spend by 2025

GC pressure expected to triple in-house legaltech spend by 2025

by fmlaw news
February 18, 2021
0

Budgets will be boosted to facilitate digitalisation and minimise the need for outside counsel. Heightened pressure on GCs driven by...

Rent Abatement Under NZ Leases and COVID-19

Business Finance Guarantee Scheme in Covid-19

by fmlaw news
December 18, 2020
0

The Business Finance Guarantee scheme is announced for small and medium-sized businesses, and its stated aim is to protect jobs...

Rent Abatement Under NZ Leases and COVID-19

Key Changes in the New Privacy Act 2020

by fmlaw news
December 18, 2020
0

Since the Privacy Act became law in 1993, New Zealand’s privacy laws are about to undergo their biggest transformation. The...

Next Post
Rent Abatement Under NZ Leases and COVID-19

Covid-19 and your commercial contract

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

Coronavirus: Government reveals action plan for business

Coronavirus: Government reveals action plan for business

12 months ago
How To Deal With Guardianship Disputes?

How To Deal With Guardianship Disputes?

10 months ago
FMLaw

© 2020 FMLaws News keeps you fully updated of the latest law in New Zealand.

Navigate Site

  • Building and Construction
  • Charitable
  • Commercial
  • Dispute Resolution
  • Employment Law
  • Franchising
  • Property
  • Relationship Property
  • Retirement
  • Transport
  • Trust, Wills, Estates and Enduring Powers of Attorney

Follow Us

No Result
View All Result
  • Building and Construction
  • Charitable
  • Commercial
  • Dispute Resolution
  • Employment Law
  • Franchising
    • Franchisee
    • Franchisor
  • Property
  • Relationship Property
  • Retirement
  • Transport
  • Trust, Wills, Estates and Enduring Powers of Attorney

© 2020 FMLaws News keeps you fully updated of the latest law in New Zealand.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In