Tax relief for businesses affected by COVID-19

Date: 9th April 2020

Tax relief and income assistance is available to people and businesses affected by the downturn in business due to COVID-19.

If your business is unable to pay its taxes on time due to the impact of COVID-19, Inland Revenue understand – you don’t need to contact them right now. Get in touch with us as soon as you can, and we’ll assist you with requesting writing-off of penalties and interest. However, it will help if you continue to file. This information is used to make correct payments to people and to help the Government respond to what is happening in the economy.

Useful information and links

Difficulty paying tax – Inland Revenue is able to help with writing-off penalties and interest, breaking down payments and setting up installment arrangements.

Writing off penalties and interest – you may be eligible if your ability to pay tax by the due date, either physically or financially, has been significantly affected by COVID-19. You’re expected to contact IRD (via your tax agent) as soon as practicable to request relief and will also be required to pay the outstanding tax as soon as practicable.

Provisional tax threshold – legislation has been passed to increase the provisional tax threshold from $2,500 to $5,000. This means that if you’re a current provisional taxpayer with a provisional tax payment of less than $5,000, you will have until 7 February following the year you file to pay your tax bill.

In addition, you may be able to make an estimate or re-estimate of provisional tax. IRD can also arrange early refunds if provisional tax has been overpaid.

Certificate of exemption for schedular payments – if you’re currently involved in contract work where schedular payments are to be deducted, such as forestry or bush work of all kinds, or fishing boat work for profit-share, you may be entitled to a certificate of exemption.

Depreciation and low-value assets – from the 2020-2021 income year onwards, IRD is changing depreciation for commercial and industrial building. Previously, tax depreciation on all buildings was at 0% because of 2011 tax changes. Now if your business is eligible you’ll be able to claim depreciation deductions in your tax return for commercial and industrial buildings.

Wage and leave subsidies – find out more about subsidies at Work and Income NZ.

Get in contact

If you would like to take any of these options, we suggest you get in contact with us as a first step.

Posted in: Covid-19, Latest News, tax