We are now into our second week of the Covid-19 shutdown. The adrenaline is starting to wear off and we are adjusting to the reality of our situation. Think of this time as a mental ‘fork in the road’ – how will you respond to the circumstances that face you and your business?
At the moment, most of us are still in reactive mode, so here are some things that you should be considering right now.
- Keep calm (easier to say than do, right?) When we panic, different parts of our brain become hyper-active, and we become incredibly short term in our thinking. This can result in us over-emphasising the risk, and making very poor decisions. Take some time to relax – go for a walk and clear your head.
- Are you an essential business? If you’re not sure, check out the list of essential businesses by clicking here, although the guidance is roughly “if you’re not sure whether or not you’re an essential business, you’re probably not”. If you ARE an essential business, do you know your obligations? Info is available on this website. Among other things, if you are providing essential services:
- if your staff can work from home, they must
- if they need to come to work so that you can carry out an essential service, you must ensure all appropriate measures are taken to minimise the transmission of COVID-19
- you must only operate what is essential during the Alert Level 4 period.
- The rules around wage subsidies have been shifting, although seem to have been clarified as of Friday the 27th of this month. There seems to be some confusion and fear about what obligations come with applying for the wage subsidy, but as it stands, if your business experiences a 30% drop in revenue (or you expect that it will) and you intend to retain all of your employees, it is probably worth applying. It’s still not clear how this will all play out, but on balance, we consider it is more important to be able to look after your people than mitigate potential future obligations. If you need more info about the wage subsidy, we are updating our website as info becomes available. Click here to find out more.
- IRD are *probably* going to offer some tax relief to businesses who are struggling to pay their tax. So far, they have announced some proposed changes, however the devil is in the detail of how these will work. IRD have, in our opinion, been a little slow to move on this. One of the big ones is writing off interest charged on outstanding tax that was due after the 14th of Feb. However in their technical info, they have stated that this will be at IRD’s discretion. You can read the media release here. It’s worth noting that they still want you to file your tax returns on time. Based on our knowledge of negotiating payment arrangements with IRD, we strongly suggest that this is a good idea, even when you can’t pay.
- Got team members? Talk to them. Whether they be staff, contractors, close suppliers or anyone else who is valuable to your business. The more you communicate with them the better. You don’t need to have all the answers, but particularly staff and subbies will probably be feeling uncertain at present, communicating with them can help allay their fears.
- Going to be tight for cash? Then time to start thinking about funding options. Before knocking on the door of a lender, there are some questions you need to ask yourself. How much will you need (and you will need some kind of justification for this – a budget would be good), how will you be using it, what sort of time period will you need to pay it back, and how will you pay it back? If you do need to borrow money, talk to your accountant/bookkeeper about producing some documentation to assist with your application. More on this to come.
This is an unprecedented time for society as a whole and for business. If you’ve got business related questions, Contact us and let us know what they are, and our team will do our best to answer them!