Top Five Tips for Business Owners as We Move from Level 4 to Level 3

We aim to provide you with simplified tips for several legal issues as we move from Level 4 to Level 3.
Top Five Tips for Business Owners as We Move from Level 4 to Level 3

At the moment there is a lot of information COVID 19 information to process. We get this. We aim to provide you with simplified tips for several legal issues as we move from Level 4 to Level 3.

1. Employee subsidy – have you applied and, if so, are you correctly paying it on to your staff? There will likely be more developments on the subsidy over the next few weeks. Make sure you have the Ministry of Social Development website saved to your browser (search “MSD COVID 19”) so you can regularly check to see if any updates have been announced. If you need to make changes to your staff hours or conditions of work, get advice at the outset on the process that must be followed.

2. Lease payments – have you checked whether you can reduce your rental or outgoings for a period of time – and if you are able to do this, have you had this discussion with your Landlord? It’s likely that the impacts of Level 4 will continue to be felt for the next few months – rental reductions may need to be negotiated for longer than just the Level 4 period. But remember, your Landlord may also be facing financial pressures – negotiations need to focus on outcomes that are fair and reasonable to all parties.

3. Tax – have you considered whether you are able to defer paying tax for the short term to assist with immediate cashflow? IRD has indicated that so long as businesses keep filing returns, penalties and interest for late payments will be not charged. Processes to allow some companies to off-set tax already paid against tax due have also recently been announced. Make sure you get good accounting advice and check the IRD website (search “IRD COVID 19”) when considering these options.

4. Creditors – have you talked to the creditors of your business? Like you, many creditors will also be trying to keep their business afloat. If you are likely to be late making payments, let your creditors know and try to negotiate a payment plan. The Government has recently moved to make urgent changes to the Companies Act which will impact on the ability of creditors to make claims against for unpaid debts – if you think that this may be of assistance to you, get in touch to discuss in further detail.

5. Bank – finally, have you talked to your Bank Manager? Your Bank Manager will be able to tell you about any assistance that the bank could provide, in either the short or long term. There may be options to pay interest only on loans or to defer some payments. In some cases, an overdraft may be available to assist with the immediate costs of “restarting” your business. At the very least, having a conversation with your Bank Manager may give you some other ideas of how to guide your business through Level 3 and beyond.

If you would like to discuss any of the above, get in touch with sue@gallie.co.nz.

By
Sue Garmonsway
Director

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