Introducing the new Resurgence Support Payments

Parliament has introduced and passed the new Covid-19 Resurgence Support Payment (RSP) scheme under urgency.

Unlike the previous Wage Subsidy scheme which was administered by Ministry of Social Development, Inland Revenue will administer the RSP scheme. This means Inland Revenue can conduct audit verification using Tax Administration Act. Therefore, it is possible for them to apply penalties and Use of Money Interest on any RSP overpayments.

What is RSP

It is a one -off support payment in the form or a grant.

You can spend the RSP on anything relating to your business. It is not restricted to only offset wages costs.

How much is the RSP?

Successful applicant will receive the lesser of:

• $1,500 per applicant + $400 per full time equivalent (FTE) employee, up to a maximum of 50 FTE

  OR

• 4 times the actual revenue drop experienced by the applicant

This means the maximum support you can receive is $21,500.   Sole trader can receive $1,900 (being $1,500+ $400 FTE)

When can I apply?

Businesses can make applications from 23 February 2021 using myIR in Inland Revenue website.

NOTE: We can also apply on your behalf provided you authorise us to do so. Please call one of our Withers Tsang advisors for assistance.

Who can apply?

Businesses need to be ongoing and viable or a “pre-revenue” business

Available to all businesses nationally even if the increase in alert level did not apply to the whole country

Businesses has experienced a drop in revenue caused by COVID alert level increase to Level 2 or higher

Eligibility

A 30% drop in revenue or capital raising ability by comparing the revenue in the seven day period after the alert level increased to Level 2 or higher against typical weekly revenue in the six weeks preceding.

Tax Treatment of the RSP

GST is payable on any RSP fund received. This is because when the funds are applied to business expenses, you would be able to claim back GST in the usual fashion.

However, for Income Tax, the RSP received is not taxable and expenses paid by RSP ware not tax deductible.

What information do I need to supply?

• NZBN number

• Employee details (or these would be extracted based on any employment information you filed in the 30 days leading up to your RSP application)

• Bank account details

• Income details during the seven day elevated alert level and the seven day comparison period

For more information about the Resurgence Support Payments click here

Please do not hesitate to call any of our Withers Tsang advisors if we can assist you with your RSP application.