An update for our clients and community

29 March 2023

Relief from IRD penalties and interest

Inland Revenue will remit any late payment penalties and interest charged on late payment up to 30 June 2023 for taxpayers affected by the cyclone. To request a remission of interest, please contact Inland Revenue as soon as possible or, contact us and we can assist you with this.

Filing income tax returns

The due date for filing income tax returns (being 31 March 2023 for 2022 income tax returns (for taxpayers who have a tax agent and extension of time for filing) still stands. However, Inland Revenue have advised that they will not ask for outstanding income tax returns until 31 May 2023.

If you have any concerns about your upcoming tax filing or payment obligations, please contact us to discuss the situation and options available to you.

Employee benefits from North Island flooding events

The Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2) currently before Parliament (and which will be enacted on 31 March 2023) includes provisions that mean certain payments and benefits paid by employers to employees will be exempt income or not subject to FBT.

Amounts derived by an employee will be either exempt income or not a fringe benefit in the following circumstances:

• The income/benefit if provided for the purpose of relief from adverse effects of a North Island flooding event.
• The amount must be derived within 8 weeks of the first day of the flooding event and it cannot replace a PAYE income payment.

The amount is exempt income if it is accommodation (with no value limit) or if it is an income amount other than accommodation up to $5,000 in total.

If it is a benefit provided (i.e. not accommodation or cash), benefits of up to $5,000 provided to an employee will not be a taxable fringe benefit.

This legislation allows employers to help out those employees who have been impacted by the cyclone (or other flooding) without having to account for tax on such amounts. It is important to note, however, that these payments/benefits must not replace an employees income payments.

Please contact us if you have any queries in respect of relief amounts paid or benefits provided to your employees.

Government assistance

Various government packages are now available for businesses impacted by Cyclone Gabrielle:

Primary sector recovery grants

Note: Applications for the urgent clean-up grants closed at 5 pm on 20 March 2023. However, applications from farmers, growers and whenua Māori owners in hard-to-reach areas will be considered until 5 pm on 3 April 2023.

The government has announced grants to support farmers and growers impacted by the cyclone. Specific grants include:

• $2,000 per hectare up to a maximum of $40,000 to growers to remove silt from trees and vines, support the clean-up, and minimise tree and vine losses
• Up to $10,000 for pastoral and arable farmers to help with initial recovery on-farm, such as repairs to water infrastructure for stock and fencing

Applications for these grants can be made through the Ministry for Primary Industries.

Business Support Grants

There has been $50m allocated towards the seven regions impacted by the cyclone and flooding.  From this pool of funds, the government will provide grants of up to $40,000 to help businesses impacted by the weather events keep operating, position themselves for a successful recovery and maintain cashflow. 

The applications for such grants are still open, however, we are aware that the demand for this funding is greater than the pool of funds available.

Businesses must at a minimum meet the following criteria:

• You’re facing significant cashflow issues due to continued challenges with customer access, ability to source stock, supply chain issues, inability to operate as usual due to the physical damage to equipment or premises, or delays in insurance assessment and repairs.
• Your business is otherwise viable both before and after the flooding.
• You are not receiving any funding from the Ministry for Primary Industries recovery fund.
• You commit to acting in line with employment law and with due regard to your employees.

Hawke’s Bay businesses seeking Business Support Grants will also need to be primarily located in the region and have fewer than 50 fulltime-equivalent employees.

Applications for these grants can be made through the Hawke’s Bay Chamber of Commerce.

Māori communities

The Government has provided $15 million to accelerate the Māori-led response to Cyclone Gabrielle.  The details of how this amount is being distributed to communities can be found here.

Other support may also be available depending on your circumstances.

An update for our clients and community

03 March 2023

Various government packages are now available for businesses impacted by Cyclone Gabrielle:

Primary sector recovery grants

The government has announced grants to support farmers and growers impacted by the cyclone. Specific grants include:

• $2,000 per hectare up to a maximum of $40,000 to growers to remove silt from trees and vines, support the clean-up, and minimise tree and vine losses
• Up to $10,000 for pastoral and arable farmers to help with initial recovery on-farm, such as repairs to water infrastructure for stock and fencing

Applications for these grants can be made through the Ministry for Primary Industries.

Business Support Grants

The government will provide grants of up to $40,000 to help businesses impacted by the weather events keep operating, position themselves for a successful recovery and maintain cashflow.

Businesses must at a minimum meet the following criteria:

• You’re facing significant cashflow issues due to continued challenges with customer access, ability to source stock, supply chain issues, inability to operate as usual due to the physical damage to equipment or premises, or delays in insurance assessment and repairs.
• Your business is otherwise viable both before and after the flooding.
• You are not receiving any funding from the Ministry for Primary Industries recovery fund.
• You commit to acting in line with employment law and with due regard to your employees.

Hawke’s Bay businesses seeking Business Support Grants will also need to be primarily located in the region and have fewer than 50 fulltime-equivalent employees.

Applications for these grants can be made through the Hawke’s Bay Chamber of Commerce.

Other support may also be available depending on your circumstances.

A message to our clients and community

21 February 2023

It has been a very challenging week for Hawke's Bay and the pictures of devastation are hard to comprehend. One of the difficulties over this past week has been the impact on everyone of not being able to communicate with others during times of need. We know as communication methods are restored the true impact on our region will start to be felt. 

We are heartened by how our communities have worked together to support each other, and the number of people who have selflessly given up their time to help others and the community is inspiring. Thank you to all who have contributed to supporting our people and Hawke's Bay during this extremely difficult time. 

We are pleased to be able to confirm that all our team are safe. Our office is open and most of our team are now back online. When you are ready to contact us, we are here to support our clients in any way we can. If you need power, internet, a desk to work from, a hot shower or a cuppa and a chat, please come and see us at any time. 

Relief from penalties and interest

Clients have contacted us worried about Inland Revenue penalties and interest being charged on late filing or late payment of taxes. Inland Revenue has confirmed that if people get in touch as soon as they reasonably can to say they’ve been affected by the cyclone and it has stopped them from filing or paying on time, any penalties will be removed once the return is filed and tax is paid within a reasonable timeframe.

Inland Revenue will also remit any interest charged on late payment up to 30 June 2023 (at this stage). At present if you have filed a return or made a payment late as a result of the cyclone, or if you are conscious of upcoming filing and/or payment deadlines, an application will need to be made to Inland Revenue to seek relief. We can assist you with this. 

We have been in contact with Inland Revenue on behalf of our clients and the wider community to request that a general extension be provided to all taxpayers and all upcoming filing deadlines so that individual applications for relief do not need to be made.

We have been advised that this request has been escalated to National level, but at this stage there has been no extension provided. PAYE, GST and other periodic returns still need to be filed on time if possible and the 31 March 2023 filing deadline for 2022 income tax returns (for taxpayers who have a tax agent and extension of time for filing) still stands. We will continue to lobby for this to be reconsidered as we understand that many of our clients and the wider business community are focused on helping with the immediate response to the cyclone right now. If there are any further updates, we will let you know as soon as possible. 

If you have any concerns about your upcoming tax filing or payment obligations, please contact us to discuss the situation and options available to you. 

Income equalisation scheme

This is for people who farm or have an agricultural business on land in New Zealand, or who have a fishing or forestry business. You may be able to make a late deposit or an early withdrawal of funds in the scheme outside of the usual timeframes. See Inland Revenue’s Discretionary relief page for details. 

Other Inland Revenue support

Please refer to Inland Revenue’s tax relief for adverse events here https://www.ird.govt.nz/media-releases/2022/tax-relief-for-adverse-events for details of other support the Inland Revenue provides.

Other relief measures

There are various other relief measures available to individuals not in business. If you and your family have been affected by Cyclone Gabrielle, you may be eligible for a Civil Defence Payment. See Work and Income’s website for details: https://www.workandincome.govt.nz/products/a-z-benefits/civil-defence-payment.html

Insurance receipts

Please be aware that insurance receipts may have a tax impact for you oryour business. If you have any queries regarding that, or other relief measures, please contact your Baker Tilly Staples Rodway advisor.

HR support

If you need any support with taking care of your employees or how to deal with any employment scenarios, please do not hesitate to give our HR team a call. 

Wider support

It is devastating to see the damage wrought throughout our community by Cyclone Gabrielle, and to know people whose homes and livelihoods have been destroyed. 

Over the past week many of our team members have been volunteering their time to assist people we know and the wider community. However, we now believe the best thing we can do to help our region, clients and wider community is to ensure that we are in the office and available to support you all and to (as much as possible) resume business-as-usual. By doing so, we will be helping to support our local economy as part of the long recovery for the region.

Note: Read our 22 February 2023 national Tax Talk article (below) for more details on financial relief.