COVID-19

  • How do I code my new Covid 19 government loan?

    To reconcile your loan payment, you will need to set up a new “Liability” code on Xero and name it Government Covid Loan and ensure that its set to No-GST. Any repayments will also be coded to this loan.

    Click on this link https://central.xero.com/s/article/Add-or-edit-an-account-in-your-chart-of-accounts for instructions on how to do this or let us know and we can help with this.

  • Wage Subsidy Extension Information

    The Wage Subsidy Extension Information will be available from 10 June 2020 until 1 September 2020 so employers can keep paying their employees.

    You can’t apply for the Wage Subsidy Extension for an employee until their 12 week Wage Subsidy has finished.

    Applications open from 10 June 2020.

    Below are some key points. More information about this payment and how to apply will be available before 10 June.

    • You must have had, or expect to have, a revenue loss of at least 50% for the 30 days before you apply, compared to the closest period last year.
    • It will cover 8 weeks per employee from the date you submit your application.
    • It will be paid to you as a lump sum at the same weekly rate as the Wage Subsidy.

    You’ll need to agree to certain obligations, such as to:

    • pass the subsidy on to your employees
    • retain your employees for the duration of the subsidy
    • do your best to pay your employees at least 80% of their normal pay
    • take active steps to mitigate the impact of COVID-19 on your business.
  • I’ve heard that if I claim the wage subsidy after the 27th March, I have to keep all my employees on for the full 12 weeks. Is that true?
    Yes, if you claim the wage subsidy after the 27th March, you cannot make anyone redundant for the full 12 weeks.
  • What are the new Covid 19 tax relief measures and what do they mean to me?
    • Greater flexibility for taxpayers in respect of statutory tax deadlines; Inland Revenue will be given greater flexibility to modify timeframes or procedural requirements for taxpayers who are impacted by COVID-19. More information to follow on this.
    • Changes to the tax loss continuity rules; The government is announcing a new ‘same or similar business’ test that enables companies to take on new investors without losing its tax losses due to the current shareholder continuity tests. This will be allowed if the business continues to be of a “same or similar nature” as the business it was carrying on when it made the losses. This new rule will apply from the 2020-21 Financial Year.
    • A tax loss carry-back scheme; Businesses expecting to make a loss in the 2019-20 and 2020-21 Financial Year will be able to carry back this loss against profits in the previous year, and receive a refund of the tax paid in the previous profitable year. This is a temporary loss carry-back scheme with a proposal for a new permanent carry-back scheme to apply to the 2021-2022 and later years.
    • Measures to support commercial tenants and landlords; The government is extending the timeframes required before landlords can cancel leases from 10 to 30 working days and mortgagees can exercise their rights to sale or repossession from 20 to 40 working days. These changes would still allow landlords to cancel leases and mortgagees to exercise their powers during the period that an epidemic notice is in force, but would allow for more time for breaches or defaults to be remedied.
    • Further business consultancy support: Businesses will be able to access free, tailored specialist support for a range of issues they may be currently facing, including business continuity planning, finance and cash flow management, HR and staffing issues, and potentially any sector-specific issues. The Regional Business Partner Network will scale up their existing advisory services so that more businesses can receive support over the next 12 months.
  • Can I claim the wages subsidy for my au pair?
    Unfortunately not, as this is a personal expense.  However, the au pair themselves can theoretically claim as a contractor.
  • Wage subsidy and leave payment information sheet
  • What happens if I’m trading insolvently?

    The government has changed legislation to remove some of the risk of trading insolvently. Read more here on what it means for you.

  • I’ve applied to the IRD and I haven’t heard anything yet. Should I make another application?

    No, you shouldn’t make another application. It may take a few days or longer for your payment to come through due to high demand at this time.

  • How do I pay my staff?
    Take a look at this communication from HRToolkit for some good advice.
  • What are the tax changes that might help me through this period?
    The government has announced some tax relief measures. We’re sure there will be more to come, but at this stage, this is what has changed. These tax changes are to support confidence and cash flow in the economy: Reinstatement of depreciation for commercial and industrial buildings of 2% from the 2021 tax year. Increase in the provisional tax threshold from $2,500 to $5,000. Write-off of low value assets – this starts now (17th March 2020) so there is an advantage to buying low value assets – under $5,000, which can be written off this year in full.  This limit will apply from now until 16 March 2021 when it will drop down to $1,000. If you need a new computer to work from home, buy it now. The IRD can remit use of money interest Remove the hours requirement in the in work tax credit as part of the working for families tax credit. How do I claim the wages subsidy? https://www.workandincome.govt.nz/products/a-z-benefits/employer-questions-and-answers.html
  • I have contacted the IRD for a payment plan but I haven’t heard from them.
    If you contact the IRD at the moment, do not expect to hear a response from them, due to the volume of communications and also they are shutting down over Easter to make websites updates. The IRD have advised that they will be putting a hold on charging interest or penalties until 20 May 2020.  Once this deadline has passed they will then consider the payment plans put forward and will advise what, if any, interest and penalties will be charged.  So sit tight and watch this space
  • How do I deal with employees who are now on leave?

    One of our clients, HR Toolkit, has been providing some great content and material on how to look after your people so here are some links courtesy of them (thanks HR Toolkit!):

    https://www.hrtoolkit.co.nz/2020/03/covid-19-free-consultation-document/

    Beany is not an expert in HR matters so we defer to the experts on this.

  • I have heard of people getting tax written-off with one phone call.
    There is no substance to these claims, currently the IRD will only write off debt if it is applied for under financial hardship and many of those applications fail, tax is only ever written off in a small number of cases.
  • How do I get an NZBN number for the wage subsidy application?
    If you need to locate an NZBN number for your application or apply for a new one use this link. https://www.nzbn.govt.nz/get-an-nzbn/get-your-nzbn/
  • I heard that ACC has delayed CoverExtra invoicing for 3 months?

    This is correct a statement from ACC was released on the 9th of April dealing with this. During this time CoverPlus Extra payment plans will be paused and ACC will not seek payment for outstanding balances. Rest assured all customers will remain covered at their agreed amount.

    You can read the full ACC communication here

  • If I delay making my claim, does that mean I will get less than the full 12 weeks?
    As far as we can tell, it doesn’t matter when you make your claim.  You can claim now for the full 12 weeks or in the middle of April, you can still claim the 12 weeks.  Just be aware that you cannot make two claims for the same business.
  • How can I find out of my employer has claimed the wage subsidy?

    You can use this search engine by Work and Income to locate your employer.

    https://services.workandincome.govt.nz/eps

  • Can I claim more than once, if I work in two businesses as a contractor?
    This is not covered in the documentation so we are taking a common sense approach.  You cannot make two full time claims, but you could potentially make two part time claims.
  • Do I pay tax on the wage subsidy?
    There is no GST or tax on the wage subsidy as it is a non-taxable item for employers claiming for employees – however, when you pay this subsidy out to your employees via wages then this is also not tax-deductible and needs to be offset against the wage subsidy. If you are a sole trader/contractor receiving the subsidy then it is treated as taxable income.
  • Can I claim for a new staff member who hasn’t started yet?
    Theoretically, you can include them in a claim if you are still going to start them and pay them 80% of the agreed wage.  This is a grey area and we suggest that you don’t make your claim until they ‘start’.
  • Is the government still going to increase minimum wages on April 1st?
    This may be the subject of announcement coming soon, but at the moment, they are still going ahead with the increase.
  • I can’t get through to the IRD. What do I do?
    Don’t panic.  No one can get through at the moment (including us).  However, we can communicate through secure mail and we are doing that on your behalf. We are watching where you are at and making sure that you are as safe as possible from a tax perspective.
  • Is Beany operating during the lockdowns?
    Yes Beany is Open; The entire Beany team has been remote since the launch of our company.  Our staff remain working as usual and more than happy to assist with any queries or services you might need.  support@beany.com
  • How do I treat the wage subsidy in my Xero (or other) file?

    Set up a new “other income” code on Xero and name it Wage Subsidy – Non Taxable and ensure that its set to no GST.  We can help you set up the code, or show you how. 

    If you are the employer, set up a new “current liability” code on Xero and name it Wage Subsidy.  Click on this link https://central.xero.com/s/article/Add-or-edit-an-account-in-your-chart-of-accounts for instructions on how to do this or contact our Support Team and we can do it for you.

    We are recommending that the subsidy is coded to a Balance sheet code so that when it is used to pay wages it is then transferred against the wages account in the P&L.

    The employer will not be liable for income tax or GST on the subsidy received from MSD and will not be entitled to an income tax deduction for wages paid out of the wage subsidy.  

    If you are self employed or a contractor, set up a new “other income” code on Xero and name it Wage Subsidy, this is a taxable income.  Click on this link https://central.xero.com/s/article/Add-or-edit-an-account-in-your-chart-of-accounts for instructions on how to do this or contact our Support Team and we can do it for you.

    NB If you are in partnership: Each individual partner will need to apply for the sub as a self employed individual making the claim then the subsidy is taxable income to them. If you have employees under your partnership, claim as a ‘normal’ wage subsidy.

    Please contact support@beany.com with any questions.

  • How do I claim the wages subsidy?

    The best resource for this question can be found at this link. Essentially all businesses including the self employed and contractors can claim the following wage subsidy if their actual, or projected revenue, falls by 30%.

    • Working over 20 hours per week = $585.80
    • Working under 20 hours per week =  $350.00

    You can claim yourself here and our clients are getting paid in approximately 24 hours.

    The government has removed the $150,000 cap on the wages subsidy claim.

    New businesses or high growth businesses can now compare their revenue to a previous month (as opposed to a previous year).

    There is a requirement on employers to use your best endeavours to pay 80% of normal wages – or you must pass on the entire wage subsidy to the employee.

    Charities and not for profit are now included.

    You are now required to keep employees in employment for the period of the wage subsidy.

    Nothing in the scheme changes the normal legal obligations to your employees.

  • Invoicing per school term and showing business drop
    “I invoice per school term. How can I show a drop in business month to month comparatively when this term has been paid for?” If you don’t think you will get paid for the next term, then you are projecting a drop in revenue – you can claim for this.
  • Are the banks helping?
    We still do not have detail on this but Grant Robertson announced that commercial bank loans up to $500,000 would be available to businesses that turn over between $250,000 and $80 million.  If you are in that range and need money to get through Covid 19, the government will under-write the loan which will be repayable over 3 years on normal commercial terms. Additionally, a mortgage holiday of up to six months may be available to individuals so they can have security around their home. The mortgage deferral scheme is now open.  If you wish to defer your mortgage, contact your bank now.
  • How do I work from home?
    We will be posting a blog shortly on a whole range of tips and tricks on this so will update shortly.  But some general points: Work in the cloud – Google Drive means that all your communications, file storage, contacts and tasks can be saved on the cloud in one secure location. Keep a good routine going at home. Start and stop at set times and take breaks. Go for a walk in the garden, around the block, or hop on your bike for a quick daytime power exercise. Manage your children – take some time to explain how things are different and how you need to work from home – this is a great opportunity to show them good work habits and explain what you do and how it contributes to the family. Learn how to run virtual meetings and use video conferencing – business life will never be the same again so why not use this as an opportunity to learn some new skills. Stay connected – working from home does not mean social isolation – the Beany team work in a very connected collaborative way from our homes. Practice different ways of socialising from google hangouts to hanging over the fence talking to your neighbours (from a safe distance).
  • Can I claim for Casual Employees?
    If you intend to keep employing your casual employees then yes you can claim for them.
  • Can I use the wage subsidy money for anything else?
    No, the money you receive should be used for paying your people.  However, we are hopeful that the government will be announcing more funding for other key expenses items, such as rent, shortly – we’ll keep you posted.
  • I need to make a tax payment plan with the IRD. How do I do that?
    We are encouraging all our clients to think about this ahead of time.  You can organise your own payment plan in your My IR portal – but please feel free to contact support@beany.com and we can help you.
  • Some of my workers are contractors AND employees – do I apply for the subsidy or do they?
    You apply for your employees and advise your contractors that they need to apply for themselves.
  • Can I claim if I’m a shareholder/employee?
    “I take drawings as a business owner and have employees – does the subsidy also cover me?” Yes, is the quick answer. Many of our clients work for their companies and get paid an annual shareholder salary (as opposed to being paid via PAYE income).  We have consulted with tax experts and there is no definitive answer yet – but we are advising a common sense approach. If you work in your business for more than 20 hours a week and get paid as a shareholder/employee, it seems likely you will be eligible for the subsidy of $585.80 per week.

TAX and GST Related

  • This is kind of a “pay as you go” tax for business people. It’s paid in 3 equal installments (May, August and Jan) based on your income during the current year, or what it was last year.

  • This is the difference between what tax has been paid during the year (as provisional tax, PAYE or withholding tax) and what is actually owed. If too much has been paid a refund is due, but if too little was paid then this is the terminal tax amount.  It’s a wash-up of total tax due for a year less what you’ve already paid.
  • Standard: based on your previous years results plus a small uplift Estimated: you estimate what your tax will be for the year and make payments based on this estimate Accounting Income Method (AIM): You pay your provisional tax during the year as you earn the income.
  • This does depend on what method you use to calculate (see above), your balance date and also whether you are GST registered.

    Normally if you use the Standard and estimate basis with a standard balance date of the 31st March you have to make three payments due on the 28th August, 15th Jan and 7th May.

    If however you are on six monthly GST basis these dates will coincide with your GST returns and you will be required to make two payments on the 28th October and 7th May.

    If you use AIM then these payments will also be due with each GST return, usually six payments a year.

  • It depends.

    If you use the standard method and your total tax for the year is below $60,000 and you have made all of your Provisional tax payments in full and on time then you will not be charged interest or penalties. If however you are late or underpay your tax then you lose your “safe harbour” which means any late payments or outstanding tax including your final terminal tax payment will be subject to interest.

    If you use the standard method but your total tax for the year exceeds $60,000 then you could be subject to interest.

    If you use the Estimate basis and you have calculated this incorrectly then yes you could be subject to interest.

    If you use the AIM basis and you have taken reasonable care that the figures on your AIM return are accurate you will not be subject to interest.

    • Greater flexibility for taxpayers in respect of statutory tax deadlines; Inland Revenue will be given greater flexibility to modify timeframes or procedural requirements for taxpayers who are impacted by COVID-19. More information to follow on this.
    • Changes to the tax loss continuity rules; The government is announcing a new ‘same or similar business’ test that enables companies to take on new investors without losing its tax losses due to the current shareholder continuity tests. This will be allowed if the business continues to be of a “same or similar nature” as the business it was carrying on when it made the losses. This new rule will apply from the 2020-21 Financial Year.
    • A tax loss carry-back scheme; Businesses expecting to make a loss in the 2019-20 and 2020-21 Financial Year will be able to carry back this loss against profits in the previous year, and receive a refund of the tax paid in the previous profitable year. This is a temporary loss carry-back scheme with a proposal for a new permanent carry-back scheme to apply to the 2021-2022 and later years.
    • Measures to support commercial tenants and landlords; The government is extending the timeframes required before landlords can cancel leases from 10 to 30 working days and mortgagees can exercise their rights to sale or repossession from 20 to 40 working days. These changes would still allow landlords to cancel leases and mortgagees to exercise their powers during the period that an epidemic notice is in force, but would allow for more time for breaches or defaults to be remedied.
    • Further business consultancy support: Businesses will be able to access free, tailored specialist support for a range of issues they may be currently facing, including business continuity planning, finance and cash flow management, HR and staffing issues, and potentially any sector-specific issues. The Regional Business Partner Network will scale up their existing advisory services so that more businesses can receive support over the next 12 months.
  • If you have an extension of time then this is payable by the 7th April following the end of tax year. For example, terminal tax on the year ended 31 March 2020 is payable on 7th April 2021. If you don’t have an extension of time then this payment will be due by 7th February following the end of the tax year.
  • The IRD grants this to tax payers who are linked to a tax agent (like Beany). This extends the filing date of income tax returns to the 31 March following the tax year end, giving you an extra nine months to file your returns. EOT can be removed if you do not file on time or you do not have a tax agent.  This means that you must file your income tax returns by 7th July following the tax year end.
  • If you are late paying, underpay or do not have ‘safe harbour’ then this is charged at 8.35%

    If you have overpaid your tax the IRD will credit you interest at a rate of 0.81%.

  • Your tax summary in Beany takes figures from a specific date and, if payments have been made after the summary was prepared, it may not be updated to show these. This is particularly true if you’ve made payments (or not made them) outside of the normal payment dates. We are working on a direct link to the IRD so it will always be up to date, but right now they have other priorities! So there may be circumstances where due to timing issues we have not updated Beany. If you notice this, please contact us and we will confirm exactly what is due.

Beany FAQ

  • Where is Beany based?
    Beany is a New Zealand company with the large majority of our team based right here in New Zealand spread across many cities.
  • What does Unlimited Advice and Support mean?

    Beany will give you advice and support on any matter relating to tax, accounting or your Xero file as part of your package. We are here to help!

    If you do need any help that is outside our scope of services, we will advise and quote for it first.

    So how does it work?

    You can call and email us as often as you like. The type of questions we get range from help with your Xero file, asking when your tax is due and what to do with your payroll!

    We always aim to respond within 24 hours with answers to your questions, although at peak accounting times it may take a little longer.

    Our support desk is staffed by qualified and experienced accountants who can respond quickly and accurately. If needed, they will also liaise with your personal Beany accountant.

    And should you require some out-of-scope work, such as preparing a cash flow summary for the bank, or working out a fresh tax structure, we will let you know any extra cost before we start.

    We can also offer you some training to help you manage some of these tasks yourself. It’s all part of the service!

  • Wage Subsidy Extension Information

    The Wage Subsidy Extension will be available from 10 June 2020 until 1 September 2020 so employers can keep paying their employees.

    You can’t apply for the Wage Subsidy Extension for an employee until their 12 week Wage Subsidy has finished.

    Applications open from 10 June 2020.

    Below are some key points. More information about this payment and how to apply will be available before 10 June.

    • You must have had, or expect to have, a revenue loss of at least 50% for the 30 days before you apply, compared to the closest period last year.
    • It will cover 8 weeks per employee from the date you submit your application.
    • It will be paid to you as a lump sum at the same weekly rate as the Wage Subsidy.

    You’ll need to agree to certain obligations, such as to:

    • pass the subsidy on to your employees
    • retain your employees for the duration of the subsidy
    • do your best to pay your employees at least 80% of their normal pay
    • take active steps to mitigate the impact of COVID-19 on your business.
  • Do you really provide me with all those services and unlimited advice for $175 per month?

    Yes! By using technology and all the efficiencies it provides, we have removed all unnecessary overhead costs and passed these savings directly on to you. Check out our pricing.

    At Beany we’re all about the customer, and have structured our business to ensure everything is done on your terms, when it suits you. Beany interfaces with a number of accounting solutions (like Xero or MYOB) or you can use our simple manual entry system, which is built-in.

    We provide and file the paperwork for all Company Law and IRD requirements – from Working for Families to Fringe Benefit Tax, to name but a few. A Chartered Accountant oversees everything, helping to minimize the amount owed on your tax bill.

    Also, not only can you contact us whenever you like, you can ask your accountant anything you like, as often as you like without being charged anything extra!

    As long we can answer your question then and there, there’s no extra charge, which means no more scary accounting bills at the end of the year. We give you peace of mind that you’re making the right decisions for your business.

    If we need to go away and do detailed analysis to provide you with the best tailored advice, we will provide you with a quote upfront, so you know exactly what it will cost you.

  • Why should I make the change to an online accountant service?

    Being online makes it simple, cost effective, convenient and efficient, and you have the freedom to update information whenever you like – you’re not restricted by the office hours of your typical accountant.

    Beany allows you to store all your financial documents in one place, roll over common information from year-to-year, and stops you having to chase bits of paper around. We offer a service based on lower overhead costs – with these savings passed on to you!

    We prepare high quality financial statements and tax returns as part of our pricing, and we provide this information direct to your personal Beany page. No more inefficient use of your time and money making unnecessary trips to see your accountant at their office!

  • Legal? Absolutely! New Zealand registered Chartered Accountants work for Beany and ensure all tax and legislative requirements are met.

    Beany is a member of the Chartered Accountants of Australia and New Zealand and is reviewed by them periodically to ensure we meet best practice standards. We also make sure we meet their code of ethics ensuring:

    • Integrity
    • Objectivity
    • Professional Competence and Care
    • Confidentiality
    • Professional Behaviour

    We take data security extremely seriously and use SSL encryption between your web browser and our servers, just like your online banking system does.

    You will notice the “https” and padlock in your browser’s address bar. This tells you a secure connection is being used. Our data centre is right here in New Zealand and we take hourly backups of your data.

  • Will all my accounts be prepared by a trained accountant?

    Yes, our Beany team of fully trained accountants work away in the background and their work is in turn fully reviewed and monitored by qualified Chartered Accountants, ensuring you are always getting the best possible level of advice. At Beany we take our professional accountancy responsibilities very seriously.

  • What if I need to talk to you? Can I come and visit Beany?

    In order to provide you with the best possible price, we have removed all unnecessary overheads, including an office! You can however contact us at any time and we’ll arrange a call back at a time that suits you. This means you only deal with your online accountant when it works best for you, on 0800 755 300!

    Once you’ve signed up as a Beany customer you will interact with our friendly and helpful team to make sure everything is covered and all your questions are answered. You can talk to us just as you would a traditional accountant. The only difference is all communication will be done online, or on the telephone, where necessary. Check out our contact page.

  • Do you also provide business advice?

    Yes, we certainly do, we can provide advice on anything you would expect from a traditional accountant. Take a look at customer testimonials to get an idea of some of the advice we have provided.

    Please send us an email or give us a call 0n 0800 755 300. Once we understand what you need to know, we will provide an email detailing the cost of the advice and what you are going to receive from Beany. This way there are no surprises!

  • Xero; Do I have to use it, and how can I use it?

    Using Xero – an accounting system in the cloud – makes life simpler and easier for you and for us. It enables you to have most of your accounting tasks automated and our system will seamlessly be able to use the data from there, reducing our processing time. As a bonus, all your data will be held in the cloud so you can access it from anywhere.

    You don’t have to be using Xero to use our online accounting services. If you are using a spreadsheet, piece of paper, or home-based accounting system (or keep your receipts in a shoe box) you will still be able to use our Beany solution. It is so easy.

    If you are not currently using a cloud-based accounting system like Xero but would like to, just contact us and we will assist you with making the move. It is really that easy!

  • How long does it take to process my accounts?
    We aim to have your accounts done within 28 days of receiving all the information we require from you. Its so easy!