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LETS GET DOWN TO BUSINESS.

Question :
I am keen to access the Wage Subsidy extension, is it only 50% reduction in revenue comparing to last year that I need to apply for? What happens if I am a startup with no revenue? 

Question submitted 29/05/20 @ 08:58am
Industry: Start-ups
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  • Morena – this is quite a complex and developing area, so keep an eye on the pages here – https://covid19.govt.nz/businesses-and-employees/businesses-and-services/financial-support-for-businesses/

    Specifically on the ‘startup’ area, the complexity is you have to be ‘signed-off’ as an R&D business – here is what I know:

    Some ventures might be R&D intensive pre-revenue businesses that may be eligible for the government COVID-19 wage subsidy scheme – not through the ‘30% revenue decline’ but via ‘revenue’ being replaced by ‘capital’. These firms have until June 9 to demonstrate a 30% projected loss of income from capital. From June 10 pre-revenue firms that meet the other eligibility criteria can still apply for the wage subsidy until September 1, but will need to demonstrate a 50% drop in projected capital income.

    More information on calculating and evidencing revenue decline can be found on Work and Income’s website. To be eligible all pre-revenue businesses must also be R&D intensive and known to Callaghan Innovation as at 17 March, 2020. Startups may still be eligible to apply even if they have not worked with Callaghan Innovation before. If founders are not sure if they qualify under these criteria have them complete this form https://docs.google.com/forms/d/1HDq8IGOTHqaqhFczy71adngDJ85Xxha6dRxj16VNy2I/viewform?ts=5eb88206&edit_requested=true and Callaghan Innovation will be in touch to help you determine your eligibility.

    Note, that Callaghan Innovation can help startups determine if they qualify as an R&D performing business. Callaghan Innovation can’t determine their eligibility on the grounds of capital loss for them. Founders will need to make their own determination on whether they believe they meet the criteria. Any questions on interpretation of this criterion should be directed to Work and Income.

    Startups can apply for the wage subsidy through Work and Income NZ who will work with IRD and Callaghan Innovation to audit and verify their eligibility. If founders previously applied for the wage subsidy and were declined, they can now re-apply if they meet the new criteria.

    It’s important to note that companies cannot receive both the Leave Support Scheme and the Wage Subsidy for the same employee at the same time.

    NOte – “Those pre-revenue businesses can treat actual or projected income from capital raises as revenue for the purposes of meeting the revenue drop requirement.”

    For information about COVID-19 support for businesses visit http://www.business.govt.nz or talk to your Callaghan Innovation relationship manager or Regional Business Partner.

    https://www.workandincome.govt.nz/map/employment-and-training/specific-employment-related-assistance/covid-19-wage-subsidy-modified/index.html
    https://www.workandincome.govt.nz/covid-19/wage-subsidy/how-to-apply.html

    Hi… Andy has said it all so well… the government really wants to help startups… they know we/you are the future so best of luck in accessing the subsidy. Suse

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