Govt must extend loss carry-back scheme to save businesses
National is calling on the Government to extend the Covid-19 temporary loss carry-back scheme to support businesses who are continuing to struggle under lockdown, National’s Shadow Treasurer Andrew Bayly and Associate Revenue spokesperson Simon Watts say.
“The loss carry-back scheme allowed businesses that anticipated to run losses for the 2020 or 2021 tax years to carry some or all the loss back to the previous year to enable an immediate cash refund of tax previously paid,” Mr Bayly says.
“This important scheme was a critical lifeline for many businesses who faced large drops in revenue last year due to Covid-19 and the subsequent lockdown. Despite Auckland’s current lockdown being the longest one yet, the scheme no longer applies.
“It’s clear the national lockdown and Auckland’s extended one is impacting businesses, not only in Auckland but around the country. It doesn’t make sense that the carry-back rules no longer apply this year.
“National is calling on the Government to continue the loss carry-back scheme, extending it to the 2022 financial year, so that businesses who record losses due to the ongoing impacts of Covid-19 can continue to offset their loses,” Mr Bayly says.
“A National Government would allow these losses to carry back up to four years,” Mr Watts says.
“Last time round State-Owned Enterprises took up a large slice of the scheme. A National Government would exclude State-Owned Enterprises from the scheme so that support could be focused to where it’s needed most.
“Money in the pockets of these businesses is the best way to make sure they can continue to trade, support their employees and pay fixed costs such as rent. Right now they’re struggling to do this.
“Small businesses are particularly bearing the brunt of this most recent lockdown and many face closure if the Government doesn’t come to the table with extra support.
“If the Government had ramped up our vaccine rollout months ago then we may not have needed such a long and hard lockdown. Because it didn’t, businesses should continue to receive the support they’ve previously had.
“One way to start would be to extend the carry-back scheme so businesses struggling now can keep their doors open,” Mr Watts says.