Corona Business Update Sep 16, 2020
On Sunday September 13, the Israeli Cabinet imposed a general lockdown starting from Friday September 18 at 2pm, until October 11.
Most businesses can continue to operate without accepting visitors according to new rules drawn up by the Finance Minister. It seems essential businesses can continue accepting visitors. However, non-essential businesses engaged in trade, culture, leisure and tourism will be closed, including pools, gyms, and restaurants. Significantly, schools will be closed except special education.
After October 11, a “traffic light” color coded system of local restrictions may be decided upon.
Below is a summary of business grants currently available.
Claim at the relevant governmental (usually tax authority) website and give your bank account details, otherwise you may miss out. Delays are occurring. Mistakes may now be appealed.
Back-To-Work Job Grants:
Government grants of up to NIS 7,500 per qualifying employee taken on in June-September or July-October (depending on which chosen) are available to employers in most sectors other than State-funded bodies. The application must be made within 60 days after the end of the relevant month (the first being June). There is no need to prove any sales drop. These grants are subject to income tax and national insurance, but not VAT
Economic Safety Net Program 2020-2021 – Social Grants:
The Government paid an upfront grant of up to NIS 7,500 and intends paying up to NIS 15,000 every two months to freelancers, and company owners regarding the claim period May 1, 2020-June 30, 2021. This is provided there was a sales drop of at least 40% in the grant entitlement months compared with the previous year, AND taxable income in 2018 or 2019 was in the range NIS 8,568 to NIS 651,600. Applications may be filed on the 15th day following each month claimed, but within 90 days of each respective date. These grants are subject to income tax, but not national insurance or VAT.
Economic Safety Net Program 2020-2021 – Fixed Cost Participation Grants:
Safety net fixed cost participation grants are available regarding the claim period May 2020-June 2021. In each case, the deadline for claiming grants regarding May-June 2020 is November 16, 2020. Claims for July-August were accepted from September 10. These grants are subject to income tax and national insurance, but not VAT.
First, for freelancers (Osek Patur and Osek Morshe) that started up in January-February 2020, bimonthly grants of NIS 3000-4000 may be available if sales in 2020 are in the range NIS 18,000-NIS 100 million. This is provided there was a sales drop of any magnitude in the claim period compared with January-February 2020 and sales of at least NIS 1500 in January-February 2020.
Second, for freelancers, companies, charities and partnerships (not excluded bodies) with annual sales of NIS 18,000-300,000, bimonthly grants of NIS 3,000-6,000 may be available if there was a sales drop of at least 40% in the claim period compared with the previous year.
Third, for freelancers, companies, charities and partnerships (not excluded bodies) with annual sales in the range NIS 300,000 to NIS 400 million, bimonthly grants of NIS 6,000 to NIS 500,000 may be available, provided there is a sales drop compared with the previous year. The minimum sales drop for these purposes is 40% if annual sales are in the range NIS 300,000-NIS 100 million, 60% if sales are in the range NIS 100 million – 200 million, 80% if sales are in the range NIS 200 million – NIS 400 million.
“Third Wave” Fixed Cost Participation Grants:
Grants of up to NIS 400,000 may be available for freelancers, companies, charities and partnerships if they report income on a cash basis (no income until clients pay). Annual sales (revenue) limits apply: NIS 300,000-NIS 20 million in the case of freelancers, NIS 18,000-NIS 20 million for other businesses. To qualify they must experience a 25%-60% drop in sales in March-June 2020 compared with last year. The claim deadline is November 1, 2020. The grants are subject to income tax and national insurance, but not VAT
City Taxes (Arnona):
New regulations reduce Arnona by 95% until June 2021 if annual sales were up to NIS 200 million but dropped by 60%, or NIS 200-400 million and dropped by 80%.
Laid off employees should continue claiming unemployment pay via the Employment Service website. People aged 67+ may claim adaptation grants on the National Insurance website of NIS 900-4,000 provided monthly pension income is under NIS 5,000.
Check out ways of making money globally over the internet. These include e-commerce (trading) and the “gig economy” (service jobs).
- Now we know a lockdown is here, update your business plan: activities, employees, cash flow, grant and arnona claims, global e-commerce, etc.
- Please contact us if you require advice or assistance regarding any of the above.
- Keep well…and Happy New Year!