What are the new Government’s tax priorities?

One of the first questions business owners ask when a new government enters power is what changes, if any, are coming in the area of tax. Revenue Minister Stuart Nash provided a good steer on that when he addressed Chartered Accountants Australia and New Zealand last November. The biggest question, he said, is whether our current system is fit for purpose. A week later, the government demonstrated its commitment to…  Read more

New law will make dirty money easier to spot

Money laundering is big business in New Zealand. Every year $1.35 billion of fraud- and drug -related money is laundered through seemingly legitimate businesses. In response, the Government introduced specific Anti-Money Laundering and Countering Financing of Terrorism legislation to address this risk. Previously, only a few types of organisation had to comply with the legislation. Following amendments to this legislation passed last year, it is now confirmed that this legislation…  Read more

Succession Planning for Small Businesses: An interview with Platform 1 Partner Rob Young (February 2018)

Rob, what are the biggest mistakes people make around succession planning? Not starting early enough. Generally, an owner will wake up after New Year’s and say “I’ve had a gutsful, I’m going to sell it,” and they will ring a broker on the 3rd of January and expect to have the business sold by the middle of January! It just doesn’t happen. Planning needs to start two to four, even…  Read more

IRD into Stage Two of Business Transformation

IRD’s been working hard to be easier to do business with. As you read this, its new tax system is kicking in, giving you new and simpler ways to manage your GST obligations through myIR. Enhancements include the traceability of GST transfers, and Notifications and Alerts sent when there is something for you to do in your myIR account. From April, IRD will address more areas, including: Withholding Tax Gaming…  Read more

Slam the door on scammers

In a previous blog we looked at some of the techniques scammers use to harvest valuable information so they can hack your systems. Some of these scams use social engineering techniques to fool business owners and employees into revealing key business data. Just as people become alert to one technique, scammers develop another. They rely on people being friendly, helpful or simply naïve. Make sure your team are alert to…  Read more

The Move to Online Retail

The internet is now the number one shopping destination globally, and not surprisingly. For customers, it’s ideal. There’s no need to get in the car and visit ten shops without finding exactly what you want. This way, it’s all in one place and you needn’t battle with other shoppers for the nearest and driest car park. We have all become a bit impatient too. Purchases from your phone, tablet or…  Read more

Don’t leave it late – get tax sorted before Christmas

Provisional tax and GST are due on 15 January. The timing of these payments isn’t ideal as many of you will be indulging in the delights a summer break offers. But it’s important that you don’t neglect your tax obligations – especially as Inland Revenue will charge 8.22 percent interest and late payment penalties if you don’t pay the tax you are required to pay on time. That’s why we…  Read more

Party, party, party!

Are you planning a Christmas function for special clients and/or suppliers and business contacts? Be aware that this will come under the entertainment regime for purposes of tax deductibility. Any expenditure on food and drink that your business provides off your business premises will be 50% deductible. This extends to any incidental expenditure on things like hireage of crockery, glassware or utensils, waiting staff, and music or other entertainment provided…  Read more

‘Tis the season to be… on call

Do you have situations where some employees will be on call during a public holiday? If so, they are usually entitled to a contractual on call payment as well as at least time and a half rates if they are called out. Whether or not they are also entitled to an alternative holiday depends on whether the public holiday falls on what would normally be a working day: If you…  Read more

Business culture tied to business performance

While it’s easy to think of business culture as a bit soft compared with, say, achieving sales, in fact it’s anything but. A 2014 study reported that public companies named in a “Best Places to Work” list in 2009 outperformed the S&P 500 by 115 percent in the following five years. The Glassdoor study suggests that a culture that engages and motivates employees helps the bottom line. But the reverse…  Read more

New Zealand a digital standout, but is your business?

New Zealand is a “standout nation” according to the latest Digital Evolution Index, released by Tufts University in Boston in July. The report, by the university’s The Fletcher School, identifies New Zealand as among the digital elites, having high levels of digital development and a fast rate of digital evolution. Has your business contributed to this result? One way to be up there is to use digital technology to strengthen…  Read more

IRD has good news and bad news on FBT

You may provide company vehicles to some employees. In some cases, the vehicle is a work tool – for example, a ute for a project manager. In other cases, it is part of a salary package. Whatever the reason, Inland Revenue has good news and bad news. The good news is that IRD has consolidated all its published statements on motor vehicle FBT into one 57-page document with a logical…  Read more

New Zealand Trust law to be overhauled

Parliamentary plastic surgery is in store for the Trustee Act, to make trust law easier to access and understand. On 1 August, Justice Minister Amy Adams introduced the Trusts Bill to Parliament. This will be the first significant change since the introduction of the Trustee Act 1956. The old Act has been viewed as being narrow in scope, with trust administration being complicated and expensive. Most trusts, like family trusts,…  Read more

GST made easy

Do you hate it when GST return time rolls around? If so, you’re in good company. For many business owners, the pain isn’t so much having to hand money over to IRD, but having to prepare and file a return. But that pain is easy to avoid. Here’s how: If we complete your returns, of course everything will be done for you If you still file your returns manually –…  Read more

Tenants must be informed of insulation status

It’s been compulsory since 1 July last year for any new tenancy agreement to include an Insulation Statement. That means landlords must record if rentals have insulation, where it is, the type of insulation and its condition. That allows tenants or potential tenants to make more informed decisions about renting. Insulating rentals is now mandatory On top of that, if you have rental property without floor and/or ceiling insulation, you…  Read more

Airbnb usually a tax case on its own

If you use Airbnb to provide short-term accommodation in your house in which you also live, the IRD’s “mixed-use asset (holiday home)” rules don’t apply and guests are not classed as boarders. Except when you list a whole house which is vacant for 62 days each year, mixed-use asset rules do apply and calculations differ from those for homes where the hosts also live. Claimable expenses Anything you spend as…  Read more

Boats and aircraft may generate a tax liability

Sometimes boats and aircraft are used for private and commercial purposes. In such cases, the income from their use may be liable for tax. Boats and aircraft (valued at more than $50,000) become mixed-use assets if they are used privately sometimes, and commercially at other times – and not used at all for 62 days of the tax year. Income-earning days include time you spend either occupying or using the…  Read more

Must I pay tax on holiday home income? That depends

If you rent out your holiday home sometimes, you may have to pay tax on that income. The IRD says you have a “mixed-use” holiday home if, during the tax year, you use it for: Private use, and Income-earning use, and It’s unoccupied for 62 days or more It is still private use if you receive rent from family members, or from non-family members who pay less than 80 percent…  Read more

Tax is payable on rental income… mostly

If you receive income, you must pay tax. So if you have rental income, you have to pay tax on it, right? Maybe, maybe not – if you get rent from boarders or homestays. Boarders and homestays When you get income from boarders or homestays, your tax position depends on how many boarders you have, and how much you charge, compared with the IRD’s standard-cost method. In other words: If…  Read more

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