Checklist: Can your business survive the holiday period?

While the Christmas/New Year period is traditionally a slow time of year for business, you still need to meet your expenses. Ensure your bases are covered before you clock off for the year. 1. Plan ahead Do a budget to figure out how much you are going to need to cover your overheads.  This is especially important if it’s going to be several weeks before you start earning a crust…  Read more

Changes to Mileage Rates and Claims

The rules for mileage claims have changed and been applied from 1 April 2017. The new rules allow the choice between using the cost method (which is based on keeping records of actual costs incurred) or a kilometre rate method, which has replaced the mileage rate method and must be elected to be used. The Inland Revenue kilometre rate has two tiers.  The tier one rate applies for the business…  Read more

Minimum Wage Rates Increase

From 1 April 2018, the minimum wage rates increased as follows: Adult minimum wage increased from $15.75 to $16.50 per hour; Starting-out minimum wage increased from $12.60 to $13.20 per hour; and Training minimum wage increased from $12.60 to $13.20 per hour. These minimum wage rates apply to employees aged 16 years or over. If you have any questions or would like further information, please feel free to contact us.  Read more

Business health check

Things to do this month By now you should be thinking about whether you have all the information you need to give us to complete your annual accounts. If you haven’t, put getting the information together to give to us at the top of your to-do list. Run your eye over all your compliance activities – not just FBT.  Are you recording all income accurately and paying the right amount…  Read more

ACC announces changes to CoverPlus Extra

If you’re applying for an ACC CoverPlus Extra policy, it’s worth noting that the policy no longer starts on the date of the application, but when you sign the offer letter.  So if you have such a letter in your in-tray waiting to be signed, now’s the time to get onto doing that. ACC has also issued a reminder that CoverPlus Extra policies are being cancelled when invoices are not…  Read more

Changes to Families Package

If you receive the Families Package (formerly the Family Incomes Package), you may be affected by three changes coming on 1 July.  They include: a Winter Energy Payment to help older people and low income families heat their homes a Best Start tax credit for families with young children increases to Working for Families tax credits Because the changes will be made automatically, you don’t need to do anything.  Anyone…  Read more

The fringe issue

Given the importance of keeping your PAYE and GST record-keeping and payments in order, it might be tempting to think that Fringe Benefit Tax, or FBT, is a relatively minor thing. But don’t be fooled.  In 2017, Inland Revenue created a dedicated audit team to focus on this issue. One of the team’s aims is to ensure employers have the right business structures and documentation in place.  And it turns…  Read more

What shape are your end-of-year accounts in?

The end of the financial year can be either stressful or a seamless part of what you do. Ideally, your end-of-year accounts will confirm what you think your business has been doing for the past 12 months. Be a good Scout to avoid end-of-year migraine Being prepared is the key to avoiding end-of-year financial drama and stress. First make sure you have all the documents we’ll need, such as PAYE…  Read more

Income tax returns about to get easier

In April, IRD will also introduce payday reporting of PAYE information – that is, employers will need to report employee payments to Inland Revenue (IR) every pay run. To give you time to put systems in place, businesses will have a year before it becomes mandatory. Hand in hand with that, IRD will begin collecting PAYE info for the 2018/19 year to allow pre-population of income tax returns. That should…  Read more

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

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

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

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

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

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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