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If you have a company, we’ll let you into a secret. We know, each year when we speak with you about what you want to do about dividends, that the minute we start to talk about imputation credits and the imputation credit account, we watch your eyes glaze over and we know the ‘la la la la la la’ soundtrack is playing in your head. It’s okay. Almost everyone finds…  Read more

Ho, Ho, Ho! Knowing What’s Deductible – Entertainment (Summer 2016)

Do your plans for the festive season include functions to celebrate with clients and the team? If they do, here are some tips on the tax implications When you’re entertaining clients or colleagues, some entertainment expenses are tax deductible while others aren’t. It can be tricky working out what’s deductible as a business expense and what isn’t. The basic idea is that an expense is business-related if you spend the…  Read more

Ho, Ho, Ho! Knowing What’s Deductible – Gifts (Summer 2016)

The rule of thumb with gifts is that if they consist of food or drink, you can only claim 50% of the expense as a tax deduction. If you are giving out gift baskets or hampers and some of the contents are food or drink, but not all, the food or drink items are 50% deductible but the other gift items are 100% deductible. When you come to claim the…  Read more

Buying off the plan? The bright-line test and you (Summer 2016)

We’ve talked before about how changes to tax law around buying and selling property might affect you. Now that the changes are in operation and the bright line test is being applied to determine tax liability, an issue highlighted only recently might leave you exposed. As we’ve discussed before, people who buy or sell a property within two years of acquiring it must pay tax on the gain. The main…  Read more

Filling Employment Gaps Over Summer (Summer 2016)

With the holidays coming up, you may have started to think about whether to employ some extra people over the holidays. If you do, think carefully about the kind of help you need and broadly what kind of employment contract is best suited to the situation. It’s important to make sure you comply with current employment law and have it right from the start. Casuals Casual employees might be right…  Read more

Do You Own Rental Properties? (Spring 2016)

If you gain income from rentals, be aware you need to comply with new rules. On 1 October 2016 changes to the Residential Tenancies Regulations came into force to reflect new standards on insulation. Standards New Zealand’s ‘Energy efficiency – Installing bulk thermal insulation in residential buildings’ provide extended guidelines for insulation installers and building owners. This follows up on changes which took effect on 1 July 2016 requiring all…  Read more

GST Adjustments On Private Use (Spring 2016)

Another area that we notice often confounds clients is how to calculate GST deductions on assets that are partly for business use and partly for private use. You can claim GST but only in proportion to the extent the asset is available for producing income. This is called GST apportionment. Most commonly, this involves a vehicle used for work but also used privately. Lifestyle blocks where there is some commercial…  Read more

Have Your Say On Tax Changes (Spring 2016)

You will have heard ads on the radio from Inland Revenue raising awareness on their initiatives to change the administration of the tax system. Inland Revenue have been working on this for a while, taking into consideration many submissions from different sources. Their website Changing for You provides an overview of some of the things Inland Revenue are proposing to change, mainly focused on automating the gathering and filing of…  Read more

Tax Changes for LTCs: Watch This Space (Spring 2016)

Proposals to change the rules governing look-through companies (LTCs) and closely held companies are currently going through parliamentary hearings and consultations. If passed, the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill is expected to take start taking effect from the 2017 tax year. The proposed changes are part of the moves to simplify tax, however there are some proposals which have a significant favourable effect.…  Read more

Further Moves To Tackle Anti-Money Laundering (Spring 2016)

The Ministry of Justice is looking to extend the application of anti-money laundering compliance obligations to more businesses and professions. In a nutshell, since 2013 only financial institutions and casinos as well as the government agencies tasked with overseeing and enforcing the rules had to comply with the anti-money laundering legislation. The Government is now proposing to extend these rules to lawyers, accountants, real estate agents, conveyancers, some additional gambling…  Read more

Do You Pay Yourself From Your Business? (Spring 2016)

Do you take regular cash drawings from your business profits to meet personal living costs? You need to be aware of how your personal drawings sit with your tax position. Sole traders Sole traders complete an IR3 tax return at the end of the year. Include all business income and expenses in your tax return. This includes drawings. They are not a deductible business expense. It’s much easier to track…  Read more

Provide GST Registration Details to Remote Vendors (Spring 2016)

From 1 October 2016 non-resident businesses must charge and return GST where they meet the criteria to register for GST and they supply remote services (including online services) to New Zealand residents. As a New Zealand resident business, you won’t be charged GST on these supplies, if: you are GST-registered the supplies are part of your taxable activity, and you let the non-resident supplier know you’re GST registered and provide…  Read more

Enforcing Employment Standards (Spring 2016)

It is taking time for the impact of this year’s employment law changes to sink in. Parental leave and the demise of zero hours contracts received a lot of press. Enforcing employment standards has had some coverage but always sounds a bit abstract in comparison. Yet this is an area that seems to bite employers. The basic idea is to make sure employers pay at least minimum wage and give…  Read more

Budget Perspective (Winter 2016)

No drama The 2016 budget has come and gone and the only people really shouting about it are the Opposition and the tobacco companies. Perhaps the Government felt they have already given businesses enough to be excited about with their pre-Budget announcements of the proposed tax simplification and business transformation. Beyond the reform of the provisional tax system and other changes announced to be staged over 2017 and 2018, there…  Read more

Changes to Land Sales Could Affect You (Winter 2016)

Are you selling residential land? From 1 July 2016, a new withholding tax – residential land withholding tax (RLWT) – may need to be deducted from a property sale/disposal. This will occur where the property being sold/disposed of is in New Zealand and meets the definition of ‘residential land’, and the vendor: acquired the property on or after 1 October 2015, and has owned it for less than two years…  Read more

Tax Pooling (Winter 2016)

Underpaid income tax? Underpaid provisional tax can cause a few headaches. Maybe you did not keep up with your provisional tax payments throughout the year? (oops) Perhaps you did not end up paying enough because you had a better-than expected financial year (yay! but damn, an increased tax liability). It could be that seasonality or volatility make it difficult to forecast your provisional tax payments. Whatever the case, owing the…  Read more

Don’t be caught out on Holiday Pay! (Autumn 2016)

Holiday pay has been in the news recently and we know the Labour Inspectors from the Ministry of Business, Innovation and Employment will be checking that other employers have been recording and paying entitlements correctly. There are two ways of calculating holiday pay: it can be based on ordinary weekly pay at the beginning of the holiday; or average weekly earnings over the previous 12 months The correct amount of…  Read more

Employment (Autumn 2016)

The Employment Standards Legislation Bill has been passed, bringing into effect from 1 April 2016 some important changes to the employment statutes. These include extending parental leave, spearing zero hour contracts and strengthening compliance with minimum employment standards. Parental leave A greater range of people – for example, certain casual workers and seasonal workers, employees with more than one employer and those that have recently changed jobs – will have…  Read more

Requesting ACC Adjustments (Autumn 2016)

Do you receive PAYE or Shareholder Remuneration that exceeds the maximum earnings liable for ACC?; or Are your earnings sourced from one or more companies? If so, we can request that ACC reassess your liability and make a Multiple Employer Adjustment. This may affect how much you pay in ACC levies. ACC cannot identify eligible customers from the information Inland Revenue provides, so levies are charged on all income. ACC…  Read more

News From ACC (Autumn 2016)

No more residual levies From April, employers, earners, and motor vehicle owners no longer have to pay residual ACC levies. However it won’t mean reductions across the board. The residual levy rate calculation was based on old injury rates which have become out-dated, going back 10 years or more. The residual levies themselves were a kind of catch up to make sure there were enough funds set aside to pay…  Read more

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