INCOMING GOVERNMENT 2023
 
It will be interesting to see how the incoming Government deals with the legislation that is causing so much frustration to New Zealanders as a whole. They have stated their intention to remove the interest limitations but it seems the change in Trustee Tax Rates from 33% to 39% may still go ahead.   We'll see.


OTHER UPDATES


Repairs & Maintenance
It seems the Inland Revenue are trying to take a hard stance on repairs and maintenance when it comes to buildings.  It has been claimed in one Inland Revenue audit that any repairs to a building as capital items and not repairs. This goes against both legislation and their own written policies.    However the practical side is that improvements are capital and anything designed to bring the building back into its original state at purchase are repairs.

​

Foreign Investment Income 
Just a reminder that the tax legislation is complex when you have Foreign investments including those held in an investment portfolio and the income you actually physically receive from those investments is not necessarily going to be the same as the calculated taxable income. This causes a lot of confusion ( and headaches).  The Inland Revenue have stipulated how such overseas income is to be calculated for tax purposes depending on your situation.  This unfortunately means that the small Taxation Summary Report provided by your investment broker may not be sufficient and that we may require the full  Report as well - especially in the case of a Trust which has to prepare financial statements.

Bottomline:  Please ask us if you have any queries regarding your foreign investment income as shown in your tax return. 

 







 
​

BUDGET 2023
 
The main piece of the budget from a tax and accounting perspective is the change in Trustee Tax Rates from 33% to 39%.  According to the Government this should bring an extra 350 million.   We'll see.


OTHER UPDATES


Motor Vehicles 
If you're considering purchasing a vehicle for your business please touch base with us before the actual purchase so that we can make sure that you get claim all that you are entitled to claim on the purchase and running costs.
The Vehicle Mileage rates have also gone up due to fuel cost increases. For the first 14,000km it is now 95 cents per kilometre.
Over that Petrol/Diesel 34 cents;
Petrol Hybrid 20 cents and Electric 11 cents.
 

Protective Clothing

 
Inland Revenue do not consider normal clothing to be deductible

for income tax purposes. Protective clothing are items that are specifically required, for example steel cap boots,  hi-vis vests,

wet weather gear.  Denim jeans and  shirts are not protective clothing in the Inland Revenue's mind. 

 


GENERAL REMINDERS 


And now for some general reminders:

Moving Address
If you do happen to move address during the year please don't forget to let your accountant know. 
Unfortunately, our crystal balls are not accurate when it comes to knowing about changes in your postal and email  addresses or
phone numbers too for that matter. 
Please be kind to us and let us know.
Thank you.





 
​

OFFICE NEWS
 
We start May with some enthusiasm and our new office manager, Sue, has slotted in brilliantly.
​
If you haven't brought your work in for 2022, then while you're gathering that  information ( in a hurry) , you might as well get 2023 done at the same time.  It might even save you a little bit of money.
​
​
OTHER UPDATES


GST Changes 
When you acquire goods/services for $10,000 or less you need to determine whether the principal purpose is for making taxable supplies. Full GST can be claimed if the principal purpose is to make taxable supplies. This is called the Principle Purpose Method.

You can chose to claim a business percentage of the goods/services using the  Apportionment Method. If you pick the Apportionment Method then it has to be used for all goods/services under $10,000 for at least the next 24 months.

For goods and services acquired over $10,000 (excl GST) you need to use the Apportionment Method. When calculating the business use any method that provides a fair and reasonable result may be used. This can be based on past records, experience, business plans or another suitable method.


Motor Vehicles 
If you're considering purchasing a vehicle for your business please touch base with us before the actual purchase so that we can make sure that you get claim all that you are entitled to claim on the purchase.
​
​
Protective Clothing 
Inland Revenue do not consider normal clothing to be deductible for income tax purposes. Protective clothing are items that are
specifically required, for example steel cap boots, hivis vests, wet weather gear.  Denim jeans and  shirts are not protective 
clothing in the Inland Revenue's mind. 

 
​
​
GENERAL REMINDERS 
​
​
Just some general reminders:
​
Tax Payments:
When paying your income tax online, the tax type is usually "INC" no matter whether it is terminal or provisional.
 
Terminal Tax is the tax wash up for the prior financial year.  In this case for 2023, terminal tax will be due either February or April 2024 for taxpayers with a standard balance date of 31 March 2023.
​
Provisional Tax is payment in advance on the current tax year. So currently we are now in the 2024 income tax year
(ending 31 March 2024) and provisional tax is usually due in August 2023, January 2024 and May 2024 for taxpayers with the standard March balance date.
​
​
Rental Interest:
Limitation on the claim of rental mortgage interest is  50% from 1 April 2023, if the rental property falls under the  Interest Deductibility Limitation Rules.  This could have the effect of turning a rental loss into a rental profit for tax purposes  which may mean tax to pay for some landlords.



Weather Support
Inland Revenue are putting in place a tax relief package for the January and February 2023  adverse weather
events. The details of the package is to be announced later in May.




 
​
​​
​

OFFICE NEWS

The Team at Hornby Accounting will be back on deck this week ready to start a new year as the countdown starts to 31 March 2023.  We wish you all a Happy New Year and hope your break (long or short) over the festive season was a good one. 

​

If you haven't brought your work in for 2022, the time is running out so please contact us as soon as you can about it so we can ensure that your returns are all going to be filed on time. 

​

​

OTHER UPDATES

​

Since our last update not a lot has happened in the Inland Revenue arena yet. Although the Inland Revenue are now clamping down on the use of  Electronic Suppression Software Tools (ESSTs) as a means of trying to evade your tax obligations. So if you have been using such software be warned. 

​

Real Estate agents are also on the Inland Revenue's  radar - their  main target is understated income and  private expenses claims.  So if you do claim private expenses for business use then make sure there is a strong nexus between the expense claimed and the business. And that you return your income in full. 

​

​

The Inland Revenue are also going through GST Returns to ensure that you are on the correct filing period. So if you are one of those who receive notification from the Inland Revenue it means that your filing period is likely to move from six monthly down to two monthly or  for those with $24m turnover to one monthly.  Just a reminder:

​

1.   Annual Sales under $500,000 you can file  GST returns for a six month period (Usually April-September   and  October to March)

2.  Turnover over $500,000 then the filing period is two monthly (usually April-May, June-July, August-   September etc)

3.  Turnover over $24,000,000 then the filing period is monthly

​

​

​

​

GENERAL REMINDERS 

​

​

Just some general reminders as we head towards a new financial year:

​

Currently there is no GST on bank fees or interest so you can't claim these expenses in your GST Returns.

​

The Small Business Loan Scheme - the loan is interest free only for two years  and applications can be made

up to 31 December 2023.  Note that if you have  received a Small Business Loan and your business ceases or is sold, 

or changes then Inland Revenue must be notified if you have not already repaid the loan before  sale/cessation/change takes effect.   Inland Revenue is checking up on these loans to make sure that applications meet all the criteria.

​

Assets over $1,000  (excl GST) can be written off in full in the year of purchase but as the Christchurch earthquakes

showed - it is preferable to having some of these assets still showing in your Fixed Asset Schedule in case you need

to make an insurance claim.

​

​

Currently there are no changes to the income tax rates but we are keeping an eye on it as there could be changes

from April 2023. But remember individual taxable income of   $180,000 and over is now taxed at 39%. Other income tax rates remain unchanged.

​

Limitation on the claim of rental mortgage interest is  50% from 1 April 2023, if the rental property falls under the  Interest Deductibility Limitation Rules.  This could have the effect of turning a rental loss into a rental profit for tax purposes  which may mean tax to pay for some landlords. 

​

Tax Due dates coming up:

​

20th January  - Quarterly FBT,  Employer Deductions,

​

30th January - GST Return & Payment for Returns ended 31 December

​

7th February -  Employer Deductions for Large Employers,

                     (If not extension of time then today also is Annual FBT, 2022 Terminal tax, 2022 Working For Families

                      and Student Loan end of year repayments)

​

20th February - Employer Deductions.

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28th February - GST Return & Payment for Returns ended 31 January. 

​​

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OFFICE NEWS

There are some new faces at Hornby Accounting and we are happy to welcome Susan Foyle and Dimple Lal to our Happy Accounting Band.  Some of you may already have met them. Both are highly experienced Accountants and amazingly nice friendly people. They bring their skills and a depth of knowledge which can only make our service to our clients even better. 

​

We have also just said a very sad farewell to Giarne Harrison. A lot of you would have known her as she did the Company Annual Returns and was responsible for reconciling Client Xero Bank transactions among many other things.  We didn't want her to go and she didn't want to go either but circumstances change. We wish her all the best  and there'll be an invite to the 2022 Christmas Do in the post, Giarne. :).

​

OTHER UPDATES

It has been a while since we last updated this page and the reason is simple. There has been a lot of information put out there in all areas so that for us to repeat it seemed an unnecessary duplication.  It has been a difficult few years for us all but hopefully we can look forward to a nice summer and a happy festive season. and below is a few of the recent tax changes that may affect you: 

​

1. Residential Rental Interest Deduction

   • For the tax year ended 31 March 2023 the maxcimum percentage of interest able to be claimed is 75%​

   • For the year ended 31 March 2024 the percentage drops to 50%

2. ​Fringe Benefit Interest Rates​

   • From 1 July 2022 the interest increased to 4.78%​

3. ​Brightline Test​

   • Does not apply to properties purchased before 1 October 2015​

   • Applies to properties purchased after 1 October 2015 but there is an exemption if the property in questions is (or was until sale) your main home.

   • The Brightlinet test is  2-5-10 years depending on when the property was purchased.

   • Please speak to us before you consider selling a residential property that is not your main home or if you have any questions regarding the Brightline Tests.

4. ​GST Changes are Coming​

   • Minimum requirements for record keeping​ from 1 April 2023

     • Depends on type of taxable supplies​

       • Less than $200​

       • $200 to $1,000

       • More than $1,000

       • Imported Goods & Services

       • Second Hand Goods

   • New terminlogy to learn

     • Tax Invoice                      = Taxable Supply Information​

     • Debit/Credit Note             = Supply Correction Information

     • Buyer Created Tax Invoice = Buyer Created Taxable Supply Information

   • ​The Inland Revenue have already simplified the GST Invoices ​from 30 March 2022

     • Namely Inland Revenue approval not required for Buyer-Created Invoices (other conditions must still be met)​

     • 2 or more Registered persons can form supplier groups so they can issue shared invoices for GST purposes

5. ​​Small Business Cashflow Loans (Re: Covid-19)

   • The Inland Revenue will be reviewing these loans to ensure that the criteria was met at the time of the loan and is continuing to be met if the loan hasn't already been repaid.

   • Reminder that interest will be charged on loans not paid within the interest free period.

6. ​Kiwi Saver Holidays

   • Applications can be made through MyIR for Kiwisaver holiday -  this applies only for a year but currently can be renewed annually. This benefits not only the employee but the employer as well.

   • Anecdocal stories suggest that getting funds out of kiwisaver under Hardship Relief is not easy and the amount of information required for the Kiwisaver Provider to consider any application is substantial.

7. ​Use of Money Interest

   • From 30th August 2022 the interest payable to Inland Revenue has increased from 7.28% to 7.96%.

   • Inland Revenue will pay 1.22% on amounts over $100.

8. Difficulty in Paying Your Tax

   • Don't let the tax and penalties etc continue to mount.  The Inland Revenue are able to offer assistance if its under hardship, illness,related to Covid or related to a disaster ( eg flooding or earthquakes).

   • Payment arrangements can be tailored to suit your financial position.​​​​​​​​​​​

​

​

FROM THE MINISTRY OF SOCIAL DEVELOPMENT

           Te Manatu Whakahiato Ora

​

FREQUENTLY ASKED QUESTIONS & ANSWERS COVID-19 SUBSIDY AUGUST 2021

Note: if there is any difference between the answers below and the declaration, the declaration prevails.

​

Is the Wage Subsidy open for applications?

Yes, applications opened on Friday morning and are open for two weeks.

Go to the Work and Income website for more information and to apply. https://www.workandincome.govt.nz/covid-19/wage-subsidy/index.html

​

Who can apply?

Business needs to meet the eligibility criteria and agree to meet the obligations in the declaration to be able to get a COVID-19 Wage Subsidy August 2021. It's available to all New Zealand businesses and self-employed people that meet eligibility criteria. This includes charities, incorporated societies and NGOs (non Government organisations)

​

Do businesses have to have been impacted by the change in Alert Levels?

Yes, there is a ‘revenue test’.

This means the businesses need to have had (or expect to have) a minimum 40% decline in revenue in the 14-days since the Alert Level escalation (ie between 17 – 30 August 2021), when compared with their revenue during a typical 14-day period in the six weeks. immediately before the Alert Level escalation. There’s an option for businesses with highly seasonal revenue as well. The decline in revenue must be caused the move to Alert Level 4 on 17 August 2021 has had on their businesses.

​

Are there other criteria?

Yes there are, and there are also obligations you have to agree to. It’s really important that you read the declaration that is part of the application. This is what you are agreeing to when you submit an application.

​

How much is the subsidy?

The subsidy is for two weeks, and the payment rate is:

• $600 a week (full time – typically works 20 hours or more a week) and

• $359.00 a week (part-time - typically works less than 20 hours a week).

• ​

Can I apply if I work for myself and don’t have any employees?

Yes, if you’re self-employed (which means you pay your own tax) you can apply as long as you meet the drop in revenue test and other eligibility criteria.

​

We help New Zealanders to be safe, strong and independent Manaaki tangata, manaaki whānau

​

What information do I need?

The information you need is clearly spelt out on the Work and Income website.

It’s things like your business name, IR number, bank account number and contact details. If you’re applying for employees you’ll need their name, date of birth, IR number and whether they typically work less than 20 hours, or 20 hours or more.

To ensure applications get processed as quickly as possible, it’s important the information provided matches what is held by Inland Revenue. If it’s different, applications will be held up.

Employees need to agree to you providing their information.

How long will it take to be paid?

We’ll process it as quickly as possible. We need to check the information you've given us is the same as what's held by Inland Revenue. If it isn't, there could be a delay.

We can‘t give you information about the status of your application over the phone. We'll be in touch as soon as we can.

If your application is not approved we’ll email you to let you know.

Detailed questions about Wage Subsidy

Do I need to provide evidence of the impact on my business?

You will need to prepare and keep evidence to support your declaration (but you don’t need to provide this on application). You may be asked for this later, so it is important to keep it.

What about paying employees?

If you are receiving the COVID-19 Wage Subsidy August 2021, you must keep employing the employees named in your application and pay your employees in accordance with employment law. The wage subsidy is a contribution towards paying the employees named in your application. There’s a section on the website that goes into more detail about paying people.

What happens after the two weeks of the Wage Subsidy?

If the Government decides to extend the wage subsidy, businesses will need to

make another application. At this stage the wage subsidy is only for two weeks.

Other COVID payments

What is the resurgence payment?

As well as the COVID-19 Wage Subsidy, there’s also the Resurgence Support Payment, available through Inland Revenue. This can help with costs like rent or fixed costs for businesses who have experienced at least a 30% drop in revenue. Eligible businesses can get this and the Wage Subsidy at the same time.

Applications through Inland Revenue will open at 8am on Tuesday, 24 August.

https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence- support-payment

What about Leave Support payment and Short Term Absence Payment?

The Leave Support Scheme is available for employers, including self-employed people, to help pay their employees who need to self-isolate and can't work from home because they are in one of the affected groups and have been told to self- isolate. The Short-Term Absence Payment is available for businesses, including self- employed people, to help pay their workers who cannot work from home while they wait for a COVID-19 test result.

You can only get one of the payments from MSD (Wage Subsidy, Leave Support or Short Term Absence Payment) for the same employees at a time.

The payment rates for Leave Support and Short Term Absence Payment will be increased from 24 August 2021 (tomorrow) in line with the Wage Subsidy now being paid.

​

Note: Number to call for specific enquiries is 0800 40 80 40.

We don’t want people to call to just check on application status etc.

​

General information about access to food, services etc

• If people need financial help to buy food, contact Work and Income.

• If they need help to access food or get it delivered because they can’t get out, family, whānau, friends and neighbours may be able to help.

• If they need food urgently, a local foodbank may be able to help.

Check the COVID-19 website for more information. There’s a section about services and support at the bottom of the home page. https://covid19.govt.nz/

Support Available

​

• Remember:

  • ​Keep safe – follow health guidelines and only have staff at work if it fits the Essential business guidelines  - see https://covid19.govt.nz/business-and-money/businesses/doing-business-at-alert-level-4/#alert-level-4-businesses-and-services 

•  

• Govt Support & Advice

  • For a good overall summary and links to key support, this business.govt.nz site is easy to use: https://www.business.govt.nz/covid-19/financial-support-for-businesses/
     

  • If you are going to change any working arrangements with staff and any changes to what you pay them, make sure it is in accordance with your employment agreements or that you get your employees’ agreement in writing (email and text is OK if you can be sure it is from them).
     

  • Wage Subsidy:

    • In terms of the Wage Subsidy, here are some general guidelines:
       

      • The Wage Subsidy is able to be applied for now – and will be open for two weeks.  So, you do need to consider quite urgently, whether or not you qualify.
         

      • To access the Subsidy there are a number of eligibility criteria you must meet, including:

        • You must be able to show or estimate (and subsequently be able to show) that your revenue for the fortnight 17-30 August is at least 40% lower than your revenue for a typical fortnight in the period 6 July – 16 August.  Do not assume – you will need to work the figures.  (And previous periods cannot include income from other subsidies)

        • You must be able to demonstrate you have tried other avenues to obtain $ - including your bank, any insurance coverage or spare cash reserves.

        • You must have agreement in writing from your employees to you sharing their information and a few other things – I attach a copy of a letter that they can sign here.
           

      • To apply follow the guidelines on this page https://www.workandincome.govt.nz/covid-19/wage-subsidy/how-to-apply.html#null
         

      • This can be applied for if you are self-employed – you would need to identify what you normally pay yourself per week.
         

      • In terms of paying staff, your prime responsibility is to pay as normal.  To move away from that you need to use provisions in your employment agreements or have negotiated with your employees.  If you do receive a subsidy you are expected to use best endeavours to pay at least at 80% - but it does not mean you only have to pay 80%.  It all depends on your situation.

​

• Business Resurgence Support:

  • You may also qualify for the Business Resurgence Support. Follow this link and see if you qualify: https://www.ird.govt.nz/covid-19/business-and-organisations/resurgence-support-payment/apply

Take Care & Stay Safe

   Geoff & The Team at Hornby Accounting

​

We would also like to thank Mike at Essential HR for providing us with the relevant information.

Lockdown Level 4

​

The Government has just announced  lockdown Level 4 to take effect today and for the next three days at least.

​

For our valued Hornby Accounting Clients this means that you cannot come into the office to see us - we won't be there.  However you can still reach us by phone ( messages will be picked up and calls returned), texts and emails.

​

Any issues you may have can still be handled by us remotely.  So no worries there.

​

Remember Geoff can be contacted on his cellphone number (021-2639439) if the matter is urgent. 

​

Please stay isolated and safe and we will all be back on deck as soon as possible. 

​

Take Care

   Geoff & The Team at Hornby Accounting

CHANGES TO BRIGHTLINE TEST AND

INTEREST DEDUCTIBILITY FOR RESIDENTIAL PROPERTY INVESTMENTS

​

​

The Government has just announced new changes that will effect Residential Property Investors.  Once we know all

the details we will put out a newsletter with the relevant details but for now the main points are:

​

INTEREST WILL NOT BE DEDUCTIBLE AGAINST RENTAL INCOME FROM 1 OCTOBER 2021 FOR INVESTMENT PROPERTY PURCHASED AFTER 27TH MARCH 2021.  

​

PROPERTY PURCHASED BEFORE 27TH MARCH 2021 WILL BE ALLOWED SOME INTEREST DEDUCTIONS AT A REDUCING RATE  (75%, 50%, 25%, 0%) UNTIL IT REACHES  $NIL BY 2025.

​

​

THE  5 YEAR BRIGHTLINE TEST  HAS BEEN EXTENDED TO 10 YEARS

​

THERE ARE SOME EXEMPTONS FOR NEW BUILDS

​

​

On the information available at this point, the main impact will be that taxable rental income will increase for landlords who are paying off mortgages on their rental properties.  This will be in addition to the ring-fencing of losses that currently applies.  

​

​

More details when we know them....

As an Employer.....

​

There is a lot of confusion around the employer's obligations with regards to statutory holidays as well as employee rights & entitlements.  Hopefully we can explain it simply.....

This year Waitangi Day falls on a Saturday  (6th February)-

​

Any employee who normally works a Saturday then Waitangi Day is treated as a Public Holiday as normal.​

Basics        -  the day is a paid holiday 

​

if the employee works that day then they get paid time-and-a-half with a paid day-in-lieu to be taken a later date.

​

Because Waitangi Day has been Mondaydized then....

​

For any employee who would normally work on Monday (8th February), Monday would be treated as the  Public Holiday  instead.

​

Basics        -  the day is a paid holiday 

​

if the employee works that day then they get paid time-and-a-half with a paid day-in-lieu to be taken a later date.

​

​

​Employees

who don't normally work   Saturday but work Waitangi Day Saturday get paid time-and-a-half. No day in lieu.​

​

who don't normally work  Monday (8th February) but work that Monday also get paid time-and-a-half. No day in lieu

​

who don't normally work either Monday or Saturday and don't work those days,  miss out entirely.  No pay and no day-in lieu. For them things are just as normal.

​

​

Additional Things to Note:

An employee cannot be made to work on a Public Holiday unless their employment contract has a clause requiring them to be avail to work on Public/Statutory Holidays.

​

If an Employer closes both Saturday and Monday they still have to pay employees their entitlements for the public holiday and they cannot make their employees take annual leave on one of those days unless 14 days written notice has been provided.

​

​

​

​

​

​

.

Minimum Wage

​

The minimum wage rate goes up to $20.00 from the 1st April 2021.

Note that is applies on a pay-period by pay-period basis.  So if your employees are on a salary you need to be aware that if their equivalent hourly rate  for the hours actually worked is less than $20.00 per hour - you are in breach of the legislation.  It doesn't matter that the following pay-period  their hourly rate might be $25 per hour.

​

Please talk to us if you have any questions.

​

​

Personal Tax Increase

​

Another increase this time to the personal tax rate. If your income is over $180,000 then your new tax rate on amounts over $180,000 is 39% - this is an increase of 6%.  It takes effect from 1st April 2021. In keeping with this from 1st October 2021 there will be a new Resident Withholding Tax rate of 39%. This is effective  six months later to allow updates to the various systems used by the Banks etc.

​

​

​

​

​

​

.

Provisional Tax

Provisional tax is charged when your terminal tax for the prior year is over $2,500. For example in 2020 you filed a tax return on 31 July 2020, showing $3,567,89 is payable by 7th April 2021  ( without a tax agent this would be February not April). This would make you a provisional tax payer for 2021 - with instalments due August 2020 , January  and May 2021.

​

Under the standard option the amount would be $3567.89+ 5% uplift ( $3,746) divided by three ( eg $1,249 per instalment).

​

Due to Covid-19, the Government has passed legislation increasing this $2,500 limit to $5,000. In the above example, as your terminal tax is under $5,000 you would not be deemed a provisional tax for 2021 and therefore would have no payments to make in August, January or May on that basis.

​

This is the position of most taxpayers, however there are other options available for paying provisional tax that may be more suited to your particular requirements.  Please see us or your Tax Agent  if you have any questions about provisional tax.

​

​

Terminal Tax

Terminal tax is due on 7th April 2021 for those taxpayers with Tax Agents and standard 31 March 2020 balance dates.  If you do not have a tax agent then payment is due 7th February 2021.

​

If due to Covid-19 you are unable to make full payment by the due date, please contact us or your Tax Agent who can advise you of your options. Inland Revenue  are able to reduce any late payment penalties or set up payment instalment arrangements if you inability to pay is due to Covid-19. The key here to is to get something place well before the due date for payment and not well after the due date for payment.

​

​

Temporary Loss Carry Back Scheme

Businesses expecting to make a loss in 2020 or 2021 now have the ability to off-set that loss to the preceding year instead of carrying it forward into future tax years. Now the key here is that the preceding year had a profit and  the business paid tax.  So if you have a loss in 2020 and a profit in 2019, you can offset 2020's loss against 2019's profit and Inland Revenue will refund any overpaid tax.  

​

Carrying back a loss can effect other taxes but will not change any shareholder salaries, dividends or subvention payments that may have already been made for that preceding year. 

​

The loss carry back is only available for 2020 ( carry back into 2019) and 2021 ( carry back in to 2020)

​

This Loss Carry Back does not apply to individuals where the Inland Revenue issue an automatic assessment  ( what used to be called PTS or IR5)  and does not apply to Companies who have not maintained 49% common ownership or Groups who have not maintained 66% common ownership throughout both the loss year and the preceding year.  With regards to companies, the Inland Revenue will not refund any taxes where there are insufficient imputation credits available to cover the refund.

​

Application must be made to the Inland Revenue before your tax return is filed  and can be done through your Tax Agent or myIR online service account. 

​

Please let us (or your Tax Agent)  know if you want to take advantage of this Scheme.

​

.

Automatic Income Tax Write-Off Threshold

For 2020 only, Inland Revenue will be writing off terminal tax amounts of $200 or under. This write off applies ONLY to individuals, who receive an automatically calculated assessment. (What used to be called an IR5 but is now commonly known as a PTS (Personal Tax Summary).

Filing Returns & Making Payments

The Inland Revenue still expect to you to file all relevant tax returns on time ( eg. GST, PAYE, FBT, Income Tax etc). However, the Inland Revenue do have initiatives to help with making the payments.

Payments may be made via:

• Westpac - the Bank will be open one day a week at least even under Lockdown.

• Credit Card or Debt Card

• Direct Debit Payments

• Internet online Banking

• Acceptable Payment Arrangement( monthly instalments)

If you are having difficulty making payments, the Inland Revenue have the discretion to write-off any penalties ( including Use of Money interest (UOMI)) if your inability to pay is directly related to Covid-19.  There must be a request for remission of the interest & penalties charged to the Inland Revenue with an explanation as to how the Covid-19 pandemic has impacted on your ability to make your payments on time.

Covid-19 Cashflow Loan Scheme

Just a reminder that you have until 31 December 2020 to apply for the Inland Revenue Cashflow Loan. The maximum amount available is $10,000 plus $1,800 per full-time equivalent employee.  You apply for it on the Inland Revenue website. The conditions are:

• It’s a one-off loan

• Term is 5 years

• Interest free ONLY if repaid within 1 year

• Less than 50 or fewer full time employees

• Repayments are not required for the first 2 years

• Interest will be charged at 3%

  • NB: the  interest will be charged from the start of the loan.
     

• IMPORTANT –

  • If a default event ( Clause 9.1) occurs then the loan plus any interest becomes repayable IMMEDIATELY

  • A default event is defined as

    • You do not make your payments as due

    • You cease to carry on the business for which the Loan was made

    • You sell the business or substantially all of the business assets

    • You go into liquidation/administration/receivership or similar

    • You breach or do not comply with any information made on your behalf in order to qualify for either the cashflow loan or the wage subsidy scheme ( for example if you received the Wage Subsidy and the DSW discover that you did not qualify for it then the cashflow loan will become immediately repayment with any interest that may have been charged).

.

​​

• 5th   October      -   Employer deductions for large Employers (ie more than $500,000 PAYE + ESCT per annum)

• 20th October      -   Employer deductions payment due for both large and small Employers

• 28th October       -  GST Return and Payment due for the period ended 30 September 

• 28th October       -  Provisional Tax due if have a March balance date and use the ratio method.

• 5th   November   -  Employer deductions for large Employers (ie more than $500,000 PAYE + ESCT per annum)

• 20th November   -  Employer deductions payment due for both large and small Employers

• 28th November   -  GST Return and Payment due for the period ended 31 October 

• 5th   December   -  Employer deductions for large Employers (ie more than $500,000 PAYE + ESCT per annum)

• 20th December   -  Employer deductions payment due for both large and small Employers

• 15th January       -  GST Return and Payment due for the period ended 30 November 

• 15th January       -  Provisional Tax due if have a March balance date and have a provisional tax to pay.

• 15th January      -  Employer deductions for large Employers (ie more than $500,000 PAYE + ESCT per annum)

• 20th January      -  Employer deductions payment due for both large and small Employers

• 20th January      -  FBT for the quarter ended 31 December 

• 28th January      -  GST Return and Payment due for the period ended 31 December

• 5th   February    -  Employer deductions payment due for large Employers

• 7th  February     -  Student Loan Year End Payment due if you have one

• 7th  February     -  Terminal Tax and Working For Families Payments due if you have no extension of time (EOT)

• 7th February      -   FBT Income Year Return and Payment due if you have March Balance date and no EOT

• 20th February    -  Employer deductions payment due for both large and small Employers

• 28th February    -  GST Return and Payment due for the period ended 31 January

• 28th February    -  Provisional tax if March balance date and use the Ratio Option

If you are going to buy a business, purchase or sell land, invite an employee to become a shareholder or partner in your business, or make any substantial changes to your financial situation

PLEASE talk to your Accountant first. 

What may seem like a great idea could cause you serious problems if it is not done right.