MWB Summer 2016 Newsletter
Buying off the plan? The bright-line test and you
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 home is exempt and there are some other exceptions such as inheritance and relationship break-ups. Read more....
Filling employment gaps over summer
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. Read more....
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 money to help your business earn income. Most business-related expenses are fully deductible. If the expense doesn’t help your business earn gross income, it’s private and you can’t claim it as a tax deduction. Read more....
FBT on gifts and entertainment
If you are giving gifts to your team you may also be liable for fringe benefits tax. There's a $300 exemption from paying FBT per employee per quarter so if the value of the gift is less than $300 you may be exempt. However, if the value of total benefits for an employee goes over $300 for the quarter year (and provided the total value of all benefits doesn’t exceed $22,500 for the year), the full value of the benefits is subject to FBT. Read more....
MWB Winter 2016 Newsletter
Risk and rewards
Underpaid income tax?
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 taxman additional income tax can put pressure on your business’ cashflow. With Inland Revenue’s interest clock continuously ticking at 8.27 per cent (and at 9.21% for tax debt incurred up until 8 May 2016) while that tax remains unpaid, the cost can quickly add up.
An option we have discussed before is tax pooling. It is a service designed to reduce interest costs and provide payment options for provisional taxpayers.
How does it work?
For underpaid income tax, you can settle what you owe IRD by paying through a tax pooling intermediary such as Tax Management NZ (TMNZ) at an interest cost lower than the interest IRD charges on underpaid tax.
New GST online filing
The first steps towards tax simplification lie in the new option for taxpayers for online filing of GST returns. Inland Revenue has been working with two software providers to pilot a service so taxpayers can file their GST returns directly from their business software. At present this can be used for GST only returns or for combined GST and provisional tax returns, although this option is not open to taxpayers who use the ratio option to calculate provisional tax.
Note: these dates apply to those clients for whom we prepare tax returns. Different dates will apply for those clients for whom we don't prepare returns. Please ask us if you'd like more information.
2016 Client questionnaires
2016 client questionnaires are loaded on our website under the resources, please download the questionnaire(s) that is relevant to your business. Once completed, please forward with your records to our office. Please ensure all parties sign the relevant questionnaire(s).
Special Alert Health & Safety 2015
The new health and safety legislation has passed and we all need to start planning.
Your business needs to be compliant by 4 April 2016, when the new Health and Safety at Work Act takes effect, replacing the Health and Safety in Employment Act 1992.
A lot of information is still to come on how the Act will operate. Regulations will be released to clarify how it will work for different industries. Work Safe New Zealand will provide guidelines to businesses and workers.
MWB Spring 2015 Newsletter
Health and safety
The Health and Safety Reform Bill, which started its slow progress last year, took another step forward in late July with its second reading in Parliament.
The Employment Standards Legislation Bill has been introduced to parliament, proposing changes to strengthen enforcement of employment standards. This will introduce tougher sanctions for breaches and greater accountability for people and entities associated with the employer — such as directors, senior managers, legal advisors — if they are knowingly involved when an employer breaks the law.
Double tax agreement with US
Are you a US citizen living in New Zealand? If so, your income is subject to both USA and New Zealand income tax requirements.
ACC CoverPlus Extra – are your levies overdue?
This year ACC has cancelled unpaid CoverPlus Extra policies that were overdue. In July they had cancelled about 2,600 policies and expected to cancel the remaining 1,600 policies with unpaid CoverPlus Extra invoices in August.