IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
After the government increased the minimum wage rates earlier this year, it made a further amendment to the Minimum Wage Order, issuing a new fortnightly rate. The fortnightly rate is $1,140 for adult employees and $912 for starting-out workers and trainees. If you’re an employer already fully compliant with minimum wage requirements and your employees’ hours don’t vary from week to week, stop reading here. For you, nothing has changed.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
We have a number of Charity clients who are GST registered. The number one issue we have to deal with for these clients is sorting out what income streams should be subject to GST. Just because you are a Charity doesn’t mean that all your income is exempt from GST.
This has become relevant recently as the IRD has begun challenging a number of scenarios in this space. In particular, the IRD has published a Revenue Alert looking at private schools and kindergartens that required parents to make a “gift” to the school or related foundation. The school, therefore, didn’t charge GST on the “fees” and the parents claimed a tax credit on the “gift.” The IRD is investigating and reversing lots of these, and tax fraud charges are likely to those who promoted the arrangement! I tell my clients that they should treat all receipts as GSTable UNLESS they can prove that it is not. There is an alarming trend among charities (and this includes Churches, where honest and ethics are supposed to be virtues) to reliable a receipt as a “donation” and therefore grant a tax credit to the “donor” and avoid having to pay GST by the Charity (forgive my rant, but which part of claiming the input tax credit for the organization and then failing to pay the output tax credit is ethical?).
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Rules around tax breaks for charitable donations have undergone a lot of change in recent years. With the introduction of the Charities Act and the removal of the restrictions on deductions/credits for charitable giving the landscape is now quite different than it was a few years ago. Individuals and businesses can now claim a credit (individuals) or deduction (companies) for donations made to eligible organizations. The first thing to check is whether your intended recipient is actually eligible. They need to be recorded as a Donee Organisation by the IRD. You can find a list of these on the IRD website (http://www.ird.govt.nz/donee-organisations/donee-organisations-index.html). Being registered with the Charities Office is not necessarily the same (although in practical terms almost every registered charity is also a donee organization, there are some exceptions). You can only claim credits/deductions if you have a proper charitable receipt from a donee organization.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Currently, there is no requirement for a charity to have it’s accounts prepared to any standard (such as Generally Accepted Accounting Principles) or audited by an Accountant. While many do have an audit, it is mainly due to a requirement in their rules, or to requirements from funders. This is all set to change in 2015.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Keeping a log of your motor vehicle mileage is an important (and often overlooked) aspect of your record keeping. In this article I will give you some pointers on how to properly maintain the required records. The requirements and issues are different for each of the three methods of accounting for motor vehicle expenses (for a primer on the different methods of handling motor vehicle expenses check out our earlier article “Pimping your Ride“):
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Sometimes we get a client’s list of expenses from the year and it just makes us laugh! There are things listed
that clearly are not business expenses. Quite often there are things that are borderline, and there are always things that are simply unclear. In this article I want to address the topic of “Entertainment” expenses. Some things are just not deductible at all, some fully deductible, and some 50% deductible.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
The 2013 tax year ends in just a few days – over this coming Easter weekend for the vast majority of taxpayers. A few minutes of preparation now could save you hours of grief (and expense) later. Here are five things that you should spend a few minutes thinking about BEFORE 31 March that could save you time or tax:
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Some of you have a terminal tax bill due 7 April 2013. If you have IRD interest on these payments, you can pay a lower interest rate through Tax Management NZ.
Then I insist you pay again on 7 May 2013 for provisional tax. This could well be ‘a bridge too far and your cash flow just can’t take it.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
If you have a family then you may be entitled to Working For Families Tax Credits (WFF). WFF is effectively a tax rebate scheme. Many countries give you deductions or a tax-free threshold for having kids which you claim on your annual tax return. Because NZ has a fairly flat tax system we don’t do this, but we make up for it through WFF Tax Credits which effectively gives families a refund of income tax paid. In some cases, you can actually get back more than you paid in tax. The income thresholds are in fact pretty high – and many people could be entitled to WFF but haven’t applied.
The IRD Website has a good section on Working For Families including a tool for estimating your entitlement, and application forms. The formula is quite complicated as it depends on a number of actors including the number of eligible children, your income (known as “Family Scheme Income”), and the number of hours you and your partner work. Here are the maximum income points (the lower your income the more you receive – this chart only tells you when you cease to be eligible, for the 2011/12 tax year):
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
There are several ways to make a tax payment to the IRD (no, you don’t send it to me).
You can send a cheque to the IRD (if you can even find your chequebook) at Inland Revenue, PO Box 39050, Wellington Mail Centre, Lower Hutt 5045 (attach a note with IRD number, taxpayer name, Tax type and period end – see below). From October 2014 your cheque must be received by the IRD on time – it is no longer sufficient for it to be postmarked on time.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Having access to a vehicle is quite a necessity for a business these days. If you are in business for yourself your company vehicle is probably also the family car. This gives rise to some interesting tax questions about how much of your ride you can claim as a valid business deduction. There are a lot of things to consider – more than I can go through in this short article, but here are the three main methods for claiming a vehicle on your tax return.
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Taking the step to employ staff is a big one. But the reality is that your business can’t grow much with just one person. There are lots of details to know about when you are an employer, so getting good advice is essential (and doing what your mate does may expose you to the same legal issues he is exposed to, even if he doesn’t know it – so ask a professional, not a friend).
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
I find it frustrating when I buy something for business and get given a receipt or till docket and find that it is not a valid tax invoice. It’s amazing how many businesses issue invoices that aren’t valid tax invoices for GST purposes. So, having the personality that I do, I point this out to the clerk/owner and politely request a “valid” tax invoice. The most common response I get is “we’ve been giving them out like this for years and no one has complained.” Yeah – maybe. But that doesn’t make it right! These rules haven’t changed in the time that GST has been around so there really is no excuse for not getting them right
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
Last month I wrote about things that you should do BEFORE 31 March that could save you time or tax. This month I will highlight things that you should be doing now to make the process of creating your year-end accounts easier.
