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GST Accounting Basis: Payments, Invoice, or Hybrid

When registering for GST, taxpayers have a choice to register on an invoice basis, payment basis, or hybrid basis. For businesses that meet the criteria, we usually recommend registering on a payments basis because it is simpler, has less administrative time and costs, and GST payments align with regular cash flow cycles.This article explains the GST payment basis criteria and why we usually recommend this option....

Home Office Claim

A home office claim represents a tax deduction for the portion of your home that you use as an office. It’s calculated as a percentage of your total home expenditure.You would pay for these costs regardless if you are in business or not, so why not make the most of an extra tax deduction to reduce the tax that you pay?Most small and medium businesses use a portion of their home as an office. Make sure that you claim a deduction for these expenses.This article reminds you about calculating the ...

Taxing Subdivisions on Own Home

With rising interest rates, many clients are looking at opportunities to utilise an existing property to develop, make a profit and pay down debt. While the below example looks at a subdivision and construction of two townhouses, other clients are looking at AirBnB for residential rental properties (which are higher yielding but more work) or renting out a spare room at home. We’ve recently come across the below question (name and location changed for privacy reasons). Question Justin bought a...

Significant impacts of removing interest deductibility on residential property

In March 2021, the government announced the removal of interest deductibility on residential rental properties. For properties acquired before 27 March 2021, the removal of the interest deduction is being phased in over the next five years, as outlined below. Date interest incurred Percentage of the interest that can be claimed 1 April 2020 to 31 March 2021 100% 1 April 2021 to 30 September 2021 100% 1 ...

Company Wind-up Process

Once a business sells (or stops trading) or a company sells its property (real estate), we recommend winding up the company. This is important because, otherwise, IRD will continue to expect a tax return for each financial year (even if the company does not trade), and the Companie's Office will require an annual return filed each year. This article outlines the steps required as part of the company windup process. There are other options available (such as more formal liquidation). However, in ...

Personal Services Attribution Rules

Specific income attribution rules apply when an individual provides personal services through an associated entity (such as a company, trust, or partnership). The purpose of these rules (tax legislation) is so that the individual does not avoid a higher income tax rate by diverting income to an associated entity. This article explores the income attribution rules in more detail and outlines when they apply and the exemptions. There may be valid commercial drivers for an individual to use an asso...

Summary of Trusts

A trust can be an efficient vehicle that can provide asset protection, allow for succession planning, and may provide incidental tax savings. Profits are taxed at 33% compared to the top marginal tax rate of 39% for individuals with income over $180k. This article looks at a brief overview of the nature of trusts and trustees. A trust is an arrangement where a person (the Settlor) settles on a person or persons they trust (the trustees) property for the benefit of others (the beneficiaries) on t...

Accounting Principles

Understanding accounting is crucial. It is one of the most important skills for business owners, investors, and creating wealth. High net worth families and our most profitable clients understand accounting and the difference between cash and profit. This article’s purpose is to help you understand one of the core concepts of accounting, accrual accounting. Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs, rather than when cash is rec...

Company Office Annual Returns

Every company in New Zealand is maintained in a company register called the New Zealand Companies Office. This register has a list of every single company in NZ (both private and public), and includes the key details of the company; its name, incorporation date, directors, shareholders, founding documents, shareholding changes, etc. This information is available to the public to view, and search. For example, Air New Zealand Limited (a listed company) details can be found here. This is all publi...

Signed tax returns

We are still waiting on a number of signed tax returns to be returned to us. We cannot file your tax return with IRD until we receive the signed copy back from you. Please urgently return these to us so we can file them with IRD before the due date.Please, can you please email this to Nicky as soon as possible. ...

Preparing for Interest Rate Rises

Interest rates have increased from 2% last year to floating rates of 4.79% as of today. If your current mortgage is coming off a fixed term portion, you could be in for a surprise. No one has a crystal ball, or where rates will be this time next year, or in a few years. The intention of this article is to start thinking about what effect this will have on you. This article will outline some tips you can do to prepare and think about now:...

Omicron and your business

The Omicron virus is here, check out the latest government information on what you need to do and ensure you have a plan for your business and your family.  https://www.business.govt.nz/c......

Superannuation Eligibility is changing

There is a new law coming for those turning 65 years old on or after 1 July 2024. Whether you were born in New Zealand or overseas, it will require people to have been in New Zealand for a minimum of 20 years since the age of 20, instead of the current 10-year minimum.  Something to think about if you are in this category. For more information click here...

Family Tax Credits Increasing

Legislation has been passed and Family Tax credits are increasing from 1 April 2022.   Over 300,000 New Zealand Families will receive extra government assistance via the Family Tax Credit, Best Start Tax Credit and the Minimum Family Tax Credit. Click here for further information. ...

COVID 19 - December update

We are still dealing with the ever-changing environment of what Covid 19 is doing to you, your business and life.  2019 seems like a long time ago when everything appeared to be simpler. The Government continues to support businesses under the new COVID Protection Framework that came into effect on 3 December 2021. The following support is available (subject to meeting eligibility criteria)  Resurgence Support Payments and Transition PaymentWage Subsidy Short Term Absenc...

GST Due Dates for 2021/2022

We have listed all GST return and payment dates below. We will be providing regular updates throughout the year, however you may wish to set calendar reminders to ensure these important dates are not missed.  15 Jan - GST return & payment is due for period ending 30 Nov 2021 15 Jan - Provisonal tax payments are due if you have a March balance date 28 Feb - GST return & payment is due for period ending 31 Jan 2022 7 Apr - Terminal tax payments are due if you have a March balan...

COVID-19 Resurgence Payment Update

There is additional business support being made available in the form of the COVID-19 Government Resurgence Payment.  The next payment, which is available from 29 October through myIR, will remain at the current rate of $1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTE.  Subsequent payments will be for $3,000 plus $800 per FTE, still up to a maximum of 50 FTE.  The frequency of the payments will also change. They will be available fortnightly...

AirBnB and your Property

There have recently been significant tax changes to how residential rental properties are taxed. These fundamental changes include ring-fencing of rental losses, removing interest deductibility, and increasing the bright-line test from five to ten years. AirBnB properties are classified as residential land and therefore (most) the recent tax changes do affect AirBnB activity.  Under the definition of residential land, an Air BnB does not qualify as a commercial property as the land used is ...

GST Payment Date extended

GST payment date for 28 October has been extended to 4 November 2021 Taxpayers will have an extra week to file and pay GST and income tax currently due on October 28 this year. This is in response to Inland Revenue's systems shutting down for their final Business Transformation release from 3pm Thursday 21 October until the start of business on Thursday 28 October.See the IRD website for details click here...

NZ Government launched cryptocurrency inquiry to understand benefits and risks

An inquiry into the nature, impact and risk of cryptocurrencies has been announced by Parliament’s Finance and Expenditure Committee. It will look into the nature and benefits of cryptocurrencies as well as the risks to both users and Aotearoa as a whole. Tim was recently interviewed by Newshub for his thoughts on the announcement of the review. While this is probably the largest media exposure of cryptocurrency tax, the content of the article does not contain much information to hodlers.At th...

Cozy Corner Building - World Famous in Cambridge

Our premises in Cambridge are located in a building called The Cozy Corner that was built in the 1920's. Jane and Tim have breathed new life with the recent renovations that were completed in 2020.  Our local newspaper, the Cambridge News featured The Cozy Corner recently. The article was written in conjunction with the Cambridge Museum as part of a regular History of Cambridge column.  Check out the story about our Cozy Corner and her illustrious and sometimes saucy past.......

Covid-19 Resurgence Support Payment

The COVID-19 Resurgence Support Payment helps to cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.  To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.The maximum pay...

COVID 19 - Short Term Absence Payment

The COVID-19 Short-Term Absence Payment helps businesses keep paying employees who cannot work from home and: need to stay at home while waiting for a COVID-19 test result.need to stay home and look after a dependent child who has been asked to get a COVID-19 testlive with someone who has been at a location of interest and need to stay home while they wait for the person in the household to get a negative test result. Employees on a casual contract are also eligible for the payment. You can get ...

Covid-19 Wage Subsidy for Employers

The government has put together a wage subsidy package for employers that are affected. If your business cannot operate because of Alert Level 4 restrictions or you will lose revenue, you can apply for the COVID-19 Wage Subsidy scheme to help keep paying your staff and protect jobs. Businesses and self-employed people must expect a 40% drop in revenue to be eligible to receive the wage subsidy.  The wage subsidy is paid in a 2 week lump sum. You can get: $600 per week for each ful...

Government Loans - Small Business Cashflow Scheme

If you employ 50 or fewer staff, you may be able to apply for the Small Business Cashflow Loan Scheme. This is a one-off 5 year loan. You can borrow a maximum of $10,000 plus $1,800 per full-time-equivalent employee within your business. When applying for the loan, you need to be able to declare that your business is viable.Your business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month, compared with the same month last year. You can use the R...