Depreciation of Assets And You

Depreciation of Assets, And You

Depreciation is calculated annually over the useful life of the asset as part of your end-of-year accounts. To calculate the depreciation, you need to know the asset’s value, your depreciation method and the approved Inland Revenue depreciation rate. Depreciation is a method of spreading the cost over time of significant assets you buy for your…

Tax Shortfall Penalty Payment Rates

Tax Shortfall Penalty Payment Rates

New Zealand’s tax system follows self-assessments concepts. This means that it is the taxpayers responsibility to ensure that they are correctly calculating their tax, and have taken the reasonable care to do so. If a tax return has been lodged incorrectly or there are details missing from it that are needed, the taxpayer may not…

The New FBT Rates You Need To Know

The New FBT Rates You Need To Know

A new personal income tax rate is to come into effect on 1 April 2021, which increases the amount of gross income that the government deems subject to tax. This outcome will impact current Fringe Benefit Tax rates for all employers.  FBT rules have been designed and structured to ensure that any of these fringe…

Income equalisation schemes

Income equalisation schemes

An income equalisation scheme is offered to businesses in the farming, fishing, forestry, testing, construction, and mining industry. It operates as a method for businesses to even out income fluctuations by distributing their gross income from year to year.  A special account is created for businesses where they can pay their income and earn an…

Provisional tax options

Provisional tax options

Provisional tax helps manage income tax payment. Rather than paying a lump sum at the end of the year, you are able to make repayments throughout the year. There are 4 main options available to work out provisional tax: Standard Based on your previous year’s residual income tax (RIT) plus 5%. This is particularly useful…

What are tax codes

What are tax codes?

Tax codes assist your employer in calculating how much tax should be deducted from your pay, benefit or pension.  It is important to calculate your code and inform your employer as failing to inform them will result in getting tax at the non-declaration rate of 45%. You should also be updating your employer if your…

Paying taxes when self employed

Paying taxes when self-employed

Self-employed individuals have to carry out all aspects of their business on their own. This includes anyone who owns a small business, works as a sole trader, or provides contracting services. In most cases, individuals are able to start a business without setting up any legal provisions.  If you are self-employed, you can use your…

Types of individual expenses

Types of individual expenses

There are several sorts of expenses that can be claimed during the end of year tax return. These include:  The cost of an accountant or tax agent to file and complete tax returns. Cost of income protection insurance if the insurance payout would be taxable. Talk to your insurance provider about whether your income protection…

Deductions on home businesses

Deductions on home businesses

Self-employed individuals (contractors, sole traders, partnerships, or company owners) running a business from their home can claim the parts of their home used for business as an expense. Any space in your home that is primarily used for the purpose of running your business can be claimed. This may include certain rooms such as a…

Broader refundability of RD tax credits

Broader refundability of R&D tax credits

Businesses that have been impacted by COVID-19 may be finding it difficult to continue their research and development (R&D) plans on track. As part of the Government’s COVID-19 economic response, more businesses carrying out eligible R&D activities may be able to access a refund of their R&D tax credit with increased leniency. The R&D tax…

Taking advantage of the new building depreciation deduction claims

COVID-19 Impacts on the Airbnb Market

GST impact on Airbnb style rentals On the back of a booming tourism industry, the expansion of Airbnb throughout New Zealand in recent years has been prolific. The combination of being able to derive great returns while maintaining control and flexibility of your property has seen a boom of properties listed on Airbnb and similar…

COVID and tax for the self employed

COVID-19 and tax for the self-employed

As part of their COVID-19 response, the IRD has introduced a number of measures aimed at alleviating the financial pressure on those who are self-employed. Tailored tax rates and exemptionsSelf-employed workers who have had their income significantly affected by COVID-19 and no longer fit in their current withholding rate can apply for a tailored tax…

COVID tax relief for businesses

COVID-19 tax relief for businesses

The Inland Revenue will provide all New Zealand-based businesses struggling to pay their taxes due to COVID-19 with various forms of tax relief. Here’s a breakdown of the key relief strategies applicable to your business during these tough times. Penalties and interest write-off:Businesses unable to pay their taxes on time due to financial strain caused…

31 March Tax Planning Guide

31 March Tax Planning Guide

With 31 March approaching, now is the ideal time to consider tax issues and, where available, planning opportunities. Key matters are outlined below. □ Bad Debts To claim a tax deduction, the debt must be: o Bad; and o Physically written off on or before balance date. The above rules mean you must be able…