New Business Tax Proposals

Is close enough good enough?

The Government has today announced a package of proposals to simplify business tax and reduce compliance costs especially for small businesses which make up approximately 97% of all businesses in New Zealand.

The changes are to be fast-tracked with legislation expected to be introduced in August this year.

While the proposals will not suit all taxpayers, some of the taxpayer friendly proposals include:

• Removing use of money interest for the first two provisional tax installments for all taxpayers who use the standard uplift option, as long as the payments required under that option are made.
• Allowing contractors to elect their own withholding tax rate to more accurately reflect the tax payable on income earned and reduce the impact of provisional tax.
• Removal of the incremental late payment penalty for certain tax debt (i.e. GST, income tax and working for families tax credits) incurred after the rules come into effect.
• Various measures designed to make tax easier to comply with and reduce compliance costs such as:
  • Allowing small companies providing motor vehicles to shareholder-employees to make private use adjustments instead of paying fringe benefit tax
  • Increasing the threshold for taxpayers to correct errors in returns from $500 to $1,000
  • Removing the requirement to renew resident withholding tax exemption certificates annually
  • Increasing the threshold for annual fringe benefit tax returns from $500,000 to $1m of PAYE/ESCT

• Extending withholding tax to cover contractors working for labour-hire firms
• Allowing the credit reporting of significant tax debts to credit reporting agencies to provide greater transparency for other businesses
• Information sharing with the Registrar of Companies to assist with compliance with company laws to protect other businesses

Talia Smith - Your Xero/MYOB Consultant

Call Talia on 06 835 3385 to talk about how gardiner reaney can help make 2016 your businesses best year yet.

Changes to Paid Parental Leave and Child Support

The Government announced changes to parental leave provisions that came into effect on 1 April 2016. These include:

• The parental leave payment period extended to 18 weeks for a child that is born, expected to be born, or you assume primary care of a child under six years of age on or after 1 April 2016.
• The parental leave payment extended to non-standard workers (such as casual, seasonal, and employees with more than one employer) and those who have recently changed jobs in addition to other employees and self-employed people.
• Entitlements extended to cover all permanent arrangements where the applicant has primary responsibility for the care, development, and upbringing of child under 6 years, including adoption, Home for Life parents, whāngai, grandparents etc from 1 April 2016.
• Paid keeping-in-touch days available for employees on parental leave, by agreement between the employer and employee, from 1 April 2016
• The parental tax credit increased to $220 a week, and the payment period was extended from eight weeks to 10 weeks from 1 April 2015.
• The maximum weekly amount of parental leave payments increased from 1 July 2015
• Additional parental leave payments of up to 13 weeks, are available if a baby is born prematurely before 37 weeks.
• Some terms associated with parental leave have changed, maternity leave has been replaced by primary carer leave, paternity/ partner’s leave has been replaced by partner’s leave.

Click here to view the article

Change to the child support qualifying age

From 1 April 2016, the qualifying age for children to be included in a child support assessment is under 18 unless the child is aged 18 and enrolled at and attending a school. This change applies to children you receive or pay child support for and children you’ve named as dependents.

A school is defined as:

• a registered school, as defined in the Education Act 1989, or
• an overseas school.
• Before a child’s 18th birthday we’ll send you a letter, or email if you’re registered with myIR, asking about the child’s plans.

Additional changes include Penalty rate decrease and debt write-off changes. Click here for more information.

We wish to congratulate Rachael on the “early” arrival of her son, Louie James, on the 13th April 2016. Wishing the Kroot family all the best!

GRL would like to welcome Anna Mahy to our team!

Anna is an experienced Accountant who will be managing the majority of Rachael’s clients, in her absence. Anna has a keen interest in information systems and Investments.

7th May 2016

The third and final instalment for provisional tax for the 2016 income tax year for clients with a standard balance date is due. Any provisional tax estimations for 2016 must be received by this date. Student loan interim payments are also due.