The end of the financial year has come around again and it’s time for the annual checklists to be completed, signed and returned.
Diane has now retired to spend more time with her grandchildren. If you used to talk to Diane, Heather, Phia or Janet will now be helping you. Of course, Rachel is always available!
New Income Tax Rate for Individuals from 1 April 2021
There is a new 39% personal income tax rate on income over $180,000
- A new Fringe Benefit Tax (FBT) rate of 63.93% for all-inclusive pay above $129,681
- A 39% Resident Withholding Tax (RWT) rate for individuals on interest income.
- An (ESCT) rate of 39% on superannuation contributions for employees whose ESCT rate threshold amount exceeds $216,000.
All but the RWT rate change will also apply from 1 April 2021. There is no change to PIE tax rates for individual investors or to RWT on dividends.
Both the company tax rate of 28% and the trust tax rate of 33% have not changed for now.
As all the banks are stopping issuing cheques, we have decided to introduce the BNZ Payclip into our office. This will enable us to take payment in the office using a debit or credit card. The Payclip will be heading to Amberley on Wednesdays for those clients who would prefer to pay at our Amberley office.
We will still accept cash up to $1,000 but no more than that, due to Anti-Money Laundering rules.
If you need to pay tax at Westpac, stop by the office to get a barcode to take with you.
Just a reminder that the minimum wage is moving to $20.00 per hour for employees that are 16 or over from the 1 April 2021.
Previously there has not been a requirement for Trusts to prepare financial accounts. This is no longer the case and from next year all Trusts will be required to comply unless they fall within one of the exceptions (such as a non-active trust that just holds the family home). The IRD are worried about people dodging the new top tax rate!
IRD Payday filing
From 1 April Inland Revenue will require all employers to use the new payday filing format, version 2. Version 2 provides more Employment Information and Employee Detail information than the current version 1. If you are using Xero Payroll or Smart Payroll this is automatically taken care of for you. Please call us if you unsure about this.
IRD Mileage Rates
From the 1 April 2020 the new mileage rate for Petrol, Diesel, Hybrid or Electric vehicles is 82c / KM up to 14,000 KM p.a.
Real Estate Agents
Inland Revenue have announced that they are taking a closer look at Real Estate Agents this year. They will focus on Logbooks and Expense claims!
Xero will be making multi-factor authentication mandatory. You will need to download the Google Authenticator App or Xero Verify app. If you have any problems with this, come into the office and we can help you with it.
Commercial Building Depreciation
Commercial buildings can claim depreciation again. From 1 April 2021 the following rates are available:
– 2% Diminishing Value
– 1.5% Straight line
Residential buildings are not part of these depreciation changes. This is because they depreciate at a much slower rate.
Low-value asset threshold for depreciation
For assets purchased on or after 17 March 2021, this threshold will be permanently increased to $1,000.
There is a fully funded business helpline service available for all businesses in New Zealand. In the South Island, the phone number is 0800 50 50 96.
COVID-19 Business Helpline
They can help you with:
- Advice on what various Alerts Levels mean for your business and your employer obligations.
- Advice to support you through human resource challenges, including changes to your staffing profile, employee wellness and helping you meet your Health and Safety obligations.
- Information around Government business support including digital enablement, employee support and funded or subsidies business advisory support.
- General business advice to support business continuity.
COVID-19 Subsidies available
The wage subsidy has reopened and is taking applications from employers and self-employed people who were affected by the rise in alert levels on 28 February 2021.
Resurgence Support Payment
The Resurgence Support Payment (RSP) is a payment to help support businesses due to a COVID-19 alert level increase to level 2 or higher. If your business or organisation is facing a reduction in revenue due to an alert level increase, you may be eligible for the RSP. The last day to apply is 12 April for the alert level increase of 28 February.
Short-Term Absence Payment
For businesses and self-employed workers, who need to miss work to stay at home while waiting on a COVID-19 test result, and cannot work from home. Parents and caregivers who need to miss work to support their dependents awaiting a test result are also eligible.
Leave Support Scheme
For employees and self-employed workers, who have been told to self-isolate, and cannot work from home. Parents and caregivers who need to miss work to support their dependents who have been told to self-isolate are also eligible.
Small Business Cashflow loans
Some changes were made to the Small Business Cashflow Loan scheme in November. If you qualified for the initial Covid Wage Subsidy, you should qualify for the Small Business Cashflow Loan.
- No interest will be charged if the loan is repaid within 2 years (previously 1 year)
- Restrictions on how the loan can be used have eased. As well as spending on core operating costs, businesses will be able to choose to use the loan to invest in their business, helping it to adapt to the impact of COVID-19.
- Applications for the loan can now be made until 31 December 2023, an extension of 3 years.
Loan Scheme details:
- It is for businesses with 50 or fewer full-time-equivalent employees.
- They must have been in business on 1 April 2020 and have experienced a 30% decline in revenue as a result of COVID-19 restrictions.
- The maximum amount that can be borrowed is $10,000 plus $1,800 per full-time-equivalent employee and only one amount can be drawn down.
- The loan period is for 5 years and interest rate is 3% from the date of the loan being provided.