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21st March 2013 

In this issue:
- As we come to an end of another tax year
- Tax Changes
- Tax relief - extreme weather
- Additional reading

As we come to the end of another tax year:
As we head towards the End of the Financial Year (EOFY), our thoughts will turn to 'tax time' matters. If you're like a lot of people, you probably won't start reviewing your finances until after 31 March, potentially missing opportunities to reduce your tax while building your wealth. The best time to prepare for the end-of-year is now. Here are some tax effective strategies that are suitable for a wide range of people and incomes:
  • Imputation credits will only be able to be attached at 30% if dividends are paid by 31 March 2013. After that date they can only be attached at 28%. For a dividend to be paid by the end of the income year, you need to pass appropriate resolutions prior to year end.  RWT, if applicable, will be due 20th of the month following. Clients who are affected by this will receive notification soon.
  • Collect all donation certificates, or request copies where required.
  • Load down questionnaires to ensure that you have all the required information to complete your accounts speedily. Questionnaires can be found Click here
  • Make sure you keep full records of any debts that look like they are going bad, including a record of the steps taken before write off. To be tax deductible bad debts must be written off before the year end balance date.
  • Any sum owing to employees at balance date; including holiday pay, redundancy payments, long service leave or bonus payments, are deductible in the current year only if they are paid out within 63 days of balance date. A delay in payment of a few days beyond this can have a big impact on your current year tax liability.

Tax Changes
:

1 April 2013

Working for Families

The net income level guaranteed by the minimum family tax credit will rise from $22,568 to $22,724.

ACC

The government announced that the 2013/2014 levy rates will remain at their current levels.  However they have introduced three new initiatives:

 

  • Extended Workplace Safety Discounts
  • Vehicle Classification System
  • Fleet Safety Incentive Programme

We will be following up on these changes in future, but in the meantime, visit the following website for more information:

www.acc.co.nz/news/WPC116639

KiwiSaver

The minimum contribution rate for employers and employees will rise to 3% from 1 April 2013.

Primary and Secondary School Children

From 1 April 2013 PAYE must be deducted from payments of salary/wages or schedular payments to school children.

Student loan changes

The repayment rate for student loan deductions increases from 10 to 12 cents per dollar earned over the current threshold of $19,084 per annum.

Tax relief - extreme weather

Tax relief and income assistance is available to people affected by extreme weather, eg droughts. The IRD has a range of measures to help depending on your personal circumstances and the particular event.

We understand that tax isn't the first thing on your mind. But please contact us with any concerns or questions about tax or income levels, so we can make arrangements with the IRD to help.

Income equalisation scheme

Farmers who have money deposited in this scheme may be able to make an early withdrawal, or deposit funds from forced sale of livestock.

Late election of provisional tax estimates

You may be able to make a late estimate or re-estimate of provisional tax, if your circumstances have changed due to extreme weather. Let the team at Craig Periam Limited help re-estimate your provisional tax. We can arrange early refunds if provisional tax has been overpaid.

 

Additional Reading:

Latest Wilco Newsletter:

  • Creating a sustainable company culture
  • Changes to rates and thresholds
  • Changes to tax treatments of commercial lease payments
  • New rules for mixed use assets
  • Residential care subsidy under spotlight

For more reading click here


Craig and the team