IRD and tax free allowances

IRD are currently looking at tax free allowances paid to employees and whether they are actually tax free. To be a tax free allowance it has to be a reimbursement of an employment related expense, this can be actual cost or a reasonable estimate (however if it includes a portion above the employment related cost that part is taxable). There are also new rules and time limits to tax free allowances for accommodation, meals, clothing and relocation.

IRD are initially targeting the forestry sector and if that proves successful they are likely to extend their investigations. If  you pay your employees allowances now is a good time to revisit the tax status. If you get it wrong, the employer may need to pay backdated PAYE with added interest and the employee could end up with extra income affecting their Working for Families Tax Credits or Student Loan repayments.

How to promote your business using the internet

The ANZ offer a range of FREE workshops that are open to every business, ANZ customer or not.

The next workshop free business training workshop is designed to help you understand how you can best make use of the internet to grow your business

Today more people find products and services online than through traditional marketing media.

If you do not have an online presence, you may be missing out. To get the best return for your efforts it is critical to put a plan in place to ensure that any online marketing that you do, from having a website to a social media presence, will give you the best return on your investment.

This workshop will provide you with realistic insight to help you make the most of digital marketing.

DATE:        Thursday 2nd July 2015

TIME:        9.00am – 12 noon.  Meet for coffee 8.45am

VENUE:      Nelson Suburban Club, Tahunanui Dr, Nelson (Ken Ching Room)

Please RSVP by:

Email: georgie.kay@anz.com  Phone:03-5463407

ANZAC Day holiday pay

ANZAC Day this year is on Saturday 25th April and this is the first year ANZAC Day has fallen on a weekend since the observance of the day has been ‘Mondayised’.

This can be a bit complicated so here is a quick and hopefully easy to understand summary.

  1. If you are usually open on a Saturday you can’t trade before 1pm on Saturday 25th.
  2. If your staff normally work on a Saturday you will pay them for a Public Holiday on Saturday 25th. That means you pay a stat day if they do not work and time & half plus a lieu day if they do work, just like a normal public holiday.
  3. If your staff members don’t usually work on a Saturday but do work Monday then their public holiday will be on Monday 27th. That means you pay a stat day if they have the day off on Monday and time & half plus lieu day if they do work.
  4. If your staff members normally work both Saturday 25th and Monday 27th and you close on Saturday then they get a public holiday (Stat day) on Saturday and ordinary pay on Monday.
  5. If you normally open for business on Saturday and have Saturday as the public holiday but decide to close on Monday as well then staff who got Stat pay on Saturday get ordinary pay on Monday and staff who don’t normally work on Saturday will have Monday as their Stat day.

If you are totally confused you can call Neil at our office or talk to your employment adviser to discuss your personal situation.

 

 

Are you ready to GROW your business now for free?


Barbican Training Centre

Ready to take the next step in business?

This programme is designed for owners and managers of businesses that want to ramp up their business.

Are you Ready to grow your business now for FREE?

This FREE part-time 24 week programme gives you time to work “on your business”.

It’s designed for serious business owners and key staff who want to tackle the prickly stuff, with help from a one-on-one mentor to keep you on track.

»  Examine your business

»  Identify changes in your business

»  Implement and manage key projects of your choice

»  Get help from a one-on-one mentor to keep you on target

 Quick Facts:

Tutor :                                    Susan Piket – Chartered Global Management Accountant (CGMA), MBA (Henley)

Face to Face Mentor:          Anne Harvey – Member ICF and approved Coach and Mentor

Class:                                      Monday evenings at Barbican Training Centre

Cost:                                       No fees!

To register for a free information session on Monday 20th April at 6pm, please call Pip on  03-547 6138 or visit our website today.

If you have already registered, you don’t need to do anything more!  We look forward to seeing you on the 20th April.

Pip Bruce

Barbican Training Centre Limited

www.barbicantc.com

Visit us on Facebook

+64-3-547 6138

pip@barbicantc.com

Welcome aboard Flight BTC2015 … sit down, strap in and turn on everything you’ve got!

 

IRD refund changes

IRD have removed the option to request an income tax refund by cheque and they will now issue refunds by direct credit where they have a valid bank account number on file. If IRD do not have a valid bank account number the refund will be issued by cheque.

There are a couple of potential issues that clients need to be aware of, the first being in the case of an incorrect assessment. As the refund will reach your bank account at the same time as we receive the assessment from IRD, we won’t have time to stop an incorrect refund before it is direct credited. This means we would have to ask the client to make a payment of the refund amount back to IRD to return the funds and this will take time and therefore have a cost attached. Secondly, if your bank account details change but are not updated with IRD, the refund might be issued to a valid but not preferential bank account  (if the bank account has been closed IRD would be alerted to that fact). This could result in the funds sitting in an old bank account for some time, before your check the balance and notice the refund has been received.

 

 

Minimum Wage Increase

The adult minimum wage will increase from $14.25 to $14.75 an hour from 1 April 2015. The starting-out and training hourly minimum wages will increase by 40 cents to $11.80 an hour.

Mondayising Anzac & Waitangi Day

From Chapman Employment Relations:

This year Anzac Day falls on a Saturday. Do you know how to pay your staff regardless of whether they work on Saturday 25th or not? To understand your obligations around these public holidays read on.

From 1 January 2015 the public holiday for ANZAC Day and Waitangi Day will be “Mondayised” if they fall on a Saturday or Sunday.

This means, if Waitangi Day or ANZAC Day fall on a Saturday or Sunday:

For employees who would not otherwise work on that Saturday or Sunday, the public holiday must be treated as falling on the following Monday. The employee is then entitled to be paid for the Monday (as a Stat Day) at their normal rate.

For employees who would otherwise work on that Saturday or Sunday, the public holiday must be treated as falling on that day. The employee is then entitled to an alternative holiday (a day in lieu) in addition to being paid at least time and a half for the hours worked.

For the employee who is required to work on a public holiday, and that day would not normally be a working day, they are entitled to be paid at least time and a half for the hours worked.

In the situation where a public holiday has been transferred by agreement to another day, the employee is entitled to be paid at least time and a half, and be given a day in lieu if the employee is required to work on the agreed transfer date.

Working for Families 2016

If you receive weekly or fortnightly Working for Families payments and you or your spouse / partner have received business income (ie income other than wages and bank interest) you need to send IRD evidence of your business income for the 2015/16 year before 31 March 2015 or your payments will stop after this date. Your income evidence can be one of the following:

– 2014 income (only if you expect it to be similar in 2016). Contact IRD and ask them to use this information.

– 2015 year financial accounts (can only be done after 31 March ie end of financial year)

– 2016 budgeted accounts

If you need to provide budgeted accounts and find it a bit tricky, give us a call and we can prepare budgeted accounts for this purpose. We will use your latest annual accounts, ask you some questions about what has changed and incorporate those changes.

If you or your spouse or partner have stopped operating a business you need to call IRD so they can update their records.

You can contact IRD by phone 0800 227 773, through your myIR secure mail or post to Inland Revenue, PO Box 39090, Wellington Mail Centre, Lower Hutt 5040.

If you do not get the information to IRD in time and they stop your payments, you need to ask them to re-start your payments when you send them the information required.

Child Support Changes

Child support laws will change from 1 April 2015 and if you’re paying or receiving child support you should have received your new assessment or entitlement by now.

The formula that IRD uses to calculate child support now takes into account both parents income which in theory is a good thing, however the way it is calculated and apportioned has meant many child support assessments come with an unexpected significant increase.

The formula now takes into account shared care when it is 28% (102 nights a year) and over however you must provide a minimum of 35% (128 nights a year) care to receive child support payments.

The living allowance has also changed and from 1 April 2015 no longer include an amount for new partners. However, if others do rely on your financial support, for example a new partner and their children,  you can apply to IRD to have your living allowance reviewed.

It is worth checking that the income  and shared care IRD has based your assessment on is correct. If your income has dropped by more than 15% from the amount you were assessed on, you can now estimate your income and IRD will reassess your payments.

If your child support changes from 1 April 2015 it may also affect your Working for Families entitlement.

To sum it up the results are quite different from how IRD portrayed it, and whilst we can’t change the formula we recommend you check that the information included in your assessment is correct.

IRD Compliance Focus for 2014-15

Inland Revenue tell us they want to make tax simpler, more open and more certain for everyone.

One way they do that is by sharing their compliance focus, so that it’s clear for everyone the key areas they’re looking at and key things people need to do to get their tax and entitlements right.

Now’s the time to share the Compliance Focus booklet and help you understand what you need to do to get your taxes right and avoid penalties and interest.

At Savage & Savage we put a strong focus on ensuring your accounts comply with tax regulations and while some of the things we ask you for may seem irrelevant we need ALL of your financial information to help you stay on the right side of the tax man.

You can download the latest IRD Compliance Focus booklet here for full details.

In summary here are some (but not all)  key compliance points IRD will be focusing on in 2014-15 (extracts from IRD Compliance Focus Booklet 2014-15)

Paying your tax on time

Whether we’re talking tax, student loans or child support—most people pay on time. Most people also file on time. We know that when it comes to tax, if a customer doesn’t file a return on time, they may also struggle to pay the tax they owe on time. In all cases, paying what you owe by the due date means avoiding penalties and interest. That’s why we work hard to make it as easy as possible for you to file and pay on time and contact us quickly if you miss a due date.

People with high wealth or high income

People who have significant assets or high income often have complex tax affairs. Like everyone else, most people with high wealth pay the right amount of tax at the right time, but sometimes people make mistakes and don’t get their taxes quite right. We have a dedicated team that helps these customers get back on track.

The property business

Whether you’re buying or selling property for profit, renting out a property you own or having boarders stay in your family home, it pays to know the rules. That way you won’t end up with an unexpected tax bill to pay.

Trusts

People can choose to use trusts in their personal or business affairs. If you set up, manage, or receive income from a trust, make sure you understand and meet your tax responsibilities. Otherwise, you might face penalties or end up with an unexpected tax bill.

It’s not worth the risk

We know that sometimes people make honest mistakes with their tax or entitlements. When this happens, we’re here to help them get back on track. It’s rare, but sometimes people try to avoid paying the tax they owe or get more entitlements than they should. We’re always working to improve our systems and processes, so that we can spot when this happens and take action. For people who don’t do what they’re meant to, the consequences can be serious. They could end up in prison or with substantial financial penalties. It’s just not worth the risk.

Fraud and identity theft

It’s infrequent, but people sometimes: • create fake documents or identities or intentionally provide incorrect information to pay less tax or get money from us—and that’s fraud • use another person’s IRD number to get money from us—and that’s identity theft, which is a form of fraud.

Under-reporting income and operating outside the system

Most people report their income correctly and pay the right amount of tax. But a small number intentionally underreport their income and pay less tax than they should.

This means:

• some businesses may get an unfair competitive advantage over other businesses that pay the right amount of tax

• government has less to spend on services that make New Zealand a great place to live, like schools and hospitals

Aggressive tax planning

A small number of people try to avoid paying the tax they should or boost entitlements to social benefits by using inappropriate or unlawful tax structures. We call this aggressive tax planning (ATP)