Accounting Hub Newsletter Spring 2013
Scheme swapping across the ditch
The Australian government recently announced that they have made changes to legislation that will allow New Zealanders to transfer their retirement savings from KiwiSaver into a compatible Australian scheme and vice versa.
This legislation is the result of an arrangement between the New Zealand and Australian governments and removes an obstacle between the two countries, providing the ability for people to take advantage of employment opportunities in either country, while still continuing to contribute to a retirement scheme.
Australia’s ruling is that it is compulsory for employees to be involved in a superannuation scheme. This means that previously, any Kiwis working in Australia who were contributing during the time of their employment had to leave that money in Australia when and if they returned to New Zealand.
The Australian Tax Office recently estimated that it is holding NZ$21 billion in lost accounts, which has been put down to contributing Kiwis who have returned home and had to leave their contributions behind as a result. The new scheme will mean that this money can be transferred from the Australian scheme, to their scheme provider here in New Zealand.
The transferring of funds will not incur any entry or exit taxes but the downside is that Kiwis will not be able to use their Australian superannuation fund towards a new home. However any interest earned on the account may be used to do so.
The Australian scheme will have to comply with KiwiSaver in order for the transfer to be made as not all schemes are compatible.
If you have contributed to an Australian superannuation scheme in Australia and want access to your funds, visit www. kiwisaver.govt.nz
Changes to online tax returns
The IRD have made changes to the way you file your GST returns.
In September last year the IRD introduced the eGST filing service. Now the decision has been made to remove the ability for the public to access the standard online form, meaning customers will need to change their filing methods and register to file their returns through MyIR.
The IRD will have sent a letter to all clients in July notifying them of the change. In addition to this a new GST email service has been established to alert customers registered with MyIR that their GST return is available, three days before it’s due.
For more information on the changes to online GST returns, visit www.ird.govt.nz
Renting your beach house out?
As previously signalled in the media, new rules on claiming expenses for mixed-used assets such as holiday homes (assets being used both privately and for earning income) have been passed in to law.
Previously expenses have been subject to a private to business ratio (including when the asset was available for use even if it wasn’t being used). The new rules restrict the deductibility of this expenditure by limiting the expenditure allowed for the period that the asset is available for use and not used.
Even though these rules have just been enacted, they actually apply from 1 April 2013. If you own any assets such as a holiday bach or a boat and rent these out during the year, please come and talk to us. The government has publicly stated they are expecting an extra $50m in revenue from these new rules, so they will be enforced.
Changes to parental leave and the minimum wage
On 1 July 2013, the rate for Parental Leave and Employment Protection increased. The change has been made in line with the alteration to the average weekly wage.
The maximum amount available to eligible employees and the self-employed increased from $475.16 to $488.17 gross a week.
The minimum parental leave payment for self-employed persons increased from $135 to $137.50 gross a week.
Each rate is calculated based on the employee’s average weekly earnings and those eligible for the scheme are entitled to 14 weeks.
Invest in your business – invest in your staff
Your staff can often be one of the most valuable assets in your business. By investing in training, and taking the time to develop their skills, you will find that they not only feel valued as team members but it can also improve know how and the ability to adapt in unknown or new situations.
Although up-skilling is not always a low cost solution, it’s important that it’s viewed as an investment in your business. Some of the benefits to up-skilling include:
- Staff retention – employees who are given ongoing training feel valued and tend to remain loyal
- Improved quality and productivity – providing staff with the skills to deal with more challenging and potentially unexpected tasks
- The flow on effect – motivated employees have a more positive attitude and this can influence other members within your team
Staying competitive – with a great team behind you, you have the potential to become the best in your market.
There are many organisations now providing staff training programs throughout New Zealand. Before embarking on a training initiative, do your research. Ask yourself what you think would benefit your team and start from there. Take the time to invest in your staff and you will not be disappointed.
New mixed-use assets rule, lease payments and other measures now law
Tax rules on lease inducement payments and surrender payments now law
A recent change in legislation introduced new rules on the tax treatment of lease inducement payments and surrender payments. From 1 April 2013, such payments are deductible for the payer and taxable for the recipient and are subject to spreading rules.
If you are negotiating or renewing commercial leases, we recommend talking to us to ensure any tax considerations are correctly taken into account.