Provisional tax improvements

New legislation enacted in February substantially simplifies obligations under the provisional tax regime. Most taxpayers pay their provisional tax at three times through the course of their financial year, being the 28th day of the 5th, 9th and 13th months after their balance date. The ‘standard uplift’ method determines a person’s liability based on a prior year’s tax payable (105% for last year, or 110% for previous). The problem is…  Read more

Parties, Christmas and Tax

It’s that time of year again when it pays to review the entertainment rules over the Christmas season. Let’s look at the tax treatment of saying thanks to customers and staff typically with gifts, wining and dining. 50% deductible entertainment expenses Inland Revenue’s IR268 guide gives the following examples of where entertainment expenses are 50% deductible: Taking customers, suppliers and business associates out for dinner or putting on a function for…  Read more

FAQs on company structure and minimising tax

So you’re setting up a new business or thinking about changing the way your existing business is structured… do you go for the added protection that a limited liability company provides, or do you keep things simple and operate as a sole trader or partnership with fewer tax compliance obligations? Tax expert John Shewan, formerly of Price Waterhouse Cooper, gives advice on structuring your business to minimise tax and meet…  Read more

Accounting Hub Summer 2013/2014 Newsletter

Risk and Reward Mixed Use Assets – taking note If you own a holiday home and rent this out commercially, there are new rules around how tax deductions are calculated. In order to accurately work out what these will be, there are some crucial points that we will require from you. You will still need to keep your normal records for income and expenses, but as well as that you…  Read more

Christmas Parties, Entertainment and Tax

Believe it or not, Christmas is just around the corner already, which will leave many of you thinking about how best to reward staff. It may also have crossed your mind to consider how much of the expenditure that you will make will be tax deductible. Generally, if you provide entertainment for your team, clients or any other business contact, some of your business entertainment expenses are tax deductible. Below…  Read more

Home Office Expenses

A common question that we get asked, is “what portion of my home expenses am I able to claim for tax purposes?” Where a self-employed taxpayer uses his or her home partly in furtherance of the conduct of a business, he or she is entitled to a partial deduction for the outgoings which relate to the use of the home for the work related activities. These include: – Heating –…  Read more

Standard mileage rate increases

The IRD standard mileage rate for motor vehicles is now 77 cents per km. This rate applies to the 2012 income year. The standard mileage rate may not be acceptable where an employee’s business travel exceeds 5,000km. The reimbursement should be based on actual expenditure or a reasonable estimate of the expenditure likely to be incurred by the employee. One way to claim in Xero is to enter the mileage…  Read more

To LTC or not to LTC, that is the question?

Owning a rental property has become topical again with the recent positive movement in the Auckland residential property market. Besides the question of which property to buy and where (and ignoring the difficulties of increasingly crowded auction rooms), many property investors will be wondering which legal structure to use for their investment. Loss Attributing Qualifying Companies (LAQCs) were popular in the past. That popularity contributed towards some negative media coverage…  Read more

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