Covid 19 Support for Businesses

Covid 19 Support for Businesses

Find out what Covid 19 Support for Businesses is available in August 2021

Full details can be found here on the covid19.govt.nz website but we will summarise some key information for you regarding the Wage Subsidy and Resurgence Payment below.

If you need our help, get in touch!

Wage Subsidy

Wage subsidies are available for all businesses and self-employed people who have or predict at least a 40% decline in their revenue from 31 August to 13 September.

Applications are to be made to Work and Income note however, they are currently experiencing some delays.

If you applied for the wage subsidy in the initial two week period in August, you can also apply for the second wage subsidy relating to the period 31 August to 13 September however you must meet eligibility criteria.

The Wage Subsidy Scheme

If your business cannot operate due to level 4 restrictions or you will lose revenue, you can apply for the Wage Subsidy which is designed to help keep paying your staff and protect jobs.

Businesses and self-employed people must expect a 40% drop in revenue to be eligible to receive the wage subsidy.

The wage subsidy is paid in a 2 week lump sum. You can get:

  • $600 per week for each full-time employee
  • $359 per week for each part-time employee

As an employer you must pass on the full wage subsidy to your employee. If the wage subsidy is more than your employee’s pay, you can continue to pay them at their normal rate.

If your business has to physically close but your employees can work from home, and you are not eligible for the Wage Subsidy Scheme, you need to keep paying them their usual salary or wages.

You cannot get the Wage Subsidy August 2021, Leave Support Scheme and Short-Term Absence Payment for the same employee at the same time.

Applications for the August 2021 Wage Subsidy are now open. You need to apply through Work and Income.

Find out if you are eligible for the Wage Subsidy and how to apply

COVID-19 Resurgence Support Payment

The COVID-19 Resurgence Support Payment helps to cover wages and fixed costs for businesses who have been directly affected when there is an increase to Alert Level 2 or higher for a week or more.

To be eligible, your business must have experienced at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to an increase in Alert Levels.

You can receive $1,500 per business plus $400 per full-time employee (FTE), up to 50 FTE.

The maximum payment is $21,500.

If you’re a sole trader, you can receive a payment of up to $1,900.

Applications for the COVID-19 Resurgence Support Payment are now open. You need to apply through Inland Revenue. Businesses anywhere in New Zealand can apply if they meet the eligibility criteria.

You can apply for both the COVID-19 Resurgence Support Payment and the COVID-19 Wage Subsidy Scheme if you meet all the eligible criteria.

Find out more information about the COVID-19 Resurgence Support Payment and how to apply

 

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Donation receipts for Inland Revenue

Donation Receipts for Inland Revenue

Have you been feeling generous and making donations to registered NZ charities?

You can claim the tax back on these donations after the financial year end but you will need to provide valid receipts.

Did you know you can upload your Donation receipts for Inland Revenue via your personal MyIR login throughout the year?

You don’t need to wait until after year end to do this.

The receipts can be electronic copies or scans or photocopies of paper receipts.

Make sure the receipts are valid!  See below for a description of what constitutes a valid receipt.

The Donation Receipts need to contain the following information:

  • Donor Name or the name of the donor’s spouse or partner
  • Date of the donation
  • Dollar value of the donation
  • The receipt must state that it is a Donation
  • The name of the organisation you donated to
  • The receipt but contain the official stamp or be on letterhead of the organisation

If you’d like more information or would like to speak to an accountant about minimising your tax obligations, please get in touch via our website or give us a call on 09 273 7377. We’d love to hear from you.

 

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Ways to pay Inland Revenue

Ways to Pay Inland Revenue

Inland Revenue will no longer accept cheques from 1st March 2020

Of course they’ll still want you to pay them, so what options do you have for sending money to the IRD?

My IR

When filing your returns online, you are given an option at the end of the process to pay a number of different ways.
For example: Direct debit, debit card, and credit card payments.
You can register for MyIR via the Inland Revenue website.

Online Banking

Your bank will have an option to make payments to the IRD whilst you are logged into your banking software.
If you are unsure as to where this is located, you will need to contact your bank directly for more information.

Credit or Debit card

You can visit the IRD website and choose the Pay option to pay online.

Westpac

You can make payments to the IRD by visiting a Westpac branch and paying by Eftosor Smart ATM

Paying from Overseas

You can pay from overseas by using a money transfer service.

*Please note that charges may apply for some of the above options.

For more information on payment services, visit the IRD website.

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Migrant Tax Issues

Migrant Tax Issues

Migrant tax issues are a complex area of tax legislation, but we can help you to understand and meet your obligations.

Here are a few key points you should be aware of…

The New Zealand tax system imposes taxation on the basis of the tax residence of a person and the sources of income they earn.

These two concepts are key in determining a migrant’s income tax liability.

In addition, migrants may face a number of more complex tax issues including; superannuation, trusts settled offshore and foreign investments such as shares and rental properties.

Whether you’re new to NZ or been here a while its important to ensure you are meeting your obligations.  We are able to provide advice and assistance in this area and would love to help.

Contact us now to make an appointment. Your first appointment is free!

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Research and Development Tax Incentive

If you spend money on research and development, you may be eligible to claim a 15% R&D tax credit.

What exactly is the Research and Development Tax incentive?

The Research and Development Tax Incentive has been put in place to help grow NZ’s investment in R&D.  It’s available for the 2019-2020 tax year and is already in effect for many NZ businesses.

It provides a tax credit at a rate of 15% of eligible R&D spend up to $120 million.

Further eligibility criteria requires that you spend a least $50,000 per year on eligible R&D. If you spend under $50,000 you may still be eligible if you use an approved research provider. Click here to see approved provider list.

Eligible activities must:

be carried out with the express purpose of acquiring new knowledge, or to create a new or improved process, service or good,

aim to resolve a scientific or technological uncertainty, and

use a systematic approach.

If you would like to discuss your situation further to explore eligibility, get in touch and make an appointment to come in and see us.

 

 

 

 

 

100% deductible entertainment expenses

100% Deductible Entertainment Expenses

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Gifts of Food and Drink

Gifts of Food and Drink

Gifts of Food and Drink

Do you give your clients gifts including Food and Drink?

Did you know that these types of gifts are only 50% deductible?

As per the IRD, gifts of food and drink that will provide a private benefit to the recipient and a business benefit to the taxpayer are only 50% deductible.

Example:

A web design company sends a goody box of cakes and biscuits to their client each time a website goes live. They are only permitted to deduct 50% of the cost of the goody box as it is provided away from their premises in the form of food.

If they were to provide a gift containing mixed items such as candles and hand soap, the cost of these items are fully deductible but the food portion is still only 50% deductible.

As qualified accountants, we can advise and help you determine the correct treatment of your expenses. You can contact us or visit the IRD website for further information.

 

 

 

 

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Entertainment Tax

What can you claim under the Entertainment Tax Rules, and it is 50% deductible or 100% deductible?

 

Confused? You’re not alone

There’s lots of small print when it comes to deducting entertainment expenses which can sometimes make it difficult to determine whether something is 50% or 100% deductible.

First you must determine if the expense is business or private. If the expense is incurred as part of your efforts to make your business to earn income, then it is a business expense. If not, it’s private and therefore not deductible.

  • Entertainment tax expenditure is only 50% deductible when it falls under the following categories:
  • Corporate boxes
  • Holiday accommodation
  • Pleasure craft
  • Food and beverages – however there are specific occasions when food and beverage are 100% deductible for example, light refreshments, like morning and afternoon teas provided at work. Christmas parties onsite and offsite are only 50% deductible.

As qualified accountants, we can advise on specific circumstances and help you determine the correct treatment of your entertainment expenses. You can contact us or visit the IRD website for further information.

 

 

 

 

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IRD Kilometre Rates

IRD Kilometre Rates have recently been updated.

 

Kilometre rates for business use of vehicles 2018-2019 income year.

  • Vehicle Type
  • Petrol or Diesel
  • Petrol Hybrid
  • Electric
  • Tier One Rate
  • 79 cents
  • 79 cents
  • 79 cents
  • Tier Two Rate
  • 30 cents
  • 19 cents
  • 9 cents

Tier one rates should be used for the business portion of the first 14,000 km’s travelled by the vehicle in a year.

Tier two rates are to be used for the business portion of any business travel in excess of 14,000 km’s.

Kilometre rates must be used in conjunction with a log book which must be kept for a period of 3 months, every 3 years.

**For full details on claiming vehicle expenses using kilometre rates, please see the IRD website

 

 

 

 

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Am I a NZ Tax Resident?

Am I a NZ Tax Resident?

Determining your tax residency status for NZ involves two tests:

  • Days present in New Zealand test
  • Permanent place of abode test

If you are a New Zealand Tax Resident, you will need to pay tax in New Zealand.

*Please note that tax residency is not the same as residency when referred to with regards to immigration.

Days Present in New Zealand Test

  • This is simple and straight forward; If you spend over 183 days in New Zealand during any twelve month period, you are deemed to be a tax resident.
  • The 183 days do not have to be consecutive, and they do not have to be in the same financial year.
  • If you can choose any two dates a year apart, and count more than 183 days between them when you were present in New Zealand, you will be deemed to become a tax resident from the first of those days.
  • A part day counts as a full day, so the day of arrival and the day of departure are included.

In addition to the Days Present rule, there is the Days Absent rule.

Being present for 183 days in a 12 month period means you are a tax resident however, if you then stay out of New Zealand for more than 325 days (days need not be consecutive) in a 12 month period, you can terminate your tax residency.

If this circumstance applies, you will be a non-resident from the first of those 325 days.

You will also be deemed a tax resident if you have a permanent place of abode in New Zealand, regardless of whether or not you breach the days present test.

Tax laws can get rather complicated and contain many grey areas. To ensure you stay on top of your obligations, we recommend you consult us if you are unsure. Phone us on 09 273 7377