Tax Changes

Tax Changes

The Business Continuity Package to assist businesses struggling due to the impact of the COVID-19 outbreak includes 5 proposals related to tax:
• Increase in the low-value asset write-off threshold: The low-value threshold has been raised to allow the immediate expensing of assets that cost less than $5,000 in the 2020-2021 income year. There will be a temporary increase for assets purchased in the 12 months from 17 March 2020. After 17 March 2021 the threshold will be $1,000.
• Increase in the provisional tax threshold: he provisional tax threshold has been increased from $2,500 to $5,000 from the 2020/2021 income year. While provisional tax may not be payable throughout the year, taxpayers will need to be mindful of a higher terminal tax cost on 7 April 2022.
• Use of money interest remission: The package allows Inland Revenue the discretion to remit use-of-money interest (UOMI) on late payment if the taxpayer’s ability to make the payment on time was significantly adversely affected by COVID-19.
• Depreciation on non-residential buildings: From the 2020/2021 income year onwards, depreciation is permitted on commercial and industrial buildings. The depreciation rate is 2% declining value or 1.5% straight line. This applies to existing and newly acquired buildings and to capital improvements made to existing buildings.
• Removal of hours test from the In-Work Tax Credit: The hours test eligibility requirement for the in-work tax credit (IWTC) is removed from 1 July 2020

Sunday, 10th January 2021

"As a real estate salesperson operating in Hamilton, I have found it vital to have a great accountant. Not content with selling just the occasional property, I have been single-minded about operating an efficient, healthy and growing business. This has meant performing at high levels while providing outstanding service to every client. To help me achieve this, I have invested in building a team of support staff, which currently consists of two staff members in selling roles and one in administration. We see DB Chartered Accountants as an integral part of our team as they are a “one stop shop” looking after all the book-keeping aspects of the business.

DB Chartered Accountants take care of all my tax and reporting requirements, from GST, KiwiSaver contributions and PAYE to end of year books and taxation advice. A lot of my business growth now revolves around time management. By working with DB Chartered Accountants my time input into the accounting side of the business is now negligible, leaving me free to work on my core business rather than be bogged down by the “red tape” aspects.

Pam from DB Chartered Accountants has looked after my accounts for several years now. Previously I had been through three other accountants in the space of two years. I was disappointed by the level of service provided by these firms and after missing deadlines for payments to IRD and dealing with the ensuing penalties, as well as being charged over-zealous fees, I felt very uneasy that nobody was overseeing my needs. I needed better assistance. After leaving the last of these firms, I was referred to what is now DB Chartered Accountants as they were trustworthy and reliable. This could not have been more accurate.

Fortunately my previous experiences are behind me and I now get a courteous reminder from Pam when a deadline is looming and action is required – and I no longer fear unjustified bills arriving in the letter box from my accountant. I enjoy working with the firm and am known by name by most of the staff which gives me confidence that I am being properly looked after. I appreciate being able to pick up the phone and call when I have questions. I would recommend working with DB Chartered Accountants without hesitation."

Vaughan Heslop,
Lodge Real Estate MREINZ
REINZ Top 10 Regional Salesperson Award Winner
Waikato/Bay of Plenty/Taupo Districts
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