Currently before Parliament is legislation that will alter the laws surrounding Loss Attributing Qualifying Companies (LAQC’s). When this law passes it will come into effect from 1st April 2011.

Basically the proposed law means that LAQC’s will be gone. In their place will be “look through” companies. While you will still be able to distribute losses to the shareholders, the big change is that if the company makes a profit, these too have to be distributed to shareholders (and therefore are subjected to Individual Tax Rates). Previously, these profits have often been kept in the company and were subject to Company Tax Rates.
Grace Team is anticipating that this law will pass, and we are currently going through the process of assessing each LAQC and seeing whether they should move to an “LT’ company or go back to a normal “closed” company. There may be other options available however there will be costs involved so it is imperative that a full review of your LAQC is undertaken – you can not sit on the fence!

If you have an LAQC we will be contacting you in the new year (late February) with more information in regard to your specific situation.

If there is no monetary value on a return, the IRD have asked that you don't fill in zeros, write NIL, or put lines through a key point. Just leave blank, and sign and date where required.

Apparently these things cause imaging problems and delays the IRD processing them.
However:
If there are figures, it is important to complete the cents or put .00 after the decimal point.
Do not leave blank or put a line as the imager will only read the figures that are present.
e.g. $230. - will be read as $2.30.

15th January – GST (Oct/Nov Return) and 2nd Provisional Tax Payment Due
Grace Team is planning to send out tax notices by mid-December. If you have not received one, and are expecting to pay tax, please contact Alice at our office.

If you are having any problems with your GST return, and need some guidance in regard to the new 15%, please contact us at Grace Team – remember we are here to help!

We have been advised that a new phishing scam is currently in circulation. We have had three clients who have received the following email – supposedly from the IRD. The email states:

After the last annual calculations of your fiscal activity, we have determined that you are eligible to receive a tax refund of 988.50 NZ Dollars. Please submit the tax refund request and allow us 3-5 days in order to process it.
Click Refund Me Now to submit your tax refund request.
Note: A refund can be delayed a variety of reasons, for example submitting invalid records or applying after deadline.
Best Regards
Inland Revenue - Te Tari Taake

The link directs the customer to a fake IRD webpage which also provides links to a number of key banking facilities. The objective is to encourage visitors to log into the log on screen when they click on the logo of their bank. Anyone entering these details can have their personal banking identity stolen.

If you receive this email, please DO NOT follow the link or enter any personal information onto the site. You may forward examples directly to phishing@ird.govt.nz. Please take care.

Personal tax rates change from 1 October. Please ensure you have updated your payroll software or have the new PAYE deduction books.

You can now use a credit card or debit card to make online tax payments. But be aware a 1.42% "convenience fee" is charged by the bank on any payments made this way.

If you file your PAYE monthly schedule (IR348) and make payments online, the IRD will no longer issue you with a paper copy of the IR345 (Payment portion). This can be completed online after the EMS has been sent and it will be pre-populated making it quick and easy to complete.
Go to "Secure online services" and "Demonstrations," this will give you a Demo on how to get started.
NOTE: If you file the IR348 online but still make payments by cheque you will still continue to receive the paper based IR345.

First instalment for the 2011 Tax Year for anyone with a 31 March Balance date is 28th August 2010.

If YES – and you have any of the following sources of income you are required to file an income tax return:
– self-employment
– partnership or trust income
– rental income
– overseas income
– receive scheduler payments (previously Withholding Income)
It is important to file a return so that IRD can assess your student loan correctly.

If you are planning on going overseas for longer than 6 months (184 days or more) and have a student loan you need to let IRD know. This may affect your student loan and eligibility for interest free. To receive regular updates about student loan information you can subscribe at www.ird.govt.nz/sl/notify-me/

When making payments to IRD electronically be aware that the Year Field will always default to the most current year (i.e. Currently 2011). You will need to change this year if making payments for any other year otherwise your payment will not be processed correctly at IRD and may be delayed.
If you are making a combined payment for GST & Provisional tax when filing your GST 103 Return please ensure that you use the payment type GAP. Not GST. This will ensure that your payment is split correctly between Income tax and GST.

TERMINAL TAX – 7TH APRIL 2010
We have sent most of these notices out now, however if you think you should be paying tax, and haven’t received notification, please give us a call.

PROVISIONAL TAX – 7TH MAY 2010
Third instalment of provisional tax.

Please note that from the 1st April 2010 the ACC earners’ levy will increase from $1.70 to $2.00 (including GST) per $100 of liable earnings.

This means you will have to amend any wage payments you make from 1st April.
If your pay period finishes before the 1st April, but you will be paying on or after the 1st, use the old tax rates – BUT include these figures on your April IRD return. If your pay period carries through the 1st April, please use the new pay rates and also include in Aprils IRD schedule.

Please also note that the Inland Revenue Department will not longer be issuing pre-printed tax tables.

If you prepare your wages manually you will need to calculate your PAYE online at the IRD website.

This may be a good time to consider going onto a computerised payroll system. A payroll system can take away the stress of calculating wages correctly, keeping track of Holiday Pay, Sick Pay and completing schedules to the IRD.

Please give Sue a call at the office to discuss the programme that best suits your needs.

If so, read on...
IRD have notified us that they are no longer be sending out PAYE returns (Employers Deductions IR345) to clients who pay their PAYE online. You will now need to log on to the IRD website www.ird.govt.nz and file your returns through the website.

The IRD are cutting back on the amount of paper they send out. Returns that were once carbonised are no longer, and many clients now file their returns online and receive no paper copy.

Unfortunately we still need a copy of these returns and need you to retain them with your year end information. If you have a means to save them electronically, great! Otherwise, please print us a copy. Believe it or not, mistakes can still happen, and we always need a copy of the original documentation!

[Notification from IRD]
A hoax email is circulating, claiming to offer the recipient a tax refund. The hoax email asks the customer to enter personal details, including their username and IRD number.

IRD has issued a media release today, warning about this hoax email and reminding customers that we will never ask them to forward personal information by email. Although most customers will recognise this is a hoax, some may have provided their information. We’re encouraging these customers to contact Inland Revenue on the 0800 number.

If a customer has provided their information through the hyperlink and provided their User ID, password and pressed submit, the contact centre staff will reset the customer’s password whilst they are on the phone.

It has come to our attention that ACC have added, deleted or changed a number of classification groups over the last few years. It may be of benefit to you to review your invoices to ensure the classification and rate is accurate for your type of business. If you would like assistance with this please contact Emma at Graceteam, she will be able to confirm your details are correct. Alternatively you can get your ACC invoices posted to us directly and we can check the details and advise you of the payment due.

Also are you aware that if an employee has a workplace accident and you pay them 80% of their first weeks wages this needs to be advised to ACC at year end as you are not liable to pay ACC levies on this pay. In the old days this was detailed on the year end wages reconciliation but now you are required to communicate this by phone to ACC. If you are using a computerised payroll system there should be a report that you can run at year end. If you have any queries regarding this please contact Sue or Maria.

We are often asked to file individual tax returns in April, especially those with teenagers waiting for tax refunds. The scheduled time frame for the IRD to issue Summary of Earnings statements is not until late May.

However, in order to confirm any tax refund that may be due we need to request a Personal Taxation Summary from the IRD, which the IRD have advised will not be available until nearer the end of July.

Unfortunately this will delay the processing of refunds until this time. We will keep you posted though, often the IRD give themselves more time than they expect they will need, so we will update you in the June newsletter.