Payment of Wages to Spouse or Partner
Inland Revenue has recently reminded accountants that employers who want to claim deductions for payments to a spouse or partner need to get approval before filing a tax return. Inland Revenue will not back-date their approval. If you are trading as a limited liability company, this does not apply. Limited companies do not have spouses.
IRD Plea: Get the Details Correct
Many electronic payments are being made with incorrect details. The correct methods are described on the IRD website. Use the following information for making electronic payments:
• Particulars: IRD number (if you have an 8-digit IRD number put a zero in front of the number)
• No punctuation is to appear on the IRD number Payee code: Account type and period (with a space), eg, IPS 31082017 or DED 15092017.
• Reference: Nothing is required. Using correct details will stop
incorrect statement of accounts or debt letters being issued in error.
Holiday Pay Calculations
When there’s a public holiday on a day your employee usually works, they’re entitled to a paid day off — no matter how long they’ve worked for you. You can only require employees to work a public holiday if it’s written in their employment agreements. Also, if they agree to work, you must:
• Pay them at least time and a half
• Give them another paid day off later.
If you need any assistance calculating annual leave, statutory holidays and taxes on holiday pay lump sums please phone Sue or Kristen.
IRD reminders
Inland Revenue has issued a reminder about student loans and any income created via Youtube. A student loan for borrowers returning from overseas becomes interest-free again after six months. If you know someone who is in this situation, suggest they contact Inland Revenue to fix this up. IRD also reminds people that income generated through YouTube can be taxable. Remember it’s income and just because it was fun doing it; it’s still taxable!
Change is on the Way
With the new government coalition now in place the intention to make increases to the minimum wage and paid parental leave have been announced. This is what it’s looking like so far:
• first increase to minimum wage to $16.50 per hour in April 2018
• further increase to $20.00 per hour by April 2021
• increase in paid parental leave in incremental stages; 22 weeks by July 2018 and further increase to 26 weeks by July 2020
Other changes in the works
• 90 day trial period under review
• Gender pay gap reduction and pay parity
• Overseas Workers – new regulations and penalties
• Medical certificates can be issued by a Health Practioner (includes Chiropractor, Dentist, Dietician etc)
We know this has a lot of business owners more than a little worried so let us help you be better prepared for these changes.
Ceasing to Let a Rental Property
You can claim expenses on your rental property so long as it’s available for rental. If you want to sell the property or move into it yourself, then the moment your tenant leaves the property it’s no longer considered available for renting.
Therefore, any expenses relating to the property, after this date, are not tax deductible. This includes major repairs caused by an unruly tenant.Remember, all repairs have to be done before the tenant leaves or they are not tax deductible.
Keep up-to-date with what's due when and any other useful websites on our Business Toolbox page.