IRD Updates - Welcome To The New Tax Year
Changes to Bright-line Test
For residential property the bright-line test has been extended from 2 years to 5 years from the 29th March 2018.
This only applies to any properties where an agreement to buy the property has either been entered into on or after 29th March 2018, and not before that date. If the agreement was made to purchase a property prior to 29th March 2018 the 2-year bright-line test still applies.
The 5 year bright-line test works in the exact same way as the 2 year bright-line test.
What is the bright-line test?
Gains from residential property that is disposed of within two years of acquisition, subject to some exceptions will be taxable.
When: Voluntary from 1 April 2018, compulsory from 1 April 2019
What: Businesses will need to file payroll information every payday, rather than once a month. This will replace the employer monthly schedule (EMS).
Why: To make a business’s tax requirements part of its payroll process, rather than being a separate step.
What you need to do: Start thinking about how and when you’ll opt in.
You may find payday filing easier if you use payroll software, because this allows your payroll information, including salary, wages, PAYE and other deductions, to be automatically sent to Inland Revenue at the same time as you pay your employees.
If you already use payroll software, ask your provider how they can support payday filing.
If you don’t use payroll software, start planning now. You’ll have time after your payday to file the returns. Payment due dates for PAYE and other deductions won’t change.
We are here to help if you have any queries so phone your account manager on 07 578 5416.
AIM - The New Cashflow Game Changer for Small Businesses
AIM (accounting income method) is a new option for paying provisional tax and GST. This applies to the financial year starting 1st April 2018. Election is made by filing the first AIM activity statement with your first GST return for period starting 1 April 2018.
What it could mean is you pay provisional tax when you have profit, there are a lot of exclusions so you will need to check with us if this applies to you.
As IRD state - this could be a cash flow game changer but check with us if this applies to you first.
Last But Not Least
ACC Invoices for CPX Cover Are Being Issued
It is imperative these are paid on time otherwise the cover is automatically cancelled and you have to restart the process again. Please contact our office if you have received your invoice and want us to check the details or if you are unsure of anything.
Payment Plan An Option For Accounting Fees
If you prefer to pay your accounting fees more regularly please talk to us about our fixed fee/service plan options – we can spread the fees annually or quarterly. It’s sometimes nice to spread the cost instead of paying one lump sum so talk to us and we’ll get it set up for you.