We have found that there is some confusion for business owners around the the tax treatment of the wage subsidy. Tax treatment of the wage subsidy (the technical stuff): It is not subject to GST. An order in Council is currently being drafted to treat it as exempt (Section 5(6E)(B) (iii GST Act) The wage subsidy paid to the employer is not taxable. It is excluded income under Section CX… Read more
For full details of the scheme – click here. The scheme is open to Sole traders and self employed as well as employers. You will have to declare: 30% or more decline in revenue compared with last year for any month between January 2020 and the end of June 2020. Applications can also be made on the basis of forecast revenue loss within the period of the scheme. Maximum claim… Read more
The Government has released an economic response package to help cushion the impact of COVID-19 and support the economy during the COVID-19 crisis. The package includes: wage subsidy scheme leave and self-isolation support business cash flow and tax measures wider $12.1 billion package For full details on the package please read THIS ARTICLE. Our initial thoughts The tax measures in the overall fiscal package, although limited, are not cheap. The… Read more
But Should We Use It? We’ve now got cheap money so let’s borrow more so we can spend more and save our country. Well that’s the message from the Reserve Bank. It’s a message I support but with one big fat caveat: It’s a message for business owners not households. If you’re a business owner only borrow to buy assets, technology or IP that will drive your revenue upwards, increase… Read more
Plan then invest in strategies and professional advice to maximise your business’ goodwill. Why? There are 2 compelling reasons: What you spend on increasing the Goodwill value of your business is 100% tax deductible. What you get paid for your Goodwill when you sell your business is 100% tax free. Is this not the best Win-Win in business? Tax-deductible expenses and tax-free capital gain! How do you increase the value… Read more
If you need a car to operate your business, you may wonder whether it makes more sense to buy or lease a company vehicle. On the one hand, if your business owns the car you’ll have a long-term asset and may qualify for more tax deductions. On the other hand, buying a car is a huge expense and monthly lease payments tend to be lower than car loan payments; they… Read more
International Tax Obligations More of our transactions are done over the internet with less concern about where the items/services/work is coming from and more about providing what your customers need at a competitive rate. However, the Inland Revenue is concerned that the tax man is getting what they are owed, and international tax is no exception. It pays to know where you stand with your particular setup. This blog is… Read more
To many people, financial planning sounds like something for the very rich. The wealthy take their piles of money to someone who tells them where to invest it so they can make even more. The rest of us focus on saving what we can and paying off debt and hoping we become financially stable. What though, is financial planning really about? It is about having long and short-term financial goals… Read more
Why might you need to choose a business credit card? It can be a challenge for new business owners to find a bank that will approve them for even a small business loan. Most will see a young company as too high a risk to qualify for corporate lending. A credit card can serve as a short term solution for small scale financing, offering entrepreneurs a “foot in the door”… Read more
If you’re thinking about making your home, rental property or holiday house available for short term rentals, make sure you know the rules on holiday rental agreements, claiming expenses, whether to declare it at tax time, and more. Holiday home rental needs to be done right Key things to consider for holiday rentals With the rise of online holiday accommodation websites like Airbnb and Bookabach, listing a property for short-term… Read more
You can claim tax deductions for lots of daily expenses when you’re travelling for work. If you take a holiday as part of the same trip, you can only claim for the parts of the trip that were work-related. In general, when you’re away from home you can claim for: flights taxis, or mileage if you use your own car for business travel accommodation meals and snacks. Accommodation If you’re… Read more
For this property tax tip we thought it might be handy to summarise the 10 year rule. There are three classes of people involved in land type businesses for income tax purposes. They are developers, dealers in land and builders. The first two are not generally involved in building. If they buy an investment property and sit on it for at least 10 years, they can sell the property without… Read more
Here is a property tax tip that is often overlooked: claiming depreciation. When you buy a property, you can separate out items of commercial fit out for depreciation purposes. Along with the fit out, one item often overlooked is depreciable land improvements like hardstanding areas such as car parks, as separate assets. These hard standing areas could just be base course. The diminishing value rate for car parking pads is… Read more
House inflation; something to think about when it comes to one our most expensive assets. Since 1963 under 12 three year terms of National governments average house prices have risen by 9.2% per annum. Under Labour’s 6 terms they have risen 16.8% per annum on average. If we confine ourselves only to the 1990+ low inflation period the average per annum rise under National has been 6.6% versus 12.6% under… Read more