Use of Home Office – New Rules – from 1 April 2017 for March balance dates

From the beginning of the 2018 tax year the rules for claiming for use at home are changing. 

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Cashflow management: 7 May provisional tax payment options

We would like to recommend an IRD-approved service those who are due to pay provisional tax on 7 May might find useful – especially if cashflow is tight after settling terminal tax.

 

Tax Management NZ (TMNZ) is a payment intermediary that gives you greater flexibility around how and when you make your provisional tax payments, while eliminating IRD late payment penalties and reducing interest costs.

 

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FBT changes on the horizon

Currently, companies that provide a motor vehicle for the private use of their employees must register for and pay FBT. Draft legislation has been introduced which will enable some small businesses to avoid having to pay FBT.
 
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2017 NEW ZEALAND TAX CALENDAR

April 7 2017
2016 Terminal Tax 
(March balance date)
 
May 8 2017
3rd instalment of 2016 Provisional Tax 
(March balance date)
GST for March 2017
 
May 29 2017
1st Instalment 2018 Provisional Tax 
(December balance date)
GST for April 2017
 
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Tax deductions on food and drink

Inland Revenue has informed us it considers the supply of all food and drink, whether in the course of entertainment or not, is tax deductible only to the extent of 50%. Thus, under this new interpretation, if you give your client a bottle of wine or a food hamper you can no longer treat this as a fully tax deductible cost. If you want a 100% deduction, think of something different such as a bunch of flowers or something else which cannot be consumed.
 
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Beware the debt collector

Inland Revenue now has the power to disclose tax debts to debt collectors. 
If the debt is more than 12 months old and greater than 30% of the taxpayer’s gross income, the tax department can release the information.
These disclosures are going to be very dangerous. They will damage the credit rating of those who offend. If you are in this situation, be sure to make an arrangement with the Inland Revenue to catch up and make sure you stick to it. 
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Get your debtors right at 31 March

Clients use all sorts of systems for keeping a tally on the money owing to them.  From a tax perspective, the figure at balance date needs to be accurate.  
Please note:
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Undeclared cash jobs

Recently, Inland Revenue wrote to us to remind us “undeclared cash in the construction sector remains a high priority for us”. 
Failing to declare cash jobs is, of course, illegal.
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