An income equalisation scheme is offered to businesses in the farming, fishing, forestry, testing, construction, and mining industry. It operates as a method for businesses to even out income fluctuations by distributing their gross income from year to year. A special account is created for businesses where they can pay their income and earn an…
Provisional tax helps manage income tax payment. Rather than paying a lump sum at the end of the year, you are able to make repayments throughout the year. There are 4 main options available to work out provisional tax: Standard Based on your previous year’s residual income tax (RIT) plus 5%. This is particularly useful…
Tax codes assist your employer in calculating how much tax should be deducted from your pay, benefit or pension. It is important to calculate your code and inform your employer as failing to inform them will result in getting tax at the non-declaration rate of 45%. You should also be updating your employer if your…
Self-employed individuals have to carry out all aspects of their business on their own. This includes anyone who owns a small business, works as a sole trader, or provides contracting services. In most cases, individuals are able to start a business without setting up any legal provisions. If you are self-employed, you can use your…
There are several sorts of expenses that can be claimed during the end of year tax return. These include: The cost of an accountant or tax agent to file and complete tax returns. Cost of income protection insurance if the insurance payout would be taxable. Talk to your insurance provider about whether your income protection…
The IRD has introduced a temporary loss carry-back scheme to provide financial support to businesses expecting to make a loss in the 2020 or 2021 income years. Under the temporary loss carry-back scheme, businesses can carry losses made in 2020 (or predicted to make in 2021) back to the preceding income year to offset them…
New Zealand tax residents selling residential property (including overseas property) that they have owned for less than 5 years may be subject to income tax. To determine whether you will have to pay income tax, you will need to use the bright-line rule. The bright-line rule only applies to property bought on or after 1…
Self-employed individuals (contractors, sole traders, partnerships, or company owners) running a business from their home can claim the parts of their home used for business as an expense. Any space in your home that is primarily used for the purpose of running your business can be claimed. This may include certain rooms such as a…
Businesses that have been impacted by COVID-19 may be finding it difficult to continue their research and development (R&D) plans on track. As part of the Government’s COVID-19 economic response, more businesses carrying out eligible R&D activities may be able to access a refund of their R&D tax credit with increased leniency. The R&D tax…
As part of their COVID-19 response, the IRD has introduced a number of measures aimed at alleviating the financial pressure on those who are self-employed. Tailored tax rates and exemptionsSelf-employed workers who have had their income significantly affected by COVID-19 and no longer fit in their current withholding rate can apply for a tailored tax…