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Issue No 22                                                                                                                                                                                                            Accumulus Limited July 2016   

TEAM NEWS

Bev Oswald has reluctantly decided to reduce her time commitment at Accumulus in favour of spending more time managing her own family building business. However we are delighted to say that Bev will not be leaving completely and that she has agreed to stay on in a consultancy role. so although she will not be working regularly in our offices if you wish to talk or meet with her please contact us and we will arrange for Bev to telephone you / or meet with you.

Matthew Davis is a CA who left Crowe Horwath in Queenstown and has moved to the BOP with his family. He joined us in January and is now an integral part of our team at Accumulus and is enjoying the balmy winter weather in the Bay.

Long time Katikati resident Tracey Body also joined us as an accounting technician at the end of last year and has also fitted seamlessly into the team. She had been working for Ingham Mora in Tauranga for the last few years so is relishing the lack of travel time to work.

Sue Penny and Lisa Robb who both left at the end of last year are both well and have been back to visit us. Sue and her husband are in the middle of housebuilding and Lisa is helping manage her partners business in Auckland.

Lisa thoughtful as ever has seen to it that we have a real edge over our competitors, she has given Accumulus a crystal ball. Once we have learned how to use it properly our forecasting abilities will be significantly enhanced.

Chris Hewlett and Maree Brown have headed off for a six week motor bike holiday in the USA and Canada - happy travels!

Fortunately for us Karl Ward who worked for Accumulus before he headed for the big smoke of Wellington is back in the Bay and has returned to help us for a few months this year.

Chris' role at reception will be covered by Lizzie and Sara both of whom have good experience of the reception role at accountancy firms.

IRD NEWS - TAX SIMPLIFICATION/CHANGES 

The following are some of the intended changes which with the exception of the "AIM" have a proposed commencement date of 1 April 2017, but maybe the devil will be in the detail!

Provisional Tax IRD are looking at changing the way provisional tax is paid including allowing 

  • All taxpayers including Companies and Trusts to have a "safe harbour" status for the first two provisional tax payments if they use the standard uplift method. However for the third provisional tax date Companies and Trusts will need to catch up any shortfall compared with the actual tax due or use of money interest will apply for any shortfall from that date.
  • Businesses with a turnover of less than $5million may pay provisional tax based on their actual profits per their accounting software along with their GST (Accounting Income Method "AIM")
  • Increase in the personal safe harbour tax threshold to $60,000.


GST - businesses should be able to file their GST Returns with IRD directly out of their software. This has been trialled with Xero and MYOB and should be available within the next two months.


Resident Witholding Exemption Certificates - will generally be issued for an unlimited period rather than having to be renewed annually. The taxpayer will be responsible for surrendering the certificate when the reason for the exemption has ceased.


FBT on Vehicles - small companies may account for private vehicle use in the same way as sole traders or partnerships by calculating the business use proportion and just claiming the business proportion rather than requiring the application of the FBT rules.


Penalties - removal of incremental late payment penalties for GST income tax and WFF.


Contractors - can elect their own withholding tax rate including voluntary agreements where WHT is otherwise not required.

ALL DONE!

Accumulus has collected a certificate from the IRD for filing 100% of our clients' 2015 year tax returns by the 31 March 2016 due date (as we do each year - a point of pride for us). For the Tauranga area the overall tax filing percentage was 95.48%, so the average firm files approximately one in twenty of their client tax returns after the due date!

PROPERTY

BRIGHTLINE TEST

Broadly the sale of a property within two years of its purchase (for purchases after 1 October 2015) gives rise to taxable income to the extent of any gain on sale (and a tax loss for any loss on sale but this is only offset able against taxable gains on sale). As ever the detail is more complex, the main home is exempt as is any farming or orchard property that is deemed to be an economic unit, so lifestyle blocks are probably caught.

If a property sold within two years has an overseas owner (which can include Kiwis living overseas) then witholding tax is payable to the IRD by the buyers agent (or the sellers agent) at 33% of the profit to the vendor or at a default rate of 10% on the sale proceeds. There is no main home exemption for foreign owners and once again the detail is more complex.