IRD Online Services Outage
- On Saturday 12 August 2017 services will be unavailable from 1.00pm and the estimated time for the services to be back up is Saturday 12 August at midnight.
- On Saturday 19 August 2017 services will be unavailable from 1.00pm and the estimated time for the services to be back up is Saturday 19 August at midnight.
Inland Revenue lifting the veil
Do you have a student loan?
- how long it will take to get loan-free
- how extra repayments can get you loan-free faster, and
- if you’re an overseas-based borrower – how to save on interest. Click here
Compulsory direct crediting of GST refunds
A change made to tax rules will provide businesses with faster access to GST refunds from February next year, says Revenue Minister Michael Woodhouse.
Ho Ho Ho! Knowing what’s deductible
When you’re entertaining clients or colleagues, some entertainment expenses are tax deductible while others aren’t. It can be tricky working out what’s deductible as a business expense and what isn’t.
- if your clients or employees have a greater opportunity to enjoy the entertainment than the general public, you can only deduct 50% of the costs
- if anyone associated with the business has a greater opportunity to enjoy the entertainment than the general public, you can only deduct 50% of the costs
- Christmas drinks for team members or clients in the office
- Christmas drinks for team members or clients in the pub
- Hire of a launch to entertain clients
- Restaurants providing food and drinks to team members at a social function in their restaurant
- Staff Christmas party on or off the business premises
- Function hosted in a marquee at the races (or in a corporate box at the rugby). Inclused the cost of tickets and any food and drink provided
- A weekend away for the team at holiday accomoodation in New Zealand. Includes any fod and drink provided
- Donating food to a Christmas party in a children’s hospital
- Providing morning and afternoon tea for your team
- Providing entertainment, including food and drink at your promotional stand for the Cracker Christmas Festival
- Holding the Christmas party in Fiji (woo-hoo!)
- Taking your family (who don’t work with you in your business) out for dinner to thank them for being patient while you worked long hours and paying for this using the business credit car
GST and Gifts to Clients
The rule of thumb with gifts is that if they consist of food or drink, you can only claim 50% of the expense as a tax deduction. If you are giving out gift baskets or hampers and some of the contents are food or drink, but not all, the food or drink items are 50% deductible but the other gift items are 100% deductible. When you come to claim the tax deduction, you will need to apportion the expense between the 100% deductible items and the 50% deductible items.
- Bottle of wine or six pack of beer
- Meal Voucher
- Basket of gourmet food
- Box of chocolates/biscuits
- Christmas ham
- Book or gift voucher
- Tickets to a rugby game (but not corporate box entertaining)
- Movie tickets
- Presents (not food or drink)
Filling Employment Gaps Over Summer
With the holidays coming up, you may have started to think about whether to employ some extra people over the holidays. If you do, think carefully about the kind of help you need and broadly what kind of employment contract is best suited to the situation. It’s important to make sure you comply with current employment law and have it right from the start.
CasualsCasual employees might be right for your business, for instance if you are covering unexpected absences. But remember that, no matter what you call the employment, if you treat casual staff as if they are permanent — for instance, give them regular hours or work over a sustained period — their employment may be regarded as permanent, with all that that entails. Points to note:
- Casual work is intermittent or irregular, and casual employees don’t have to accept every offer of work you make so it may not fit the situation you have in mind
- Just like other employees, people who work casually for you need an employment agreement
- You can offer casual employees annual holiday pay on a ‘paid as you earn’ basis. You need to discuss this with the people you propose to employ as casuals. If they agree, this must be stated in their employment agreements, and payment must be recorded separately in wage records at a rate of at least 8%.
Fixed-term EmployeesIt might suit your needs better to employ someone on a fixed-term agreement, particularly if working hours are going to be regular and predictable. But the law is very strict about the form of such agreements, and if that is not complied with, you may find yourself with a permanent employee, i.e. someone whose agreement is of indefinite duration. Because a fixed-term agreement is intended to be for a limited time, the agreement must state the means of ending the employment relationship. For instance, this might be a specific date or event (like the last day of the Boxing Day Sales or the final performance of the Christmas pantomime). Or it might be when a specific project is completed, for instance roofing the new hay barn or installing a new cooling system. As an employer you must have genuine reasons for the employment period to be fixed-term and you must advise your prospective employee of when and how the employment term will end and the reasons for it ending in that way. Make sure the employment agreement backs this up clearly. Be aware of the rules around entitlement to holiday pay. Like casual employees, employees on a fixed-term agreement of less than one year can agree that they will receive 8% added to their gross weekly earnings (paid-as-you-earn) instead of taking annual holidays or getting paid out all of the 8% at the end of their term. Again, you must state this clearly in the employment agreement, it can’t be less than 8% of the hourly rate, and it must be shown as a separate item in the employee’s pay slip and in wage and time records. If you would like more information about how to cover these situations in your employment agreements or your wage and time records, please let us know.
Seasonal WorkersMany businesses are looking for seasonal workers. The hospitality industry want people for their high season. The summerfruit and wine sectors are moving into high gear. If you are keen to employ seasonal workers over the summer and can’t find New Zealand citizens or residents to do the job, it could be an option to employ overseas workers. If you are considering this, make sure you take these simple steps:
- When advertising, state that applicants must be entitled to work here
- When applicants contact you, ask for evidence they are entitled to work here
- Keep this evidence on file
- Check their visa and passport details on Immigration NZ’s online tool VisaView
RSE SchemeIf you are an employer in the horticulture or viticulture industry, and your need for seasonal workers comes up annually, you might consider becoming a Recognised Seasonal Employer (RSE). This scheme can help you recruit overseas workers when there aren’t enough New Zealanders to plant, maintain, harvest and pack your crops. You need to apply for RSE status and it needs to be renewed regularly. Talk to us if you would like to pursue this.
Do you own rental properties?
Provide GST registration details to remote vendors
- you are GST-registered
- the supplies are part of your taxable activity, and
- you let the non-resident supplier know you’re GST registered and provide your New Zealand GST registration number or business number