Tax assistance package
Recent law changes may help your cash flow and reduce your compliance costs.
From 1 April 2009 there were tax changes for:
Provisional tax changes
If you use the standard method to calculate your provisional tax payments, there was a change to the way provisional tax is calculated for the 2008/09 and 2009/10 income years - since 1 April 2009 you pay less provisional tax.
The threshold for being charged provisional tax use of money interest (UOMI), based on your residual income tax (RIT), has increased from $35,000 to $50,000 for individuals.
GST threshold changes
| The threshold... | has increased from... |
|---|---|
| for compulsory GST registration | $40,000 to $60,000. |
| for filing six-monthly GST returns | $250,000 to $500,000. You need to apply for this. |
| allowing you to use the payments basis | $1.3 million to $2 million. You need to apply for this. |
Employer changes
PAYE changes
The threshold for paying PAYE twice each month, based on your annual PAYE and employer superannuation contribution tax (ESCT), has increased from $100,000 to $500,000. However, the threshold requiring you to file electronically using ir-File remains at $100,000.
FBT changes
- The threshold to file and pay FBT annually has increased from $100,000 to $500,000.
- If you're an owner-employee of a "closely held business", you can choose to file FBT returns annually.
- The value of minor unclassified fringe benefits (for example minor gifts such as chocolates and flowers) provided to employees without attracting FBT, has increased.
- The FBT prescribed interest rate for low-interest employment-related loans has decreased.
Decrease in use of money interest (UOMI) rate
This change took effect from 1 March 2009, not 1 April 2009:
| From 1 March 2009 the UOMI rate for... | decreased from... |
|---|---|
| underpaying tax | 14.24% to 9.73%. |
| overpaying tax | 6.66% to 4.23%. |
What this means for you
If you:
- underpay your tax, you'll incur less UOMI
- overpay your tax, you'll receive less UOMI
Simplified rules for deducting legal expenditure
If you incur business-related legal expenditure, you can immediately deduct up to $10,000 per year from your income tax in the year it was incurred, without needing to distinguish whether it's revenue or capital. This will save you time and expense.
- This information is provided by Inland Revenue
Tax assistance for businesses
