Can you believe another tax year is almost over? We’ll soon be sending out the annual checklists. Please keep an eye out, these will be sent out in late March. Rachel and Phia are taking turns in the Amberley Office on Wednesdays. Feel free to drop in any Wednesday from 9:00 – 2:30.
End of year tax planning:
There are several things you can do to help us get your annual accounts correct including:
- Review last year’s Schedule of Fixed Assets, let us know if any assets have been scrapped, sold, or traded in.
- Do a stock take and remember to value the stock using GST exclusive prices. You can use Cost, Replacement Price, or Market Value to calculate the value of your closing stock, we recommend cost for most situations.
- Bad debts: make sure that any bad debts have been written out of the debtors’ ledger by the 31 March 2022, so that we can claim them as an expense.
- Count livestock on hand on 31 March 2022.
Rental Property Interest Changes
If you buy a rental property any time after 27 March 2021 you can no longer claim interest on a loan taken out to purchase the property.
If you bought the property before 27 March 2021 and had an existing loan, the amount you can claim on interest is as below.
| Date interest incurred | Percentage of the interest that can be claimed |
|---|---|
| 1 April 2020 to 31 March 2021 | 100% |
| 1 April 2021 to 30 September 2021 | 100% |
| 1 October 2021 to 31 March 2022 | 75% |
| 1 April 2022 to 31 March 2023 | 75% |
| 1 April 2023 to 31 March 2024 | 50% |
| 1 April 2022 to 31 March 2025 | 50% |
New Tax Rate for Individuals
| For each dollar of income | Tax Rate |
|---|---|
| Up to $14,000 | 10.50% |
| Over $14,000 and up to $48,000 | 17.50% |
| Over $48,000 and up to $70,000 | 30% |
| Over $70,000 and up to $180,000 | 33% |
| Remaining income over $180,000 | 39% |
Trusts Reporting Changes
From the 2021-22 tax year most trustees will need to prepare financial statements and provide additional information with their income tax returns including:
- The nature and amount of any settlement made on the trust during the year;
- The details of anyone who is a settlor of the trust;
- The amount of any distributions made during the year, and the details of the beneficiary who received the distribution;
- Details of any person who has powers to appoint or remove trustees and beneficiaries or amend the trust deed.
Sick Leave Changes
Minimum sick leave entitlements have increased to 10 days per year from six months after the employee’s work anniversary start date.
Minimum Wage Increase From 1 April 2022 the minimum wage will increase to $21.20.
New Public Holiday
This year will be the first time Matariki will be an official public holiday. The date will change each year, but this year it is on Friday 24 June 2022.
Asset write-offs
The value of fixed assets that are expenses and not capitalised has now permanently been set at $1,000 for assets bought after 17 March 2021.
COVID19 Support Schemes
COVID Support Payment
The new COVID Support Payment that has just been announced, will be $4,000 per business plus $400 per employee, capped at $24,000. Applications open on February 28, with payments starting from March 1. There will be three fortnightly payments over six weeks. Businesses must show a 40 percent drop in seven days within the six weeks prior to the shift to Phase 2 of the Omicron response on February 15, compared to seven days after that date.
The Small Business Cashflow Scheme (SBCS) New “Top Up Loan” allows firms that have already accessed a loan to draw down an additional $10,000 with a new repayment period of five years and the first two years being interest-free.
COVID-19 Short-Term Absence Payment is available to employers and self-employed workers, who cannot work from home while waiting on a COVID-19 test result.
COVID-19 Leave Support Scheme is available to employers and self-employed workers who have been told to self-isolate and cannot work from home.
Xero Training
We offer one-on-one Xero training if you’d like to get a few pointers or have some questions.
Xero Tip
Have you ever wondered how a transaction would affect your books, but you didn’t want to risk messing up your financials? The demo company allows you to test out transactions and features that won’t affect anything you already have set up.
To access the demo company feature, click your organisation’s name and select My Xero. At the very bottom of the next screen, you will see a link to Try the Demo Company. You can reset the demo company at any time, but you should be aware that any data you enter or import will automatically expire after 28 days.
