Tax Changes in Response to the COVID-19 Pandemic
There are numerous changes to tax laws from 1 Aril 2020 in response to the COVID-19 pandemic.
Business owners need to take note to make sure they are fully informed going forward.
There are a lot of changes, but broadly speaking, we see the following having the most impact:
• Depreciation deductions for non-residential buildings will be re-instated at 2% diminishing value or 1.5% straight-line. This is designed to reduce the tax…
Mortgage Holiday – Be Careful
One of the measures designed to help ease financial pressure during the COVID-19 pandemic is mortgage holidays being offered by banks.
It pays to check the detail on these to see if the interest on your mortgage accrues or is written off. If the interest accrues then it is added to your loan and you will find the balance increases. With how mortgages work, this could…
Imperfect Information and Business Decision Making
How many business decisions do you make each day? Unless you’ve sat down and thought about it, probably more than you realise. Of the decisions you make, how reliable is your information?
In a perfect world, we would have perfect information for business decision making. For example, take quoting work. With perfect information, you would know exactly the number or level of inputs such as labour, materials and time that…
Ring-Fencing of Residential Rental Losses
On 5 December 2018 draft legislation was introduced by the government to ring-fence tax losses for residential rental properties.
The finer details for this new law are still being thrashed out, but broadly speaking, if you own residential rental property that makes tax losses, then from 1 April 2019 you will no longer be able to offset these against other income sources. Instead the losses will carry forward and accumulate to…
Preparing for End of Financial Year
If your business has a 31 March balance date, then your end of financial year is approaching fast.
Make sure you are prepared by reviewing the following:
- Debtors – are they all recoverable? In order to get a tax deduction for bad debts, they must be written off before balance date.
- Creditors – Make sure you have all unpaid invoices to hand and recorded into your accounting system.
- If your…
Planning for the New Financial Year
For most businesses, April marks the start of a new financial year. It’s an opportune time to review the past year and plan for the next.
How has the last 12 months gone for your business and are you achieving your goals?
What would you like to see improve over the next 12 months? It could be sales, cashflow or simply more leisure time.
Accounting and management systems. Are they delivering the information you need…
IRD Use of Money Interest Rates Rise
From 29 August 2019 the interest rates IRD charge for unpaid or underpaid tax will increase from 8.22% to 8.35%, At the same time, the interest rate IRD will pay on overpaid tax will fall from 1.02% to 0.81%.
Given the current low-interest rate environment, it appears IRD intend to use the interest it charges as a punitive measure, as opposed to compensation for the cost of not having the…
The Importance of Cash Forecasting
There is an old saying, Cash is King, and it is so true. Cash flow is as important to any business as air is to us for survival. The importance of robust cash forecasting cannot be overstated.
The timing of cash flows in and out of all business’s ebbs and flows. For example, GST Registered businesses with a March balance date will have just had to pay their 2018 terminal tax, March…