An article in stuff today headlines the benefits to SMEs of reporting changes. These changes simplify the reporting requirements for all businesses whose turnover is less $30 million(!).
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The law received Royal assent on 16 November 2015 and applies to property bought on or after 1 October 2015. To review, the law requires sellers of residential property to record as income and pay tax on the net profits on sale if that property was acquired within two years of sale. Exceptions to this are
Recent changes in the requirements for forming a company have made it more challenging, though for the most part something that can be worked with. The changes include requiring dates of birth and place of birth for each director. If you’re incorporating a company with others, such as business partners, this information is not to hand as readily as if you’re forming the company on your own.
Inland Revenue has announced that after its review, it has reduced the mileage rate it authorises for business travel of 5000 kilometres or less. The new rate is 74 cents per kilometre a reduction of 3 cents per kilometre from previous. This rate is used to claim business travel costs in lieu of actual receipts for sole traders who use their vehicle in business or by employers as a reasonable estimate of costs when they reimburse employees for the use of the employees’ private vehicle for business related travel.
The Government is in the process of formalising legislation that will tax the profit on sale of residential property if that property is sold within two years of its acquisition.
As with any requirements that apply to sales involving land and property, it is not simple and straight-forward. As a starting point you can assume that if you’ve acquired a property and sell it within two years of its acquisition, there will be taxable income on your gain it is value. Obviously the tax is only on the gain, not on the total proceeds of sale.
Requirement to retain copies of GST Tax invoices
Copies of tax invoices for supplies greater than $50 are required to be maintained for seven years. Otherwise, if you cannot now produce the tax invoices to support the input tax claims made, Inland Revenue may disallow those input tax deductions. The only exceptions are for second hand goods claims or when the Commissioner is satisfied that there are or will be sufficient records available to establish the particulars of any supply or class of supplies, and that it would be impractical to require that a tax invoice be issued
In life, circumstances can provide timely reminders of things we should remain aware of. Recently our family discovered we had missing relatives and have begun getting to know and connecting with them. On TV3 there have been a few versions of the program that seeks to connect families together, including the most recent version Lost & Found, premiering Thursday at 8.30. These highlight the importance of and special nature of families and family connections.