DO YOU HAVE AN LAQC?
If you have a Loss Attributing Qualifying Company as part of your
business trading structure, there are changes afoot from 1 April 2011.
We will be writing to clients who have LAQCs in the near future about
these changes.
MINIMUM WAGE INCREASE FROM 1 APRIL,
2011
Effective 1 April, 2011, the minimum wage has been increased by 25 cents an hour to $13 an hour.
The training and new entrants' minimum wages will increase from $10.20 to
$10.40.
1 APRIL 2011 TAX CHANGES
Company Tax Rate
The company tax rate will fall from 30% to 28% from the 2011-12 income
year. For most companies, this will apply from 1 April 2011.
Building Depreciation
Depreciation deductions will no longer be allowed for buildings with an
estimated useful life of 50 years or more, such as rental houses and
offices. At the same time there are also new rules to ensure the fit-out of
commercial and industrial buildings will continue to be depreciable.
These rules will change for all such buildings from the 2011-12 income
year. For most businesses they will be effective from 1 April 2011.
WORKING FOR FAMILIES TAX CREDIT
CHANGES FROM 1 APRIL 2011
The definition of family income for Working for Families Tax Credits has
been amended. People receiving Working for Families Tax Credits will no
longer be able to use investment losses, such as from rental properties, to
reduce their income.
The definition will also include an extra nine types of income:
- attributable trustee income
- attributable fringe benefits
- PIE income
- passive income of children
- income of non-resident spouse
- tax-exempt salary or wages
- main income equalisation scheme deposits
- certain pensions and annuities
- other payments.
CASH JOBS IN SIGHTS
IRD has made no secret of its efforts to crack
down on the "hidden economy".
In its last annual compliance focus report, it said cash jobs and other
tactics to suppress income were again in the firing line. Group
Manager Assurance Martin Scott said the hospitality trade had
been a focus for the past two years. "We have identified cases where
reported sales and income are well below what we would expect. "We use information from a range of sources, such as the analysis
of sales levels and margins, to establish businesses most likely to be
non-compliant. We provide them with an opportunity, where appropriate, to
explain any anomalies or provide evidence for their position that may
result from legitimate reasons."
In response to the claim that immigration officials had been present on
one of its visits, Scott said IRD did not involve other government
agencies in such work but in exceptional circumstances where there were
security concerns IRD staff might be accompanied by police.
