OF TIME TO FILE INCOME TAX RETURNS/ 2010 PROVISIONAL TAX
We have received queries about some
clients who are concerned that their 2009 Income Tax Returns will be late,
in view of recent IRD advertising that 7th July is the last date for
filing. Remember that if you are registered under the IRD agency with
McLean and Co. that this does not apply to you, except if the instance
mentioned in the next sentence applies to you. It only applies to
taxpayers who have not registered with a tax agent, and taxpayers who are
registered with an IRD registered tax agent who have lost their extension of
time status due to the fact that previous year returns have been filed
late. With extension of time 31 March balance date taxpayers (the vast
majority of taxpayers) you get up to 31 March the year after the balance
date of the Tax Return you are filing before being penalised for filing
late, but if you miss this dateline in any one year you lose extension of
Relating to the first instalment due
for 2010 Provisional Tax we have also received queries on this. The
first Provisional Tax due date for 31 March balance date taxpayers changed
last year to 28 August and has not altered this year. We shall be
forwarding recommendations to pay to any clients we believe should be paying
this on 28/8/2009, and who we haven't provided the service to by then, in
AUDIT/ COMPLIANCE FOCUS FOR 2009/2010
IRD recently published “advance
notice” of areasof focus in its compliance management programme for
the current economic crisis it is not surprising that key
areas of focus aremanaging tax debt and identifying the “hidden economy”
to combat fraud.
Some items of interest
transactions, the IRD’s focus appears to continue to be on property
acquired with the intention of resale.
offshore investments (calculation of FIF income,overseas data matching exercises to identify unreported
losses – more focus on investigating substantial tax losses.
not reporting income.
including GST fraud, under the table jobs, focus on the hospitality industry
and on agricultural/ horticultural contractors
individuals - global wealth structures.
– importing offshore losses through non market
pricing, potential gaming of interest rates, advance pricing
agreements, continued monitoring of limited risk distributor
structuresand compliance with the thin capitalisation rules.
planning, including business restructures, hybrid
financial instruments, imputation structures and structured
Unpaid child support
Every employee must have a written employment agreement, whether it be
an individual agreement or a collective agreement. The Employment Agreement
Builder has been created by the Department of Labour to provide guidance to
employers and employees on content for the creation of individual employment
The Builder provides examples of clauses drawn from a range of existing
employment agreements, indicates which clauses are legally required in all
agreements, and also offers a range of clauses to meet the additional needs
of your workplace. Once you have identified the clauses you wish to include
in your employment agreement, you are able to assemble the clauses into one
draft agreement for saving and printing out.
This builder provides content for employment agreements that meet or
exceed legal minimum standards.
To access this, go to:
CHOOSING THE RIGHT
There are four primary options for structuring your new
business; you can choose to operate as a Sole Trader, Partnership,
Company or a Trust. The best fit for your business depends on your
specific situation, preferences and the nature of your business.
Each option has advantages and disadvantages.
||No formal structure required.
||Most operate under a legal partnership agreement.
||A separate legal entity, set up under the Companies Act.
||A separate legal entity, set up by a trust deed.
||You own the business and have complete control.
||Partners share ownership and control.
||The company is owned by one or more shareholders, who
||Assets are held and managed by the trustees on behalf of
||You pay personal income tax on profits at your own tax
rate. Losses can be set off against other personal income.
||Each partner pays personal income tax on their share of
profit at their own tax rate. Losses can be set off
against other personal income.
||A company currently pays tax on company profits at 30%.
Profit can be distributed to shareholders as dividends,
but losses can’t usually be transferred.
||Currently a trust can pay tax at 33% and/or make before
or after tax distributions to beneficiaries. Losses
can’t be transferred to others.
||You are personally liable for all business debts and
||You are personally liable for all partnership debts and
||Usually limited to the assets of the company.
||Usually limited to assets held within the trust.
||Easy to set up. Less compliance.
||You share the responsibility.
||Limited liability. May be easier to raise funds.
||Limited liability. Potential for distributing income.
||You have a personal liability. It may be harder to raise
||You have personal liability. There is potential for
upsets in the partnership.
||More compliance. Higher set up costs.
||More compliance. Higher set up costs.