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McLEAN AND CO.
End of Tax Year
Extension of Time Arrangements
Changes to Tax Rules affecting the Horticulture and Viticulture Industries
CHANGING YOUR EMAIL ADDRESS
If you change your email address, don't forget to let us know your new email address. We like to keep you informed by forwarding to you this newsletter and other items of interest from time to time. Letting us know any new email address you may change to allows the contiuation of this service.
END OF TAX YEAR
The end of the tax year is nigh. We will be sending out Business Documentation Checklists in the near future. Dont forget to do a stock take if you have goods on hand and you are a retailing/ manufacturing outlet at 31 March, 2010. Also don't forget if you liable to pay 2009 Terminal Tax on 7 April, 2010.
This is for all terminal tax payments covered by an extension of time. You can make payments by:
If you can’t pay on time, call IRD on 0800 443 773 between 8 am and 4.30 pm to discuss your situation and options. Find out more about your payment options
For those taxpayers with a tax agent taking care of Income Tax Returns, Wednesday 31 March is the last day for the 2009 returns to be filed under our extension of time arrangements.
From 1 April 2010 there will be some changes to tax rules. If you directly hire any type of contractor (individual, partnership, trust, or company) for work or services for the supply of labour or substantially for the supply of labour on land in connection with:
you'll need to deduct tax from the contractor’s payments at the rate of 15 cents in the dollar. This is unless the contractor has a Certificate of Exemption or a certificate authorising tax be deducted at a specified rate.
Any payment for:
The principal term is wholly or substantially for the supply of labour.
If you’re a grower directly hiring a contractor, or a contractor hiring a subcontractor, your responsibilities under the new rules are to:
If the contractor doesn’t have a certificate of exemption record the:
The tax code to use is "WT" even if they have a Certificate of Exemption or a special tax rate.
You should also include the gross schedular payment details in the “Earnings and/or schedular payments not liable for ACC earners’ levy” column in your employer monthly schedule. This will ensure you don’t get charged ACC earners’ levy on the schedular payments made.
No tax is deducted if a contractor holds a Certificate of Exemption. If a contractor holds a special tax code certificate, the employer deducts tax at the rate specified on the certificate.
If you're a contractor, you can apply online for a certificate of exemption.
A contractor needs to give their employer an IR330 (tax code declaration) showing the “WT” tax code. The employer then deducts tax at the standard rate of 15 cents in the dollar. This is unless the contractor holds a valid certificate of exemption or special tax code certificate.
The employer should sight the original certificate and check that it's in the name of the contractor being used. If you want to check the authenticity of the certificate please call 0800 377 772. You should keep a copy of the certificate for your records.
A contractor without a certificate of exemption or a fully completed IR330, has tax deducted at the no-notification rate of 30 cents in the dollar.
To calculate GST and tax from a contractor's tax invoice where no certificate of exemption is provided, see the example below.
Charge for work $15,000 plus GST ($1,875) = $16,875
Less tax is $ 2,250 (15% of $15,000)
Net payment is $14,625.
You deduct the tax from the $15,000 and show the $15,000 as the gross amount on the Employer Monthly Schedule and the $2,250 as the tax deducted.
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