NEWSLETTER NOVEMBER 2002
again to the McLean
in which we discuss
and business matters. We trust you find it informative. Any feedback would
and Co. is a home based chartered accountancy practice based in Clive,
Hawkes Bay. Readers are invited to peruse the practice website
which lists services provided, gives contact details and indicates how to become
a client, contains an extensive base of articles on business and taxation
matters, and has links to other websites that may assist your business.
Being a small firm itself, McLean and Co. strives to provide a
personal and professional service largely to a self employed person and small
business client base. Enquiries are welcomed.
Assistance Financial Help for Working Families
you a NZ Tax Resident?
Return Payments and postdating Cheques
Media Release 7 November 2002- IRD Seeking Tangible Solutions to Meet Small to
Medium Business Needs
Names for McLean and Co.
and interesting Resource Web Site Links for Small Business Owners and Self
BUSINESS AND TAXATION ARTICLES
McLean and Co. website contains an extensive number of articles prepared by
McLean and Co. relating to taxation and business matters. Here
are a selection that will be of interest:
ASSISTANCE FINANCIAL HELP FOR WORKING FAMILIES
provide financial assistance for working families. The table below
shows how much you can earn and still be eligible for family assistance:
of Children (18 & Under) Living at Home
Family Income (Gross)
Income Before Tax
GST rules in Australia are more complex and a bit more quirkier than ours.
One of the problem areas has been a limitation on NZ-based businesses wishing to
register and claim back Australian GST. A NZ-based business could
only register for Australian GST if the business was currently or intended in
the future to make supplies in Australia.
Australian Tax office has amended the rule to give more flexibility.
Businesses can now GST register if they have made purchases in and from
Australia in connection with a business. There is no requirement to
make supplies in Australia. This will allow businesses to register and
claim back input GST if they have not started to sell
in Australia, or are buying products or services for use in another
YOU A NZ TAX RESIDENT?
New Zealand's tax
system is based on two broad notions:
New Zealand are taxable here on their wordwide income.
are taxed here on their New Zealand sourced income only.
If you are going
on an OE or perhaps you are temporarily based here, it is important to work out
whether you meet the definition of a tax resident. Note
that residency status for immigration purposes is quite different to being a tax
If you are already
a New Zealand tax resident and are away for more than 325 days in any 12-month
period, you become a non-tax resident provided you do not have a 'permanent
place of abode' in New Zealand. You will have a 'permanent place of
abode" here if you have an enduring relationship with New Zealand.
relationship is established by considering: Presense in New
Zealand, Accommodation, Social and Economic ties,
Employment or Business Activity, Personal Property,
Intentions, Benefits and other payments .
It will usually take more than one of these to form an enduring relationship.
If you do have an
enduring relationship, you will continue to be a resident for tax purposes even
though you may be away for more than the 325 days.
On the other side,
if a person who is not already a New Zealand tax resident is present in New
Zealand for more than 183 days in a 12 month period, then the individual is
deemed a tax resident.
RETURN PAYMENTS AND POSTDATING CHEQUES
The due date for GST Returns and payments is the last working
day of the month following your taxable period, with the exception of the
November period end which is due the following mid January. Many GST
taxpayers prepare their GST Returns prior to the due date and send these into
IRD with a postdated cheque.
In some cases IRD have noticed that taxpayers have postdated
their cheque for the last day of the month (which has fallen on a weekend)
rather than the last working day of the month. If you intend to
postdate a cheque for GST, to avoid any late payment penalties being charged,
take care that the date you show on the cheque is the last working day of the
month. You will note that the payment due date is highlighted as
the due date on the GST101 GST Tax return as forwarded to you by IRD.
RELEASE 7 NOVEMBER 2002- IRD SEEKING TANGIBLE SOTUTIONS TO MEET SMALL TO
MEDIUM BUSINESS NEEDS
Inland Revenue's structured programme of
interactive consultation with small to medium sized businesses (SME) is
underway. The programme aims to build greater understanding of business needs,
look into ways of simplifying the tax process and reducing tax-related
compliance costs for SME.
This initiative is one part of a governmental
cross-sector approach to reduce tax compliance costs, create more time for
businesses to carry out their business and encourage business growth and
"The initiative represents a significant
effort by Inland Revenue to ensure the voices of small to medium business are
heard. We want to identify the problems specific to this taxpayer group and find
solutions to those problems," said Bruce Thompson General Manager Service
Over the coming two months this programme
will involve a combination of focus groups, qualitative and quantitative
research providing a rich source of information. There will be four streams of
|15 group discussions in larger centres with six to eight
taxpayers representing customer groups such as GST registrants, larger
employers, and small employers
|30 one-on-one visits to taxpayers in provincial and rural
areas by Inland Revenue's small business advisory service staff and senior
managers responsible for communicating with, and providing information to
|A telephone survey with 2100 SME taxpayers and agents
survey in which any SME taxpayer can take part.|
"The extensive consultation we are undertaking with SME
will allow a greater understanding of the things that concern those business
operators the most and will present opportunities for tangible solutions that
specifically meet the needs of that taxpayer group."
In addition Inland Revenue has a number of other activities
in progress to support SME, both operational and policy. Some of the information
gathered during consultation could be used to further develop these.
|A review of Inland Revenue's advisory service for small
business ensuring resources are targeted and cater for common business life
cycle changes. As part of this the department will be reviewing products and
tools currently provided to small businesses to ensure these meet their
|Greater opportunities for business customers to interact
electronically. Inland Revenue has launched a five-year plan to develop and
promote the use of electronic technology to simplify calculating and paying
tax and to broaden the range of electronic services that it provides to
|In the last year Inland Revenue has enhanced the
information we provide and developed a series of interactive services for
business customers through the department's web site - www.ird.govt.nz.
|Development of an Industry Partnership strategy where the
department is working along side industry groups to find ways to make it
easier for their members to meet their tax obligations and to increase tax
compliance within those groups.
|The government has enacted a number of tax simplification
and compliance cost reduction initiatives, many designed to assist small
|Raising the turnover threshold for compulsory GST
registration from $30,000 to $40,000
|Reducing the rate of late payment penalties and
|Introducing a staggered approach to the application of
late payment penalties.|
NAMES FOR McLEAN AND CO.
We have three domain names that all access our business
website. These are: