McLEAN AND CO. Chartered Accountants

Accounting                               Taxation                                   Business Advice and Development Assistance                                        

 P.O. Box 10 , Clive         133 Main Rd, Clive           Tel. (06) 8700952          Fax. (06) 8700955 

Email murray@mcleanandco.co.nz                                  Website www.mcleanandco.co.nz

 
EMAIL NEWSLETTER  NOVEMBER 2011
 

Welcome again to the McLean and Co. Newsletter in which we discuss current taxation and business matters. We trust you find it informative.  

 

NEW CLIENTS

We are happy to accept new clients.  We would be happy to assist colleagues and acquaintances as new clients.

 

INDEX

  1. Employing Students or Casual Staff Over the Holiday Period

  2. Putting Your Investments in the Name of Your Children

  3. KiwiSaver- Exemptions from Automatic Enrolment Rules

  4. Grooming your Business for Sale at the Best Possible Price

 

 

EMPLOYING STUDENTS OR CASUAL STAFF OVER THE HOLIDAY PERIOD

With the Christmas break approaching you should be aware  about your obligations as an employer if you employ students or casual staff over this period, and when a Tax code declaration (IR330) must be completed.

School Students

When employing a student you may not need to deduct PAYE. Discuss with the student if they feel they'll earn $2,340 ($45 a week) for the full year (1 April to 31 March) from all sources of income.

If their full year earnings are likely to be:

  • less than $2,340 - they don't need to complete and give you an IR 330 and you don't need to deduct PAYE.
  • more than $2,340 - they need to complete and give you the IR 330 and you need to deduct PAYE. If they don't you'll need to deduct PAYE at the no-notification rate of 45 cents, plus 2.04% earners' levy.

If they're not sure what their full year earnings are likely to be, get them to complete and give you the IR330 and you deduct PAYE. They can claim a credit at the end of the year if necessary.

Students still at school can claim a tax credit of $245.70 a year at the end of the tax year. Instead of the student having to wait till the end of the year to claim the credit you can reduce their PAYE by $4.72 a week. Just show the reduced amount of PAYE on your employer monthly schedule.

Tertiary Students

When employing university, polytechnic or any other type of student, they must complete an IR330 and you must deduct PAYE or tax on schedular payments, from payments made to the student.

Other Staff

For all other staff you need to get a completed Tax code declaration (IR330) and you must deduct PAYE or tax on schedular payments, from payments made to the employee.

 

 

PUTTING YOUR INVESTMENTS IN THE NAME OF YOUR CHILDREN

We have noted some instances of parents who have money to invest and who put this money in the name of children  and therefore Resident Withholding Tax is deducted at a low rate on the interest earnings (as they have no other income)

Is this legitimate?

The IRD answer to this is:    "It is not legitimate for a parent to invest their own money in their children's names in order to pay a lower rate of Resident Withholding Tax " 

 

KIWISAVER- EXEMPTIONS FROM AUTOMATIC ENROLMENT RULES

At times you may employ temporary or casual employees. If the employee is employed for 28 continuous days or less you don't need to enrol them in KiwiSaver.

Here's a quick refresher about who's eligible for KiwiSaver and the enrolment process.

You must automatically enrol eligible new employees who aren't already members. They must be:

  • at least 18 and under 65 years old, and
  • a New Zealand citizen or entitled to remain in New Zealand indefinitely.

Within seven days of starting, check whether your employee is eligible to join KiwiSaver and give them a KiwiSaver pack (you get this when you order the KS3, call IRD at 0800 257 773 to order one). The pack includes:

If you have an employer-chosen KiwiSaver scheme you must advise new employees in writing that you've chosen a scheme and they'll be allocated to it unless they choose their own KiwiSaver scheme. You must also give them your scheme's investment statement.

You'll need to send IRD the full names, IRD numbers and addresses of any new employees you're automatically enrolling, using the KiwiSaver employee details (KS1) form. You can send IRD the KS1 form electronically if you're registered for ir-File.

View a demonstration or register for ir-File

Please fill in a KS1 form every time an eligible employee is enrolled in KiwiSaver, even if they want to opt out.

Employees Exempt from Automatic Enrolment

You don't have to automatically enrol an employee if they:

  • are under 18 years old (they can join by contracting directly through the scheme provider)
  • are over the age to qualify for New Zealand Superannuation, currently 65
  • are a casual agricultural worker, election day worker or private domestic worker who pays their own PAYE
  • are employed on a temporary employment contract of 28 continuous days or less
  • are casual employees engaged on an irregular and intermittent basis and who receive holiday pay with their wages
  • are on paid parental leave or ACC
  • stay on the same payroll:
    • when a business is taken over or amalgamated, or
    • if they relocate with the same employer
  • only receive schedular payments
  • aren't a New Zealand resident
  • don't normally live in New Zealand (unless they're a government employee working overseas)
  • aren't required to have PAYE made from their salary or wages
  • revert to an employer they were seconded from, straight after the secondment has ended.
McLEAN AND CO KNOWLEDGE CENTRE AND ARTICLES ABOUT TAXATION AND BUSINESS IN GENERAL PRESS HERE FOR BUSINESS STARTUP KNOWLEDGE CENTRE PRESS HERE
FOR INFORMATION ABOUT COMPANY INCORPORATION PRESS HERE FOR PREVIOUS MONTH EMAIL NEWSLETTERS PRESS HERE

FOR PROPERTY INVESTMENT AND TAX INFORMATION PRESS HERE

FOR FRANCHISE INVESTMENT AND TAX INFORMATION PRESS HERE

The information provided in this email newsletter is for informational purposes only.   McLean and Co. accept no responsibility for the opinions and information expressed in the information provided and it is provided "as is" without warranty of any kind.    The user assumes the entire risk as to the accuracy and use of this document.   Readers are asked to seek professional advice pertaining to their own circumstances.    The McLean and Co. email newsletter may be copied and distributed subject to the following conditions:
  • All text must be copied without modification and all pages must be included.
  • This document must not be distributed for profit.    

 

If we can assist further, please email McLean and Co as follows:

 CONTACT McLEAN AND CO. BY EMAIL BY CLICKING ON THIS LINK

BACK TO HOME PAGE