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McLEAN AND CO.
Putting Your Investments in the Name of Your Children
KiwiSaver- Exemptions from Automatic Enrolment Rules
Grooming your Business for Sale at the Best Possible Price
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.
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:
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.
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.
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:
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.
Please fill in a KS1 form every time an eligible employee is enrolled in KiwiSaver, even if they want to opt out.
You don't have to automatically enrol an employee if they:
GROOMING YOUR BUSINESS FOR SALE AT THE BEST POSSIBLE PRICE
Some suggestions as to grooming your business for sale at the best possible price:
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