All text must be copied without modification and all pages must be included.
This document must not be distributed for profit.
Changes to Property and IRD Number Rules
Changes to Employee Allowances
Changes to Vehicle Mileage Rate
Calculating Business Motor Vehicle Use if you're Self Employed
A number of property tax rules Government proposed as part of Budget 2015 have just been passed into law and will apply from 1 October 2015.
In brief, here's what's changing from 1 October 2015:
When buying, selling or transferring New Zealand property:
People buying, selling or transferring property will provide the information above to their Property Lawyer or Conveyancer. They may choose to do this by filling in a Land Transfer Statement, which will be available on Land Information New Zealand (LINZ) website.
Some people will be partway through the process of buying, selling or transferring a property on 1 October 2015 when these new rules come into effect. These new rules will not apply where the:
On 1 October 2015 offshore people and entities must have a fully functional New Zealand Bank Account before applying for an IRD Number. A fully functional Bank Account is one where:
To collect this information, on 1 October IRD will introduce two new IRD Number Application Forms for people who are non-residents and offshore, one for individuals and another for companies, trusts, partnerships and other entities.
There have been changes to the tax treatment of the accommodation, meal and clothing allowances that you may provide your employee(s).
Use the IRD Employee Accommodation and Meals Calculator to help you work out whether employee accommodation and meals you provide are taxable or not.
To find out more about these changes, including if you can retrospectively apply the new rules, visit the IRD "Allowances" section
CHANGES TO VEHICLE MILEAGE RATE
IRD has recently concluded a review of the Commissionerís mileage rate and advises the rate for the 2015 income year results in a reduction to the rate to 74 cents (from 77 cents for 2014) per kilometre for both petrol and diesel fuel vehicles.
You can use this rate for up to a maximum of 5,000 km of work-related travel per year. For distances greater than 5,000 km, you must keep a record of actual vehicle expenses.
The rate applies irrespective of engine size or whether your vehicle is powered by a petrol or diesel engine. The mileage rate does not apply to motor cycles.
CALCULATING BUSINESS MOTOR VEHICLE USE IF YOU'RE SELF EMPLOYED
There are three ways you can calculate the proportion of business use of your motor vehicle:
If you believe your vehicle costs are higher than the rates given you can use the actual costs option.
You can claim deductions on your actual costs including depreciation loss for the business use of your motor vehicle. If you use this method you must keep accurate records including details of private and work-related expenses. Your records will need to show the reasons for and the distances of journeys for business travel.
You can also work out the business use of your vehicle by keeping a logbook for at least 90 consecutive days. After 90 days you can work out the average proportion of business to private use of your vehicle. The logbook term is up to three years, provided variance of business use is less than 20% of the logbook representation.
The logbook must record the:
You can use your logbook to calculate the deduction for the costs you incur and the amount of depreciation loss for the business use of your motor vehicle.
The deduction for costs of using a motor vehicle is limited to the lesser of:
|TOTALACCOUNTING 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|
If we can assist further, please email TotalAccounting as follows: