Welcome to the Vision Accounting e-newsletter for May 2015. This is a great way for us to share important information you need to know, helpful tips and hints and practical resources to help you in business for 2015.
What's very Important?
Better safe than sorry . . . Are you prepared?
You may have noticed that Inland Revenue (IRD) has been featuring in the media quite a bit lately. Reported to have received additional funding, it has resulted in a sharp increase in audit activity and now, more than ever before, individuals and businesses are at risk of being selected for a random audit, enquiry, investigation or review.
If your business or individual return is subjected to a random audit, enquiry, investigation or review you are responsible for the professional fees involved in us providing the required information. Even the simplest enquiry can require hours of our work. In some cases, when there are complex environments, unusual circumstances, multiple years or multiple companies and trusts, thousands of dollars in accounting and legal fees can be incurred.
We have responded to this growing threat by finding you the most comprehensive tax audit insurance available and are pleased to offer to you and your business our Audit Shield Master Policy. The Audit Shield Master Policy is fully tax deductible for businesses and self-employed providing you with peace of mind in relation to audit, enquiry, investigation and review associated costs. The features of this are:
- Our accounting fees in responding to audits, enquiries, investigations and reviews of your lodged returns, including those from previous years are covered.
- Specialist’s professional fees if we need to engage a tax expert or lawyer for an opinion or defence are covered.
- Cover commences from as little as $185 pa (inc GST) for a sole trader or partnership.
You will soon be receiving a letter from us explaining the policy and inviting you to participate under our Audit Shield Master Policy. Should you have any queries in relation to the offer we encourage you to contact our office upon receipt of the letter.
What You Need to Know
What changed on 1 April 2015
The minimum wage will increase to $14.75 per hour. Training and starting-out minimum wages will increase to $11.80 per hour.
The amount of child support some parents pay or receive may change. Inland Revenue’s new formula for calculating child support now includes both parents' incomes and circumstances, and recognises a wider range of care.
KiwiSaver HomeStart Grant replaces the KiwiSaver First Home Deposit Subsidy. Under the HomeStart Grant, member tax credits will now be able to withdrawn from KiwiSaver savings, which will now mean first home buyers are able to withdraw amounts from their KiwiSaver savings (except for the $1,000 kick-start). It should also be easier for more people to buy a newly built home as the grant for newly built homes has increased from the previous level of the First Home Deposit Subsidy. House price caps which determine the eligibility for HomeStart grants and Welcome Home loans have also increased.
Student Loan Living Cost
The maximum weekly amount available will increase to $176.86 per week.
To obtain the maximum allowance you must not earn more than $211.96 a week before tax (and you must meet all the other eligibility criteria).
If you are aged 18-23 and have no children, the combined taxable income of both your parents in the last financial year must be under:
- $84,163.86 before tax (if you are living at home while studying)
- $91,448.30 before tax (if you are living away from home to study)
If you have a partner and children, your own and your partner’s combined taxable income needs to be under $882.98 a week before tax. The allowance will reduce for every cent earned above this.
Parental tax credit
For babies born on or after 1 April 2015, the Government will increase the parental tax credit from $150 a week to $220 a week, and extend the payment period from eight weeks to ten weeks. How much you receive also depends on:
- your total family income before tax
- the number of dependent children in your care and how old they are
- the number of newborn children per year
You can either receive PTC or paid parental leave. You can't receive both at the same time. And you can't receive PTC if your family income for the full eight to ten weeks includes an income-tested benefit, NZ Super, a veteran's pension, a student allowance, or accident compensation from ACC (unless you are receiving this for less than three months).
Changes to parental leave
The current 14 weeks’ of paid parental leave will be increased to 16 weeks for babies expected or born on or after 1 April 2015.