Following the result of the election and current tax commentary we're expecting to see the following changes:

1. The new top personal tax rate of 39% for income earned above $180,000 applying from 1 April 2021.
2. Integrity measures introduced to support the new 39% rate and address issues like the potential for people to shelter income in trusts to avoid the top tax rate.
3. Increased IRD disclosure requirements for trading trustsfrom the 2021 tax year.
4. Getting the flexi-wage scheme up and running by the end of the year (essentially a wage subsidy programme that assists employers to hire and help people with training or mentoring to gain the skills for a job)
5. Closing loopholes so multinational corporations pay their fair share
6. Sick leave extended from 5 days to 10 days.

In anticipation of the 39% tax rate change, we will contact all clients in the new year that have companies with excess retained earnings to consider declaring dividends before 31 March 2021.

If you think this will have an effect on you, contact us to have a chat

It's difficult for Sole Traders, Contractors & Freelancers to get a good online Cashbook, so Xero have announced an updated small business starter plan. The starter plan is targeted to help get small businesses using an online accounting software without the added cost of the full Xero Package.

We offer free training to all of our clients, so you can feel confident knowing how Xero works and how to use it to it's full advantage.

Book a free consultation to find out if this plan is right for you.

A temporary loss carry-back scheme has been introduced to support customers in the current uncertain economic environment. The commentary to the Bill can be found here.

Businesses expecting to make a loss in either the 2020 year or the 2021 year can use that loss to offset profits they made the year before. In other words, they can carry the loss back one year to the preceding income year. This can be done before the loss year return is filed.

You must let us know if you are going use the loss carry-back scheme. You can do this in the ‘I want to’ section of your income tax account in myIR.

There are two ways to claim your loss carry-back:

• Include the carried back loss in your tax return – we will automatically refund any overpaid tax.
• Ask for a refund of any provisional tax you have paid for 2020 if you are going to carry back a loss from 2021.

We can refund some or all of the tax already paid for the preceding year before the loss year has finished by enabling customers to estimate their loss. Refunds will be processed a lot faster if you use myIR.

You do not need to rush to re-estimate your 2020 provisional tax. You can re-estimate up until when your return is filed or due. This gives more time to work out any estimated loss for the 2021 income year.

Shareholder employees of companies electing into the loss carry-back scheme also have up until when their return is filed or due to re-estimate their provisional tax.

If you do not elect to carry your loss back, it will still be available to carry forward as normal.

If you elect to carry back only part of the loss now, you can carry back the remainder anytime later in the year up until your return is due. Any balance remaining can be carried forward.

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Business planning is essential in today’s environment. Our Business Planning service will provide business owners with professional support and advice to help minimise impacts COVID-19 will have on their business.

We can support business owners by developing a plan of how they will operate over the coming months and how to maximise entitlements to Government and other support that is available. Our one on one consultation sessions will let us examine your business operations, risks and goals. We will look at financial strategies and risks, cashflow management, employment issues and building resilience in your business through the COVID-19 Pandemic.

We will also incorporate a marketing action plan with online strategies and tactics.

Your business plan will be developed from these discussions, and you will have a clear understanding of the actions you need to take. It will act as your own customised guide to manage the sustainability of your business into the future.

Outcomes and benefits
• Understanding your current financial position
• Identifying how to optimise growth, profitability and cashflow in your business
• Cost cutting measures
• Strategies to achieve short, medium and long-term financial goals
• Provides a tool to communicate the business goals with your business team
• Cashflow analysis and management
• Developing a budget and forecast
• How to rebuild and relaunch your business
• Marketing action plan
• Determining if re-financing is required