March 2024 Business Update
Upcoming Tax Due Dates
08/04/2024 - 2023 Terminal Tax
07/05/2024 - Third 2024 Provisional Tax Instalment
07/05/2024 - Feb/Mar 2024 GST
You will have received an email from us earlier this month with details of any 2023 Terminal Tax Due.
We will be sending out emails over the next month containing details regarding the third installment of the 2024 Provisional Tax Due.
Please contact us if you have any questions about these payments.
Property Tax Updates
Bright-line Test Adjustment: The Government has announced that from 1 July 2024 the bright-line residential property rule will revert to two years. If you sell a property on or after 1 July 2024 the bright-line residential property rule will only apply if the property is sold within 2 years of purchasing it.
Interest Deductibility: Starting from 1 April 2024, interest expense deductions for residential property will be reintroduced, with taxpayers able to claim 80% of expenses. The deduction percentage will increase to 100% from 1 April 2025.
Commercial Building Depreciation: The Government is proposing to remove the ability to depreciate commercial and industrial buildings from 1 April 2024.
Please note, the legislation approving these changes has not yet been passed but is expected to be in the next few days.
For more information, please click the links below:
Minimum Wage Increases
Starting from 1 April 2024, the minimum wage rates will be increased as follows:
Adult minimum wage increases from $22.70 to $23.15 per hour.
Starting-out and training minimum wages increased from $18.16 to $18.52 per hour.
These rates are before taxes and deductions like PAYE, student loan repayments, or child support.
For more information, please click the link below:
Trust Tax Rate Increase
The Government has announced adjustments to trust taxation, by increasing trustee tax rate from 33% to 39%. This is intended to apply from 1 April 2024 for trusts with standard balance dates. This adjustment aligns the trustee tax rate with the highest income tax rate applicable to individuals earning over $180,000, which stands at 39%.
The Government has put forth amendments to tax laws to address the issue of over-taxation of low-earning trusts by implementing a $10,000 de minimis threshold. This means:
Trusts with trustee income below $10,000 would still be taxed at 33%.
Trusts with trustee income above $10,000 would be subject to the higher rate of 39%.
Please note, the legislation approving these changes has not yet been passed but is expected to be in the next few days.
For more information, please click the link below:
Company Vehicles - FBT
Fringe Benefit Tax is generally payable on company owned vehicles made available to employees for private use unless the work-related vehicle exemption applies or another exemption.
The employer must notify their employees in writing that their business vehicle is not permitted for personal use to qualify for the work-related vehicle exemption for motor vehicles provided to employees.
An example vehicle private use restriction letter for notifying employees is on page 9 of the guide in the link below. It is suggested you provide employees with this letter annually to ensure compliance with IRD requirements.
Please contact us if you have any questions, or if you would like us to draft the letter for you.
Childcare Subsidy
The Government has announced FamilyBoost, providing relief for families paying early childcare education (ECE) expenses. Effective 1 July 2024 the scheme offers reimbursement of up to 25% or $75 per week of ECE fees.
Eligibility extends to all families with childcare costs earning up to $180,000, with reductions for incomes exceeding $140,000, based on household income calculated by Inland Revenue using the past three months' reported earnings.
Parents and caregivers can submit ECE invoices every three months via myIR, receiving FamilyBoost as a lump sum refund starting from October 2024.
Full details, including application procedures, will be disclosed on Budget Day – 30 May 2024.
For more information, please click the link below:
GST on Online Marketplace Operators
Effective from 1 April 2024, online marketplace operators (also known as digital platform operators) will be responsible for collecting GST on all listed services offered through their platform.
The listed services subject to the GST changes include:
Ride-sharing and ride-hailing such as Uber
Food and beverage delivery such as Uber Eats and Delivery Easy
Short-stay and visitor accommodation such as Airbnb
Drivers, deliverers and accommodation hosts will need to apply these new rules differently depending on whether they are GST registered or not.
For more details, please click the link below:
Year End Xero Resources
As we approach the end of the 2024 Financial Year on 31 March 2024, Xero has prepared a variety of free resources to assist you in getting reading for this important period.
These resources are designed to help ensure that your financial records are organised for tax time.
Being well-prepared with your Xero data will simplify the process for both you and us when it comes to drafting your year-end financial statements.
To access helpful videos, checklists, and guides click the link below: