Following the result of the election and current tax commentary we're expecting to see the following changes:
- The new top personal tax rate of 39% for income earned above $180,000 applying from 1 April 2021.
- 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.
- Increased IRD disclosure requirements for trading trustsfrom the 2021 tax year.
- 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)
- Closing loopholes so multinational corporations pay their fair share
- 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