Below is a snapshot of some recent tax updates that come into force in the future as well as proposed tax updates that may affect you and your business.
Employment Law changes
· Increase in the minimum wage rates will apply from 1 April 2019
* Starting-out applies to employees aged 16 to 19 entering the workforce for the first time
** Training applies to employees 20 years and over who are involved in relevant industry
training to become qualified.
Certain requirements apply to both Starting-out and Training wage rates.
- Trial periods will only be available to small-to-medium sized employers (fewer than 20 employees at the time the employment agreement is made) from 6 May 2019. These still need to be included in the offer letter and/or the Employment Agreement to be enforceable.
- Minimum time periods for rest and meal breaks come into force from 6 May 2019. When these rest and meal breaks are taken is a mutual agreement between the employer and the employee. If a mutual agreement cannot be reached, then the meal break must be in the middle of the work period and the rest periods at halfway points between the beginning, meal break and end of the working day.
- New protections for employees experiencing domestic violence come into force from 1 April 2019. For employees affected by domestic or family violence, which includes both the perpetrator and the receiver, an employee is entitled to request a short term (two months or less) variation to their working conditions which could include hours of work, days of work, place of work etc. And when an employee has been employed for 6 months or more, then 10 days paid domestic violence leave are available.
- Changes to KiwiSaver which will come into force from 1 July 2019 (still awaiting Royal Assent) that include:
- Adding additional Employer Contribution rates of 6% and 10%
- Reducing the maximum contribution holiday from 5 years to 1 year, which will also change its name to “savings suspension”.
Proposed taxation changes
- Changes around the supply of low-value imported goods to consumers in NZ. For imported goods valued at or below $1,000 the supplier will be required to be registered for GST, provided the registration criteria is met, and return GST to the Inland Revenue Department (proposed to apply from 1 October 2019)
- Changes to the Ring-fencing of residential property deductions. Intended to ensure investors will no longer be able to deduct expenditure relating to their loss-making residential investment properties from their other income such a wages or salary and business income. The rules will apply on a portfolio basis however if elected the taxpayer may apply the rules on a property-by-property basis (proposed to apply from 1 April 2019)
- The Tax Working Group has recently released its recommendations in regards to the suggested Capital Gains Tax which could apply from 1 April 2021 and will tax the gain made on the disposal of assets for items such as land, shares, investment properties or second family home properties, businesses, farms, protected property but does exclude the family home and personal assets. To determine the gain, a valuation will need to be obtained at 1 April 2021.
Continuation of the IRD Business Transformation project
The second part of the roll out of the new myIR tax system is due to be launched. This part focuses on business income taxes and includes PAYE and some enhancements that you may not currently see on myIR.
myIR will be unavailable from 3:00pm Thursday 18 April through to 8:00am Friday 26 April 2019 while the IRD transitions from the old platform to the new. From 26 April 2019 when you log into your myIR account, the home page will look different.
We understand that the new myIR will provide more functions to taxpayers, including a lot of what we are responsible for. We do ask that you only attend to what you know. If you are unsure then please ask one of our Accounting Specialists for assistance.