Use of Money Interest and provisional tax

Provided you pay provisional tax on what is called the standard basis (based on 5% increase over last year) there is no liability for Use of Money Interest for the first and second provisional tax instalments. 
However, any short-paid tax, when the figure has been worked out based on your profit for the year, is subject to Use of Money Interest at 8.22% running from 7 May 2019 for 31 March balance dates. 
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Get end-of-year right

IF YOU want to write off a bad debt and claim your loss in the current year, you must do this before your business balance date. 
Depending on your system of accounting, this could involve writing something like “debt written off by me on. . .  Date signed. . . .” across a copy of an invoice. If you have a more sophisticated system, you will need to make it clear the debt has been written off in time.
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2019 Tax Calendar

January 15

Second instalment of 2019 Provisional Tax 
(March balance date except for those who pay Provisional Tax twice a year)
Pay GST for period ended 30 November 2018
April 8

Terminal tax for 2018

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Tax on crypto-currencies

Inland Revenue is giving a lot of thought to taxation issues, which affect crypto-currencies. 

They see these as property and not currency. Therefore, capital gains and losses from fluctuations in value would not apply. 
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Be systematic when setting up a business

You need a systematic approach if you are setting up a new business. 

Jack had been made redundant and decided to have a go by himself but wasn’t sure where to start. 
We suggest this sequence:
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Modernising individual’s income tax

Inland Revenue is proposing to get more involved with taxing individuals in the following ways:

  • Helping them to use the most appropriate tax rates and codes
  • Tailored tax codes to improve the way secondary and irregular income is taxed
  • Year-end tax obligations for individuals will be simplified
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Capital gains tax

A capital gains tax, before the end of this Government’s term, is starting to look like a real possibility.

The current indication from the Tax Working Group is for the entire profit from a capital gain, such as the sale of a farm, business, shares in a company, rental property et cetera to be treated as income and added into your tax return. This would seem particularly harsh when compared with the Australian system which takes half of the profit and puts it in your tax return.
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Five key features of KiwiSaver changes

The following changes to KiwiSaver are proposed to be effective from 1 April 2019.

  • Additional KiwiSaver contribution rates of 6% and 10% 
  • Maximum contribution holiday to be reduced to one year 
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