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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Tool helps track KiwiSaver

The authority has produced a tracker tool to help members compare and contrast fees and returns more easily.

 
Just type “FMA KiwiSaver Tracker” into your search engine and you will get a wealth of information, provided yours is one of the many funds listed. 
 
Quotes from the report include:
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    When is income from professional services derived?

    The Inland Revenue Department (IRD) recently released a new interpretation statement discussing when income from professional services is considered to be derived, and hence becomes taxable. The statement replaces several older IRD Information Bulletin’s and consolidates their view, giving greater detail and more examples.

     

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    Importance of good record keeping

    A recent case Taxation Review Authority (TRA) decision has highlighted the importance of good record keeping. 

     

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    Use of Home Office – New Rules – from 1 April 2017 for March balance dates

    From the beginning of the 2018 tax year the rules for claiming for use at home are changing. 

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    Cashflow management: 7 May provisional tax payment options

    We would like to recommend an IRD-approved service those who are due to pay provisional tax on 7 May might find useful – especially if cashflow is tight after settling terminal tax.

     

    Tax Management NZ (TMNZ) is a payment intermediary that gives you greater flexibility around how and when you make your provisional tax payments, while eliminating IRD late payment penalties and reducing interest costs.

     

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