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John Rowe

APRIL IRD UPDATES: Changes Affecting Individual Taxpayers, Kiwi Saver and Businesses

There are significant changes that the government has introduced that will affect nearly everyone, especially those who are individual taxpayers, part of Kiwisaver, or business owners.

Read below to find out more.

Changes Affecting Individual Taxpayers:

  1. The 33c in the dollar personal tax rate threshold rises from $40,000 to $48,000.
  2. The rate of tax paid in the top personal income bracket, which starts at $70,000, has reduced from 39c in the dollar to 38c.
  3. A new Independent Earner Tax Credit (IETC) will return $10 a week to people earning between $24,000 and $44,000 who do not receive a benefit, Working for Families tax credits, or New Zealand
  4. The IETC will be abated at 13c for every dollar earned over $44,000.

Changes to KiwiSaver:

  1. The minimum level of employee contributions has dropped from 4 percent of gross salaries to 2 percent.
  2. The member fee subsidy of $40 a year has ceased.
  3. The minimum level of employer contributions will stay at 2 percent. The tax-free threshold will also stay at this level.
  4. The employer tax credit will cease.

Changes Affecting Businesses:

  1. Significant changes have been made to provisional tax – see separate article.
  2. The threshold for qualifying for the GST payments basis has increased to $2 million in annual revenue from $1.3 million.
  3. The GST registration threshold has increased to $60,000 from $40,000.
  4. The GST six-monthly return filing threshold has been raised from $250,000 to $500,000.
  5. Businesses with $10,000 or less of annual business-related legal expenditure can now deduct the amount regardless of whether it related to capital expenditure (for example conveyancing fees).
  6. The PAYE once-a-month filing and payment threshold has be raised to $500,000 in employer PAYE deductions from $100,000.
  7. The Fringe Benefit Tax annual filing threshold has been raised to $500,000 in PAYE deductions from $100,000.
  8. The value of minor fringe benefits that can be provided to employees without attracting FBT has increased to $300 a quarter per employee from $200, and $22,500 a year per employer from $15,000.

Please contact us if you would like help to understand how these changes affect you personally and your business - if applicable.

John Rowe
Business Accounting Services
© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
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