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April 2011 - Issue 3
In this Issue:
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| Tax changes for 2011/2012 There have been changes to qualifying company rules and the introduction of a new tax entity called a look-through company - These changes take effect from 1 April 2011.
LAQCs will no longer be able to attribute losses to shareholders and this will affect all existing QCs and LAQCs. If you would like to know more about these changes and how they effect you, please give us a call and we can discuss your options in detail. |
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| Investment property changes The 2010 Budget introduced changes to the depreciation rate of buildings. These changes come into effect from the 1 April 2011 for 31 March balance date. Key features include:
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| Tax rate changes on savings and investments Banks and other financial institutions have reduced RWT (resident withholding tax) rates on interest from 1 October 2010 to align with the new personal tax rates. Your bank or financial institution will apply the new rates for you automatically. Please check to ensure the correct tax rate is applied and if not, contact your bank or financial institution. |
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| New minimum wage rates The minimum wage rates rose on 1 April 2011 from $12.75 to $13.00/hour. The trainee and new entrants’ minimum wages increased from $10.20 to $10.40/hour. For more information on minimum wage rates click here. |
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| Public holiday entilement - Easter 2011 and ANZAC Day Easter: The public holidays over the Easter period are Good Friday and Easter Monday. Employees who normally work on these days will receive a paid day off, and if required to work, will receive time and a half for the hours worked on those days, plus an alternative holiday if the day is an otherwise working day for the employee. Easter Sunday is NOT a public holiday. This means that there is no entitlement to a paid day off or time and a half for hours worked on this day under the Holidays Act 2003. Good Friday and Easter Sunday are also restricted trading days, which means that most shops selling goods must remain closed on these days. For more information on Shop Trading Restrictions, click here. As Easter Sunday is not a public holiday, employees affected by closures on Easter Sunday cannot rely on payment under the Holidays Act 2003, and must therefore rely on their employment agreement. ANZAC Day and Easter Monday: In 2011, ANZAC Day and Easter Monday fall on the same calendar day. This results in the simultaneous observance of two public holidays. ANZAC Day (25 April) is observed on the day it falls and is never “Mondayised” or transferred to any other day. An employee who normally works on this day will receive ONE paid day off, and if required to work will receive time and a half, and ONE alternative holiday if the day is an otherwise working day for the employee. ANZAC Day is also a restricted trading day until 1:00pm on 25 April. Easter Monday (under normal circumstances) is not. Because the two public holidays coincide, businesses will still be required to comply with shop trading restrictions and (unless they fall within the allowable exemptions) will be required to remain closed until 1:00pm on Monday 25 April 2011. |
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| Changes to the Holidays Act
The Government recently made SOME CHANGES to the Holidays Act, most of which come into effect from 1 April 2011. It’s important for employers and employees to be aware of the changes and how they may affect their income tax deductions and entitlements. The main changes include:
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| Earthquake Support Subsidy (ESS) Extension Employers could apply for up to six weeks from 22 February to 4 April 2011. Application closed on Monday, 4 April 2011. If you did not applied by this date you will not be eligible for support under the ESS. The extension covers a further two weeks, 5 to 18 April 2011. The last day for applications is 18 April 2011. Employers who have business interruption insurance should contact their insurance company in the first instance. If insurance payments will be delayed, employers can access the Earthquake Support Subsidy extension to cover the intervening period, but will be required to repay it when the insurance payment is received. For more information regarding the Earthquake Support Subsidy click here. |
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| Useful Earthquake related websites: Click here for a list of websites. |
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| Tax treatment of earthquake disposal or demolition costs Following the September 2010 earthquake in Canterbury, legislation was amended to allow a more accurate tax treatment of asset disposal costs, including demolition costs. For some assets, disposal costs were already recognised, but where the asset was insured there were difficulties. A law change now allows gross disposal proceeds (excluding GST) to be reduced by the costs of disposal (excluding GST) for all assets, not just uninsured assets. Click here to see an example. |
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| Staff News On a happy note we wish to congratulate Lauren Deans who gave birth (in February!) to Gemma. Children have neither past nor future; they enjoy the present, which very few of us do. Jean de la Bruyere |
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| Insurance Insurance is at the fore front for many businesses at present. Do you know if you are adequatley insurered, do you need to review this going forward? We recommend Ian and the team at advicefirst.
When you or your staff can't work
- we'll help keep things 'BUSINESS AS USUAL’.
ARE YOU CONFIDENT THAT BOTH YOUR PERSONAL & BUSINESS ASSETS WILL BE
PROTECTED AND THE OWNERSHIP OF YOUR BUSINESS REMAINS YOURS IN THE EVENT OF SICKNESS, INJURY OR DEATH? Unsure & would like a second opinion?
Contact Ian Wallace (AdviceFirst Canterbury) for a free consultation today.
0800 GETADVICE, 027 280 3016
ian.wallace@advicefirst.co.nz
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