Our July Newsletter includes tax updates that came into effect on July 1st, as well as recent Inland Revenue statements.
A friendly reminder: If you haven't already, please provide us with your 2024 accounting information so we can complete your accounts. To make this process simple and easy, we have created an online checklist for you to fill out.
2024 Annual Accounts
Provide us with your information
We are ready to begin working on your accounts for the year ending 31 March 2024.To proceed, we need you to complete our end-of-year checklist and supply any accounting details that we do not already have access to.
Please use the following link to complete our annual online checklist and upload any relevant documentation.
July 1st Changes Now in Effect
Several changes took effect on 1st July, including the following:
FamilyBoost has been passed into law, and a decision support tool and authenticated calculator is available on the IRD website here.
Paid Parental Leave Rates Increased. Read here.
Government Contribution to KiwiSaver: A government contribution of 3% to KiwiSaver is now available when a paid parental leave recipient contributes to their KiwiSaver. Read here.
Brightline Test: The brightline test now applies to properties sold within 2 years, and a decision support tool is available here.
New Excise Duty and Levy Rates for Alcohol. Read here.
Inland Revenue Statements and Guidance
Paid Parental Leave Rate Changes
From 1st July 2024, paid parental leave payments will increase for eligible employees and self-employed people from $712.17 to $754.87 per week before tax.
The minimum rate for self-employed people will increase from $227.00 to $231.50 per week. This is equal to 10 hours of work per week, at the adult minimum wage.
CPI Adjustments
On 30th May 2024, Inland Revenue updated three standard-cost amount CPI adjustments:
DET 19/01 Household Boarding Service Providers: Weekly standard cost (per boarder): $231
DET 19/02 Short-stay Accommodation: Daily standard cost (for each guest): Owned dwelling $61; and Rented dwelling: $55
OS 19/03 Square Metre Rate for the Dual Use of Premises: $53.10
Closed Accounts for Deceased Customers
On 29th May 2024, Inland Revenue changed how accounts are managed for deceased taxpayers. Inland Revenue advises that when the account is ceased, credits will remain visible on the account for 12 months.
Bright-line Test
If you sell a residential property, any profit will be taxable if it is sold within a set period, the bright-line period, unless an exclusion or rollover relief applies.
This also applies to New Zealand tax residents who buy and sell overseas residential properties. Use the Property Tax Decision Tool to check if your property sale is taxable under the bright-line test.
For property sold on or after 1 July 2024, the bright-line test looks at whether your bright-line end date for the property is within 2 years of your bright-line start date.
For property sold before 1 July 2024, different timeframes apply.
Tax Bracket Changes
A reminder that the government has adjusted the personal income tax thresholds, effective from 31 July 2024. These changes aim to provide tax relief, but requires employers and payroll providers to update their systems.
New Tax Thresholds:
The 2024/25 tax year will be a "composite" year, meaning that tax obligations will be averaged across the year. This may result in some employees having a tax liability or credit based on their income distribution throughout the year.
Employers should ensure their payroll systems are updated by 31 July 2024. Any errors can be corrected in subsequent pay periods.
To read more about this change, we have covered this in detail in our June Newsletter, you can read it here:
Important Dates This Month
22nd July Quarterly FBT return and payment due.
31st July
New Income Tax Brackets come into effect.
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