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Around one in five Kiwis is either invested in cryptocurrency or plans to invest, according to a survey by the Financial Services Council. With so many of us jumping into cryptoassets, it's helpful to understand what our tax obligations are.

Last year Inland Revenue updated its guidance on how these assets are taxed; the IR treats cryptos as a kind of digital property, rather than like it would a traditional currency. You can read more about it here, and some of the basic information is summarised below:

When do you need to pay tax on cryptocurrencies?

When you buy or mine cryptocurrencies, there is no tax to pay. And while you hold cryptocurrencies, there is no tax to pay.

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The post-Covid, globalised economy has created a number of challenges for the average business. Depending on your business purpose and strategy, you may need to either upsize, or downsize, to secure the long-term future of your company.

But what are the implications of scaling up, or scaling down, your operations? And how do you refine your business so it's fit for purpose and ready to take on your new aims and goals?

The answer is to look carefully at your forecasting and your future decision-making.

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Plenty of Kiwi businesses buy utes as company vehicles. If you're in the trades, for instance, a ute can be the perfect way to haul everything around and promote your brand at the same time.

However, the recently announced EV feebate scheme is likely to hit ute buyers the hardest, since these vehicles tend to have some of the highest emissions of any on our roads.

Here are three things to know if you're buying new utes in 2022:

The fee depends on the model

Only the highest-emission models will require you to pay the highest fees. For example, the Nissan Navara is a relatively low-emission ute model and the fee on a new Navarra is forecast at $810. That is considerably lower than the fee of $5175 expected to be incurred by the highest-emission Toyota Hilux model.

Use Driven's Clean Car Calculator to compare models.

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The Man on the Moon Principle

In 1961, President John F Kennedy famously announced his goal of landing a man on the moon and returning him safely to Earth before the decade was out. As we know, in July 1969, Neil Armstrong and Buzz Aldrin became the first people to walk on the moon, and were brought back to Earth safely, achieving JFK's goal.

At a time when most people hadn't even been on an aeroplane, landing on the moon would've felt unachievable and overwhelming. However, such a massive goal united people with a purpose; the story goes that even a cleaner mopping the floor at the space station said his job was to help put a man on the moon. 

So, how did they make the goal achievable? They broke it down into milestones, with each one taking them closer and closer to achieving their ultimate goal.

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It's a little easier to buy a first house after Government policy changes were introduced in March. The major change is that house price and income caps have increased, making a few more buyers eligible for the first home assistance and giving them more leeway on eligible properties.

What can first home buyers access?

Eligible Kiwis can make use of the First Home Grant and/or First Home Loan. They could potentially:

  • Buy an eligible property, below the price cap, with a 5% deposit.
  • Get a $10,000 grant per person for a new build, or $5,000 for an existing home.
  • Withdraw from their KiwiSaver account, potentially taking out all their funds except $1000.

You can find all the details here.

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Most residential rental property owners should be well aware of the Healthy Homes Standards which became law on 1 July 2019.

The healthy homes standards introduce specific and minimum standards for heating, insulation, ventilation, moisture and drainage, and draught stopping in rental properties. 

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Trusts are common in NZ and the reasons for setting them up vary. The Trusts Act 2019 comes into effect on 30 January 2021. Changes to the act aim to make trusts more accessible. There are increased compliance obligations on trustees and duties that ensure greater transparency for beneficiaries.

The changes to the act include:

  • The age of majority (the default age that a person can inherit if not specified) changes from 20 to 18.
  • The maximum duration period of a trust is extended from 80 years to 125 years
  • Obligations on trustees to keep certain information about trusts
  • A mechanism to request the court to review the decisions and actions of trustees
  • Flexible powers for trustees to manage trusts.

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When life gives you lemons, pivot

The world of work has been transformed this year and the only way forward is to adapt. Here are two businesses who rejigged their offering to keep the invoices rolling and who experienced great success.

Bringing home the bacon

Pop-up restaurant founder Stacey Jones from Mount Maunganui describes time in lockdown as a 'tale of two halves' for her business Kitchen Takeover. "It was hard because my seven events sold out in 24 hours before lockdown and they all had to be cancelled. But this was good because it forced me to pivot and move really quickly into something new, which would never have happened if I hadn't had my hand forced."

Stacey decided to package up her pop-up restaurant night into a dinner party box - a fine-dining experience delivered to your door.

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Provisional tax - how does it work?

If you had to pay tax of more than $5,000* in your last income tax return, you may have to pay provisional tax for the following year. Provisional tax is like making progress payments on next year's income tax.

The amount you have to pay relates to your expected profit for the year. In practical terms, the amount of provisional tax you're expected to pay is based on the tax you were liable for on your profit in the previous year. This is often referred to as residual income tax (RIT) and your provisional tax will be based on RIT plus a standard percentage uplift as determined by the IRD.

Even if you are not required to pay provisional tax, you may still elect to do so, to spread your tax obligations over the year. This can help you manage cash flow and take away the pressure of having to find and pay a lump sum of tax at the end of the year.

COVID-19 and provisional tax

With the impacts of COVID-19, many clients are rightly questioning the amount of provisional they should be paying at the first 2021 payment date of 28 August 2020 and asking us to re-estimate the payment amount down.

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We all know that cash is king when it comes to business success, but what exactly is 'working capital' and how does this financial metric help measure the health of your business?

Working capital is made up of the cash and assets that are available in the business to fund your operations and keep you trading. It's worked out by taking your current assets (the things you own) away from your current liabilities (the things you owe to other people).

So, why is working capital such a critical metric?

Having the liquid capital needed to trade

It's possible for your business to be busy, successful and profitable, but for your cash position to still be in poor health – and that can have a serious impact.

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