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A reminder, you are no longer able to use investment losses such as from rental properties to reduce your income for working for families (WFF) tax credit.

The definition of income now also includes an extra nine types of income:

  1. Attributable trustee income
  2. Attributable fringe benefits
  3. PIE income other than registered superannuation schemes such as Kiwisaver and retirement benefit schemes
  4. Passive income earned by children (includes interest, dividends and rent). Amounts over $500 per child will be included as family income
  5. Worldwide income received by a non-resident spouse
  6. Tax exempt salary or wages under specific international agreements
  7. Income equalisation deposits made by you, your trust or a company controlled by you or your trust
  8. Certain pension and annuities - includes 50% of payments from life insurance policies or a superannuation fund (excludes NZ super)
  9. Other payments received from any sources that are used for your family's day-to-day living expenses (but only if the total amount from those sources is more than $5,000). An example of this might be board received.

In future, when you apply for WFF tax credits, you'll need to let IRD know about amounts from any of the above sources.

For those clients who receive or are entitled to WFF credits, when we prepare your tax return we'll need to request the above information.

Renting your beach house out?

New rules on claiming expenses for mixed-use assets such as holiday homes (assets being used both privately and for earning income) have been passed in to law.

Previously expenses have been subject to a private to business ratio (including when the asset was available for use even if it wasn't being used). The new rules restrict the deductibility of this expenditure by limiting the expenditure allowed for the period that the asset is available for use and not used.

Even though these rules have just been enacted, they actually apply from 1 April 2013. If you own any assets such as a holiday bach or a boat and rent these out during the year, please come and talk to us. The government has publicly stated they are expecting an extra $50m in revenue from these new rules, so they will be enforced.

Call us on (09) 576 4166 for assistance.

Whether you're planning a new product, a new business venture or simply brainstorming, here are some tips to help boost creativity and innovation within your business:

1. Don't assume the current way is the right way. Challenge long standing processes that are currently used within your business and promote evolution of new systems and ideas for your business. Be a innovative as you like.

2. Ask the questions - what are you doing and why? Don't stray from your original mission unless it's clear the new route will be beneficial. Always align your tasks with your goals but make sure you assess these regularly so you know what you're doing and why. It's a form of tracking.

3. The first solution may not be the most effective.  Hurrah you found one! But don't stop there. Refine it to ensure it's the best solution, test it, put it to use and then adapt as necessary.

4. Meet new people in new industries.  It's amazing what happens beyond your bubble. Open yourself for new viewpoints and creative avenues that could relate to your business. Find out about business networking evenings in your area and go along. Take team members that you think might be interested in what's being presented; you may be surprised at what you learn about other industries.

5. Inspire the team  with real business success stories. Encourage them to learn and relate. Invite guest speakers to team meetings or watch inspirational clips together on YouTube.

6. You can't learn less.  Regularly research new ideas or possibilities. You never know what will trigger a fantastic idea. Most of this can be done online through social media, but encourage brainstorming and team input on project or product business possibilities.

7. Don't bury issues - celebrate them. Make problem solving fun and have the team break from their daily tasks to brainstorm. You could learn a lot from their fresh perspectives ad they'll enjoy being part of the decision making process.

8. Your employees are your first/most important customer. Treat them with the necessary respect and value their opinions.

Changes to online tax returns

The IRD have made changes to the way you file your GST returns.

In September last year the IRD introduced the eGST filing service. Now the decision has been made to remove the ability for the public to access the standard online form, meaning customers will need to change their filing methods and register to file their returns through MyIR.

The IRD will have sent a letter to all clients in July notifying them of the change. In addition to this a new GST email service has been established to alert customers registered with My IR that their GST return is available, three days before it's due.

If you are having difficulty with this change please call us on (09) 576 4166 as we are able to assist with preparing and filing your GST.

What is RSS?

RSS is short for Rich Site Summary or Really Simple Syndication. RSS feeds allow you to subscribe to news, blogs or websites without having to regularly check back to see if the content has been updated. Instead, when an update is made, a link is sent directly to your email address to notify you. It's a great way to stay informed on your favourite sites, without being bombarded with regular e-newsletters.

A recent change in legislation introduced new rules on the tax treatment of lease inducement payments and surrender payments. From 1 April 2013, such payments are deductible for the payer and taxable for the recipient and are subject to spreading rules.

If you are negotiating or renewing commercial leases, we recommend talking to us to ensure any tax considerations are correctly taken into account.

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