Hello to all KTS Clients,
Its already June, halfway through the year, only 6 months left till Christmas!
This update deals with:
- The changes made to the tax system in the Budget 2024
- Trust tax rates
- Family Boost – what is it?
- Changes to food and beverage naming restrictions
- Sole traders check list
If you require any further advice or have any concerns about your financial situation please reach out to us at KTS.
A reminder to Clients from our office.
Thanks to all Clients who have already got their work to our office nice and early.
We encourage all other Clients to get their work into us as soon as possible, to enable us to complete your accounts.
We work on a ‘first- in- first served’ basis, so the sooner you get your work to us the sooner we can complete it.
Don’t forget to include the questionnaire which we require to enable us to work on your accounts.
Click here to go to the questionnaire
Tax relief – Budget 2024
The Government has announced changes to the tax system in the recently announced budget 2024
What is changing?
The Government is increasing personal income tax thresholds, expanding eligibility for the independent earner tax credit, increasing the in-work tax credit and introducing FamilyBoost.
Personal income tax thresholds have been increased to recognise that wage growth over time has pulled more people into higher tax brackets. Increasing the thresholds reduces income tax for people earning more than $14,000 per annum. It is the first reduction in personal income tax since 2010.
The upper limit of eligibility for the independent earner tax credit has been extended to recognise wage growth. This will help an estimated 420,000 additional people by up to $20 per fortnight.
It is important that low-to-middle-income working families get the support they need, so families receiving the in-work tax credit will get up to an extra $50 per fortnight, supporting an estimated 160,000 families.
The new FamilyBoost payment will help an estimated 100,000 families with young children meet the costs of early childhood education.
Family trust tax rates
Avoiding 39% tax in family trusts
As you will probably know, trusts are to be taxed at 39% if their income exceeds $10,000.
It is reasonable to expect a large number of trusts will have exactly or almost exactly $10,000 of income because the tax rate will be 33%. Be aware if you go just one dollar over the $10,000 threshold, all of the trust income is taxable at 39%.
Inland Revenue has issued a statement explaining what it will accept as legitimate tax avoidance and therefore acceptable.
Family Boost – what is it?
Family Boost has been introduced in the budget 2024
What is it, and how does it work?
Family Boost has been introduced to help pay early childhood education fees.
- It starts on the 1 July 2024.
- It pays 25% of early childhood education (ECE) fees with a maximum of $75 a week.
- Payments are to be subject to application and will be refundable quarterly. If you have youngsters going to preschool, be sure to find out about this and get your application sorted out.
- You pay for the first 20 hours and the subsidy kicks in after that. If there is any MSD childcare subsidy, this has to be used up before FamilyBoost kicks in.
- If the family income exceeds $140,000, the subsidy starts to reduce. Families are no longer eligible when income reaches $180,000.
- Keep the invoices from childcare. They need to be submitted to Inland Revenue through the Inland Revenue website, MyIR
You can find details of how to apply on the IRD website via this link https://www.ird.govt.nz/working-for-families/applying
Changes to food & beverage naming rules
If your business is in the food and beverage sector, some of the names used to describe cheese, processed meats, beer, wine and spirits, and some other products are now restricted.
For example, there’s new rules around using terms like Feta, Ouzo, Sherry or Prosciutto di Parma to describe your products.
These restrictions on using certain terms in trade for some specific food and beverages start from the 1st May 2024.
Sole Traders
If you are a sole trader or thinking of setting up as one, there are a few things you need to be aware of.
There are four areas that are important to understand when you’re a sole trader or thinking of becoming a sole trader.
The four areas are:
- Getting started as a sole trader – registering for myIR, myACC and other information.
- Finances – Essential tasks – filing your tax return and other essential tasks.
- Business paperwork – filing the right information in the right way.
- Hiring staff – what to do if you want to bring on staff.
Business.govt has prepared a check list which you can use when setting up as a sole trader. It will also help you if you are already a sole trader and want to check you have set yourself up correctly or are thinking of hiring people.
