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Hi Clients,

It’s been a long time since we sent out an update, we hope you find this one informative and helpful.

If you have any queries or require any further information regarding this update, please do not hesitate to contact us.

Riding out the tough times

Interest rates are soaring, prices for groceries and fuel are rising, and businesses have unreliable supply and cost pressures.

Add staff shortages, and some small businesses are under severe stress.

The natural reaction of many businesses is usually two-fold:
Earn more, and/or spend less.

Spending less is the easier option, but many businesses are already cut to the bone. If you do look at cutting costs, be careful not to apply measures that affect your ability to earn more.

For helpful advice on how to navigate the tough times - click here

The Questionnaire

A number of Clients have been requesting the annual questionnaire sheet to fill out which is a requirement for us to complete your annual accounts.

You can download it from HERE

GST changes a-foot for sharing businesses

Many businesses are using the internet to introduce buyers and sellers to each other – Air B&B, for example. There are many other much smaller enterprises doing the same thing, such as ride sharing.

The IRD department is concerned many of these businesses might be operating below the threshold for the need to be involved in GST.
It has been suggested collectively they are sufficiently significant to offer unfair competition to those who have to register.

Thought is being given to lowering the GST threshold for these types of businesses.

One of the challenges for these businesses is determining tax-deductible costs. One proposal is to have a standard cost for those who earn their income in this way. This might be a better alternative to making adjustments for private use.

We will bring you more information on this subject as soon as it becomes available

Making your online presence more secure

Keeping your business secure online can feel overwhelming.
Especially if your expertise isn’t in tech.

The good news is that implementing just two easy steps can go a long way towards protecting your business accounts from cyber security risks.

The two easy steps are:

  • a long, strong and unique password
  • an extra layer of security, by turning on two-factor authentication (2FA) in the account settings.
To find out about 2FA, how it works and how to turn it on - CLICK HERE

Kiwibank devises simplified scheme

Kiwibank has come up with a great scheme to help its customers.
It is prepared to agree to charge interest on loans it makes on the basis you can set off credit balances in other bank accounts against the balance of the loan. You pay interest on the net balance.

Even better, the other bank accounts may include not only the person borrowing but also other eligible people. Inland Revenue has issued a ruling approving the arrangement.
The new product will be available to individuals and business customers, including companies and trusts.

For tax purposes, this is a much simpler scheme than revolving credit, where it is difficult to establish what interest might be deductible as opposed to what is private and non-deductible.

Residential rentals

You will be aware of the limits placed on claiming a deduction for interest on money borrowed to buy residential rental property.

If you have owned property before 27 March 2021, your claim for interest reduces over time through to 31 March 2025.

For the current year, interest incurred is claimable in full up to 30 September 2021 and for the remainder of the year your tax claim is reduced to 75 percent of the interest you pay.

Just a small point: It is the interest you have “incurred” as opposed to the interest you have paid. Therefore, if you paid interest on 15 October 2021 for the period 16 September 2021 to 15 October 2021, you will see some of the interest relates to the time before 1 October and can be claimed in full.

Please feel free to contact us at KTS if you require any further information about this update, we will get back to you as soon as possible.

Here are our contacts