Resouces & Useful Information:

  • Provisional Tax

    If during the year you have earned income that has either not been taxed, or not enough tax has been deducted from it, and your Residual Income Tax (RIT) is over $2,500, then you are liable for Provisional Tax for the following tax year. If your balance date is 31 March and you make 3 instalments in the year your instalment dates are:     •First instalment    28 August     •Second instalment  15 January     •Third instalment   7 May If your balance date is 31 March and you make 2 instalments in the year, your instalment dates are:     •First instalment    28 October     •Second instalment  7 May

    Tax Rates - Individuals

        •Taxable income up to $14,000    10.5%     •Taxable income from $14,001 - $48,000   17.5%     •Taxable income from $48,001 - $70,000    30%     •Taxable income over $70,001  33%


    Tax Rate - Company

        • Flat rate of 28%


    Tax Rate - Trust

        • Flat rate of 33%


    GST

    GST rate is 15%. To calculate the GST content from a gross figure, multiply the gross figure by 3/23

    Note that GST cannot be claimed on the following expenditures:

    Any overseas purchases including flights overseas and overseas travel Payments to contractors/individuals who are not registered for GST Interest.


    Claiming Use of Home Expenses

    If you are running a small business use an area set aside in the family home for work purposes. You can make a claim for the area set aside so long as:

    It is used principally for business use (such as an office or storage area), and you need to keep a full record of all expenses you wish to claim.

    It is your responsibility to keep invoices and records for a home office is the same as for any other business expenses you claimed. You can claim a portion of the household expenses, such as the rent, rates, insurance, power and mortgage interest. You must keep invoices for these expenses.

    You can only claim the expenses that relate to the area set aside for business. Work out the percentage of the work area, compared to the total floor area of the house. Then apply this percentage to the total house expenses.

    Example

    In a house of 100 square metres Sam sets aside 10 square metres as an office (10% of the total floor area).

    GST-inclusive house expenses for the full year were:

    Rates    $1,500.00

    Insurance (house)    $ 800.00

    Power    $ 1000.00

    Total costs (including GST)    $3,300.00

    Multiply total cost by 3, then divide by 23 to get the GST content    $ 430.44

    Total costs (excluding GST)    $2,869.56

    If Sam is not registered for GST the amount to claim is 10% of the total costs including GST:

    $3,300.00 x 10% = $330

    If Sam is registered for GST the amount to claim is 10% of the total costs excluding GST:

    $2,869.56 x 10% = $286.96    Sam can also claim 10% of the GST content of these items in his GST return, he can claim this either annually or on a period-by-period basis.


    Claims on mortgage interest

    You may also claim a proportion of the mortgage interest (not principal) paid during the year. There is no GST involved in this item, so it is easier to work it out separately. Use the same method of the business floor area percentage to work out what to claim.

    Example

    The business floor area is 10%.

    Mortgage interest paid

    (not principal repayments)    $2,500

    The amount to claim is:

    $2,500 x 10% = $250


    Note:

    From the year 2011/2012 onward, you cannot claim depreciation on your home. If you claimed depreciation on your home in prior years you must include the depreciation recovered in your tax return when you cease using your home for business purposes, or when you sell your home.

    You can claim the depreciation on capital items such as a computer, office furniture and fittings, or shelving, used for business purposes in your home.


    Telephone costs

    You may claim a deduction for telephone rental if you run your business or organisation from your home. If your home is the centre of operations or management for the business, you may claim a deduction of 50% of the telephone rental. Identify those toll calls that are business-related. It is a good idea to use a highlighter on your phone bill to mark the business toll calls. If you have a separate commercial and domestic line rental, you can claim the full cost of the commercial line for both income tax and GST, but none of the domestic rental. If you make any private calls on the business line, you will have to make an adjustment for them.

    Source FromIRD New Zealand