Nelson floods tax relief available

Tax relief is available through the Inland Revenue Department for those affected by the Nelson floods in December last year.

If you are having difficulty making tax payments or if your income has been  affected as a direct result of the disaster, then you may be eligible for tax relief and/or income assistance.

Contact IRD for further information.

Investors entitled to deduct losses over Hanover debt-for-equity swap

Investors who sold shares which they obtained as part of the United Finance/Allied Farmers and Hanover Finance debt-for-equity swap in 2009 may be eligible to deduct their losses, the Inland Revenue Department has confirmed.

The IRD would consider cases where it could be demonstrated that the shareholder’s main objective in obtaining the shares was to resell them.

The loss would be calculated on the price of which the shares were initially issued, which was about 20.69 cents less than the sale price, and any fees or commissions incurred.

Contact the Inland Revenue Department for further information.

Rena grounding

Depending on your personal circumstances, there may be some options available to help you if the grounding of the Rena has directly impacted your business or income, and your ability to make tax payments has been affected.

Check the Inland Revenue website for more information: http://www.ird.govt.nz

Effective time management

Time is money! So how can your businesses develop good time management skills and improve productivity?

• Identify the most important issues, and deal with them first.
• Sort jobs in order of importance and delgate them appropriately.
• Ensure that staff are able to deal with the jobs they are given.
• Make punctuality a company policy.
• Ensure that meetings are meaningful and impose a clear-cut agenda.
• Keep distractions, such as personal e-mail and calls, to a minimum.
• Tackle the important tasks when people are at their most productive.
• Give staff rewards and incentives to encourage their productivity.
• Prepare for unexpected issues and ensure that there will be time to deal with them.

Remember, in a faced-paced work environment, efficiency equals success!

Ultra fast broadband for Auckland businesses

Changes to IR laws

New amendments to the Employees Relations Act have been enacted and will come into affect on 1 April 2011.

More detail should be sought, however, some significant sections are as follows:

• Every employer will be required to keep a copy of every signed employment agreement from 1 July 2011.  Failure to produce a copy of the agreement can result in a fine being imposed.

• A 90-day trial period is introduced for new employees.  During these 90 days, the employer may dismiss the employees without them having a right to a grievance complaint, but only if all legislative requirements have been followed precisely.

• The Employment Relations Authority will apply a new test in determining whether the dismissal of an employee was justified.  The test is what a ‘fair and reasonable employer could have done in all the circumstances’, thus widening the factors that may be taken into account.

Extension of redundancy tax credit

Due to the Christchurch earthquake, Peter Dunne, Revenue Minister of New Zealand, has announced an extension of the redundancy tax credit until 31 March 2011.

After the disaster on the South Island, the extension is applicable to everyone receiving redundancy payments before 1 April 2011.  The rate is 6 cents in the dollar to the maximum $3 600.

Change to small business definition

On 1 January 2011, the definition of what constitutes a small business changed.  From that date, businesses must have fifteen of less employees based on a head count of employees, rather than full-time equivalent employees, to be considered a small business.  Your employee headcount should now include full time, part time and regular casual employees.

This change has the greatest impact on unfair dismissal qualifying periods.  Businesses that are no longer regarded as small businesses will not be able to rely on the small business unfair dismissal exemption.  This exemption stipulates that an employee must have been employed for at least 12 months before qualifying for unfair dismissal coverage.  Instead, employees will able to qualify for such coverage in six months.

It is important to determine whether your business qualifies as a ‘small business’.  If it does not, seek professional advice in order to come up with the best employment strategy.

Voluntary disclosure of offshore income

Australia and New Zealand’s Double Tax Agreement

New Zealand and Australia’s new double tax agreement entered into force on the 19^th of March this year.

For cross-border dividends, the provisions of the agreement will apply to amounts paid or credited from 1 May 2010. Article 10(3)(c) of the agreement provides that a competent authority determination may be made on whether a zero-rate of withholding tax will apply to certain dividend payments.