The schedular tax regime falls under the PAYE rules and typically applies to require tax to be withheld from self-employed individuals if they perform certain types of work, which could be as diverse as 'modelling or shearing'. Ordinarily, most payments to contracted companies are not subject to schedular tax. However, payments to companies for the supply of [...]
The amount of Fringe Benefit Tax payable depends on the value of the motor vehicle benefit. Sounds simple enough right? However the common complaint about Fringe Benefit Tax (FBT) is that calculating the correct FBT rate for vehicles (one of the most common employee benefits) is way too complex. Mistakes arise from not properly understanding the circumstances in which provision [...]
A common complaint made by employers is that the amount of time it takes to meet their FBT obligations is disproportionate to the amount of tax it actually generates. This frustration is arguably borne out in the number of mistakes that are often made when calculating the amount of FBT payable. A good example [...]
Over the last 18 months there have been a number of businesses fall over – which in and of itself has not been surprising given the recent economic climate. However, one element that serves as a warning for us all is the flow on effect of those failures. Not just in a tangible sense, [...]
If a company sells a capital asset (e.g. commercial land) and derives a non-taxable capital gain, it’s reasonable to expect the shareholders to want access to the cash. However, the problem often arises that in order for a capital gain to be distributed tax-free, the company needs to be wound up. This is a [...]
The depreciation rate for non-residential buildings has been reduced to 0%, effective from the 2024 / 25 income year. However, commercial fit-out remains depreciable. This makes the distinction between the two important because it is the difference between not being able to deduct any depreciation at all versus being able to claim a good [...]
Inland Revenue has commenced consultation on what topic should be covered in its next Long-Term Insights Briefing (LTIB). Inland Revenue, like other government departments, is required to produce a LTIB once every three years. The core purpose of an LTIB is to identify and explore long-term issues to help plan for the future. Initial [...]
As businesses expand, a common decision is whether to create new companies to accommodate new ventures, risks, products and/or acquisitions. A well-designed group structure enables a ‘parent’ company to create distinct entities that operate independently. This approach has several benefits - it provides flexibility as it allows control and visibility over each entity's direction, [...]
After a relatively quiet few years through the Covid pandemic, Inland Revenue’s (IR) audit activity has slowly started to increase over the past few years. In 2021, IR’s campaign had a focus on the real estate sector, where the concern was around real estate agents claiming a disproportionately large amount of expenses relative to [...]
BAU is a phrase that is used to describe “business as usual”. It is a good barometer of whether anything strange or unusual has occurred or whether things have been BAU. Invariably, non BAU transactions will occur: an insurance payout, a large asset purchase, a fine or a penalty. This then leads to the [...]