With the uncertainty surrounding the environment in these times, we would like to assure that our clients and also others are aware of any and all tax reliefs that they may be eligible for. Please use this blog as a reference and do get in touch if you would like to discuss any of these further.

Use of Money Interest

  • IRD has the discretion to write-off use-of-money interest (UOMI) on payments due on or after 14 February 2020. Applies to All taxes including Income Tax, GST or Working for Families.

You may be eligible for a UOMI write-off if you or your business:

  • has been significantly affected by COVID-19
  • has had income or revenue reduced by at least 30% compared to the same month 12 months earlier
  • have explored other options for financial support, such as talking with your bank about additional finance or re-negotiating other loans/overdrafts.

Note that, UOMI could be remitted for a maximum of two years past the date of enactment, but the actual length will depend on the circumstances of each business or individual.

Please know that we will monitor and request this remission on our client’s behalf.

Provisional Tax Threshold

  • The threshold has been Increased from $2,500 to $5,000 with effect from the 2020-2021 income year. For taxpayers with 31 March balance date this will mean 1 April 2020.

This means that if your residual income tax is less than $5000. There will be no taxes to pay until 7 April 2021 (or 7 February 2021 if you have lost your extension of time). This will alleviate your cashflow.

Kiwisaver

  • You can withdraw your Kiwisaver funds early if you are experiencing financial hardship. You can only withdraw your and your employer’s contributions.
  • You can apply for a temporary suspension for 3 months to 1 year. You can take as many savings suspension as you want and you can take them back to back

Apply Here: https://tinyurl.com/uraly7u

Difficulty Paying Taxes

You can also apply for a write-off due to serious hardship if you know you won’t be able to pay the full amount. If you are granted relief from payment due to hardship and you have losses to carry forward, these losses will be reduced in proportion to the amount written off.

Depreciation

Depreciation on commercial and industrial buildings can be claimed as a deduction from the 2021 year.

Low Cost Assets

Assets purchased between 17 March 2020 and 16 March 2021 that cost less than $5,000 can be claimed as a deduction instead of needing to be depreciated (subject to additional criteria). Assets purchased from 17 March 2021 that cost less than $1,000 can be claimed as a deduction instead of needing to be depreciated.

Research and Development Tax Credit

The wider refundability of the research and development tax credit, which was originally to take effect from the 2021 year, are effective from the 2020 year. Please contact us if this affects you.

Tailored Tax Code

You may be entitled to a tailored tax code if you’re receiving a salary or wage and have a loss to carry forward. A certificate will be issued to you with a reduced tax rate. A tailored tax code lasts up to one year. More information will be released. Note that at this stage the IRD is referring to situations where you have losses carried forward in your personal names. Unfortunately no mention to removal of the ring-fencing rule at this stage.