Welcome again to the McLean and Co. Newsletter in which we discuss current taxation and business matters. We trust you find it informative.  

 

We are happy to accept new clients.  We would be happy to assist colleagues and acquaintances as new clients.

 

INDEX

1. Depreciation on Buildings

2. Student Loan Changes fron 1 April, 2012

3. 2013 PAYE Tables

4. Company Annual Returns- new Filing Fee

 

DEPRECIATION ON BUILDINGS

It was acceptable to claim Depreciation on Buildings used for business activity up to the 2011 tax year.  This of course resulted in a tax deduction which reduced taxable income. However in the 2012 tax year , for buildings with an estimated life of over 50 years this deduction has been removed.  This change applies to any building regardless of when it was built or acquired and was made to reflect the economic reality that most buildings increase rather than decrease in value.

Buildings with a useful life of less than 50 years may continue to be depreciated. These are limited, but could include sheds not solid in structure , shade houses, barns, chemical and fertiliser works, portable buildings.

Building fit-out continues to be depreciable for commercial and industrial buildings (non residential).  Common items of fit-out include partitions, sprinkler systems, fire safety doors, internal plumbing, bathroom facilities, electrical wiring, lighting systems, kitchens. laundries, cooling and heating systems.

Both new and existing separately listed chattels may still be depreciated, but you cannot retrospectively separate out existing chattels from the building cost and claim depreciation on them.  New fixtures purchased after 1 April 2011 can however be depreciated separately (e.g a new stove).

The Accumulated Depreciation in the Schedule of Fixed Assets and Depreciation will remain as it was at the end of the 2011 for Buildings on which the depreciation ability is terminated, and if the building is sold for more than the Written Down Value in the Schedule, or if it undergoes a change of use (e.g. becomes your private home) then the depreciation recovered will have to be declared back as taxable income in the year of occurrence.

 

STUDENT LOAN CHANGES FROM 1 APRIL, 2012  

There have been some changes to student loans from 1 April, 2012.

Add "SL" to your tax code

If you’re earning salary or wages, make sure you add "SL" to your tax code regardless of how much you earn, unless you have received an exemption from Inland Revenue.

Pay period repayment obligations for salary or wage earners in New Zealand

Your student loan deductions every pay period will be considered as meeting your repayment obligation, unless there’s a significant under- or over-deduction. You generally won’t have an end-of-year assessment.

Repayment exemptions for full-time students

You can apply for a repayment deduction exemption if you’re studying full-time and expect to earn under $19,084 in the tax year.

Special deduction rate for secondary earnings

If you earn under the pay-period threshold (e.g. $367 a week) from your main job, you can apply to reduce the repayment deductions on earnings from a second job.

Repayment holiday changes

Going overseas? If you want a break from your repayment obligations you need to apply for the one year repayment holiday and provide a contact person. Interest will still apply to your loan during the holiday. Already overseas? The repayment holiday has been shortened from three years to one year and the interest rate reduced to 6.4% p.a.

Loans in default

The rate that applies when loans are overdue has reduced to 0.843% per month. If you’re not sure how to get your loan back on track, get in touch with IRD.

Online services

Student Loan holders can register and login at   www.ird.govt.nz   to check latest student loan details, apply for an exemption, special deduction rate, repayment holiday or update  contact details.

Annual administration fee

A $40 annual administration fee will be charged on accounts if the loan balance is $20 or more, unless the student has paid StudyLink an establishment fee in the same tax year.

 

2013 PAYE TABLES

The 2013 PAYE deduction tables for pay periods between 1 April 2012 and 31 March 2013 are now available online.

2013 Weekly and fortnightly PAYE deduction tables (IR340)
2013 Four-weekly and monthly PAYE deduction tables (IR341)

 

COMPANY ANNUAL RETURNS- NEW FILING FEE

Companies Office have advised that there will be a fee for Company Annual Returns filed from 1 August, 2012 (previously the  service was free).   The new annual return fee will be $45, this includes a $25 registration fee, a $10 FMA levy and a $10 XRB levy.

McLean and Co. carry out the processing of Company Annual Returns for a number of our Company clients and if so will meet the cost when assisting in this regard, and unfortunately as a consequence will have to pass this on to our clients in our yearly charge.