Jarvis Newsletter

Issue 6 - Christmas Edition

Welcome to the 2011 Christmas edition of Jarvis Accounting Solutions newsletter.

Trading Hours over the Holiday Period

My office will be closing down from 11.30 am on Friday 23 December 2011 and will reopen on Monday 16 January 2012. However, if you urgently require my help; you can still email me with your request and contact details or phone me on 027 383 2652 and leave a message.

To all of our wonderful clients, business associates and supporters, we wish you a joyous Christmas and an exciting and successful 2012.

From the Jarvis Team

Gift Tip

For last minute gift ideas why not visit Shalamar Florist and Gifts

Located in Cracroft Village at 146 Cashmere Road Shalamar Florist and Gifts is a treasure trove where you’ll find something for tiny tots, teenagers, grandparents and everyone in between.

New in store, and displaying Sue’s own flair, are a great range of antique jugs and pitchers that come
complete with a bunch of fresh flowers. Priced from just $25, these are a wonderful presents – or take
one home for your own personal enjoyment.

Happenings at Jarvis Advanced Accounting

Some of you would have been greeted by Chizuru when calling the office who has been helping us get back up to speed with some of the administrative tasks following the earthquake closures. We bid her farewell now and best wishes on her new full time position closer to her home in Kaiapoi.

We will be welcoming Rachael to the Jarvis team on 16 January 2012 who will be happy to greet and assist you as required. We are now well settled into our premises in Ferrymead and look forward to seeing those of you who have not yet had the opportunity to visit us here.

Tax Talk

Company tax rates dropping

The company tax rate will reduce from 30% to 28% from the 2011/2012 income year (for most companies, 1 April 2011).

Building depreciation gone

Depreciation deductions on buildings with an estimated useful life of 50 years or more disappear from the start of the 2011/2012 year (for most of you 1 April 2011). New rules have been introduced to ensure the fit-out of commercial and industrial buildings continues to be depreciable.

At last – some GST simplification

Sales of land now zero rated

In the past, whether GST should be added or not to the sale of land, has sometimes been a complex matter. From 1 April 2011 these transactions will be zero rated, as long as the following apply:

The purchaser declares in writing that the property is to be used for a GST activity, and
The purchaser is GST registered

Private use adjustments on cars

As of 1 April the rules for calculating private use adjustments on vehicles for sole traders and partnerships have been simplified... sort of.

By way of example, if you expect business usage to be 80%, then you simply claim 80% of the GST on the cost of the car and any running expenses. Sounds logical, some would say obvious (accountants have been suggesting this to Government for years).

That was the simple bit. If you underestimate your private usage by 10% or more, or if any GST over-claimed due to such underestimating comes to more than $1,000, an adjustment (not so simple) has to be made.

But wait… there’s more. There’s a wash up calculation when you sell the car and it’s complicated. In fact, we won’t bore you with the details in this newsletter. To talk through your situation, give us a call or email us, and we’ll provide you with the maths!

Working for families tax credits income net widened

As of 1 April clients will no longer be able to use investment losses such as from rental properties to reduce their income for working for families (WFF) tax credit.

The definition of income will also include an extra nine types of income:

Attributable trustee income
Attributable fringe benefits
PIE income other than registered superannuation schemes such as Kiwisaver and retirement benefit schemes
Passive income earned by children (includes interest, dividends and rent). Amounts over $500 per child will be included as family income
Worldwide income received by a non-resident spouse
Tax exempt salary or wages under specific international agreements
Income equalisation deposits made by you, your trust, or a company controlled by you or your trust
Certain pensions and annuities – includes 50% of payments from life insurance policies or a superannuation fund (excludes NZ super)
Other payments received from any sources that are used for your family’s day-to-day living expenses (but only if the total amount from those sources is more than $5,000). An example of this might be board received.

In future, when you apply for WFF tax credits, you’ll need to let IRD know about amounts from any of the above sources.

For those clients who receive or are entitled to WFF credits, when we prepare your 2012 tax return, we’ll need to request the above information. Good communication will be essential.

Opportunity is missed by most because it is dressed in overalls and looks like work.

T +64 3 366 4600

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