In a move to ease the financial stress, the New Zealand Government has changed the rules around write-offs for tax debt says New Zealand-wide accounting and financial experts at Tutbury & Associates Limited.
“Its important to keep yourself up to date on the latest changes with tax, as it can save you or your business a bit of money,” says Kelly Tutbury, Accountant and Managing Director at Tutbury & Associates Limited
For the 2019-2020 income tax year, tax payable up to $200 will be written off which is updated from the usual threshold for writing off tax is $50. Increasing this write-off threshold can go a long way in reducing tax bills for approximately 149,000 taxpayers.
“This amount of write off might not seem massive to some, this amount can reduce a significant amount stress for many kiwis,” says Kelly.
Inland Revenue’s auto-calc process has ensured that people have by now started getting their refunds. As at 10 June, there have been 2.3 million assessments carried out resulting in $586 million in tax refunds and $118 million in tax bills to pay.
This auto-calc process only applies to people whose income is only salary, wages, interest or dividends, not those who use the IR 3 tax return.
This change was settled on last week but legislation is still needed to amend the returns for the 2019/20 tax year. “However, it should be noted that for subsequent tax years, the threshold will revert to the $50 limit,” advises Kelly.
A newly fixed increase to provisional tax thresholds is projected to eliminate 95,000 taxpayers from the provisional tax net. This means that existing provisional taxpayers with residual income tax less than $5000 will have until February 7th of the year after they filed to pay their tax.
Expanding the provisional tax threshold decreases compliance costs for those businesses who’re now find themselves out of the net. It also keeps cash in the business for more time.
Businesses can still choose to make voluntary payments throughout the year. Additionally. if taxpayers think they have paid more than they should their provisional tax for the 2020-21 income year, they can contact Inland Revenue to get a refund.
If you have any questions or issues about these tax changes, don’t hesitate to contact the friendly accounting professionals over at Tutbury & Associates Limited. Tutbury & Associates Limited can help you with your accounting needs and liaise directly with the Inland Revenue on your behalf.
About Tutbury & Associates Limited:
Tutbury & Associates Limited has worked hard to build their reputation of excellent customer service by working interactively with their clients and making sure that their clients get value for money. They are ideal for ideal for trades people, or anyone who wants to grow their business.
Contact Tutbury & Associates Limited:
Phone: 07 576 2194
Address: 23 Myres Street Tauranga