End of Year Countdown Part I
Once again 31 March is fast approaching and for the majority of you that means the end of the financial year.
So this is the first of the posts –
New Assets
The low value asset threshold which allows assets to be written off immediately, as opposed to capitalising and claiming depreciation, was changed from $500 to $5,000 temporarily. This is coming to an end with the last day to get this concession being 16 March 2021. After this date, the threshold is reduced to $1,000. REMEMBER in order to get this tax concession, the value of assets on any one purchase must be LESS than $5,000 (or $1,000 if after 16 March 2021)These amounts are GST exclusive if you are GST registered or inclusive of GST if you are not GST registered.
So it is the value of the invoice that counts for example if you are GST registered .. you purchase 3 items on the 1 invoice .. item 1 is $1,500, item 2 is $2.000 and item 3 is $2,000. Being all on the 1 invoice, the low value asset rules would not apply as the invoice total is greater than the $5,000. However if you went and purchased item 1 and 2 on one day and then ordered item 3 on the next day then the low value asset rules would apply.
As you can see it is important to get it right in order to take advantage of this tax concession.
Minimum Wage Increase
As from 1 April 2021, the adult minimum wage increases from $18.90 to $20.00. So make sure that your systems are in place to action this change. Remember that it is for all hours worked from 1 April onwards that are to be paid at the new rate.
New Tax Rate
From 1 April 2021, NZ will have a new personal tax rate of 39% for any income over $180,000. This increase not only impacts tax but also impacts FBT. More to come on this as we digest the implications and work through options.
Stay tuned .. more to come.