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Pay-as-you-earn provisional tax

New provisional tax option for small businesses

Small businesses that have turnover of less than $5 million a year can work out their provisional tax using the accounting income method (AIM).

AIM uses new functionality included in approved accounting software to work out payments. You can continue to use another provisional tax option if you think your business won’t suit AIM. It will suit your business if you have:

  • irregular or seasonal income
  • accounting software or want to start using accounting software.

Once you’ve opted in to AIM you’ll only pay provisional tax when your business makes a profit. This will help you to avoid cash flow problems.

As long as you make your payments in full and on time, there is no exposure to use-of-money interest. If your business makes a loss you can get your refund straightaway rather than waiting until the end of the year.

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Changes coming to property market: Property Institute

Changes coming to property market: Property Institute

Property Institute of New Zealand Chief Executive Ashley Church says the impact of the election on the New Zealand property market can already be largely predicted – even though the final make-up of the next Government could be weeks away.

Mr Church says that the role of NZ First as ‘King or Queen maker’ in coalition negotiations means that much of what is likely to happen is predictable because New Zealand First policy positions will feature whether National or Labour is ultimately chosen as a coalition partner.

“While the coalition talks are all about negotiating positions – Peters will have considerable leverage over both parties – so there are some bottom lines that we can reasonably expect to find their way into any final agreement”.

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Kaikoura earthquakes relief provisions

The Government has introduced relief provisions for “depreciation recovery income” from insurance and compensation payments resulting from the earthquakes in the Hurunui, Kaikoura and Wellington areas (the Kaikoura earthquake).

This covers any earthquake that occurs in, or significantly affects, the earthquake-affected areas on or after 14 November 2016.

In most circumstances, when you dispose of a depreciable asset, if the disposal amount on that asset is more than the adjusted tax value (book value) of the asset the excess (depreciation recovered) is generally treated as income for tax purposes.

The earthquake relief provisions mean you can delay including the excess as income in your tax returns, when insurance or compensation payments are more than the book value of the affected asset(s).

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