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BRIEFLY 14 May 2015

Are you using the correct PAYE tables?

Each year the PAYE deduction tables change, even if it's very slightly. This occurs even though tax rates may be unchanged. It's caused by changes in ACC levies. IRD does not send out new PAYE deduction tables. You can get them off the internet or apply for them from IRD.

 

UOMI rates up

The Use of Money Interest rate charge by IRD has just been increased from 8.4% to 9.21%.  Clients get caught for UOMI when they have big incomes. The current threshold for an individual who has no tax deducted at source is $179,030. If this is you, see us now and let us get some more tax paid, even if you're not yet ready to see us about annual accounts. If you have a family trust and you want to keep income in the trust, the threshold is only $7575 before UOMI applies.

 

New car and FBT

In one case recently, a car company included a free set of tyres with a new car after three years, $1000 worth of petrol vouchers and free servicing for three years. You can’t deduct the value of these from the price of the car, to achieve a lower cost for FBT purposes. They're merely promotional items. However, they could be used as bargaining chips to get the original cost of the car (and hence FBT) reduced.

 

Investment income

Where a couple have a joint account, the income from money taken out for investing belongs to both people. This is true regardless of who earned the money. Split the income equally. Some people are tempted to treat the income as belonging to the partner with the smaller income. This is wrong and would not be acceptable to the Inland Revenue Department.

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