January 2021 Tip Bits
TAX EDITS ANTICIPATED IN 2021
Tax is constantly changing and 2020 was unprecedented in terms of tax edits to usual rules. What can you and I expect in 2021 ?
New Tax and new rules:
New 39% personal income tax on income above $180000 comes into effect from April 1st
Changes to company ownership of greater than 51% may not affect carry forward of tax losses under new continuity rules – this new legislation is drafted but not yet passed.
A more permanent loss carry-back scheme is on agenda for 2022 income tax year. The temporary one introduced during COVID-19 lockdown at TTP, we have had only a handful of clients in a position to use.
Low value assets immediate write off was last year temporarily increased to $5000 from $500 and from 17 March 2021 goes back to $1000 so I still suggest you replace low value assets before this date.
IR have new ability to collect information from 3rd parties, so are trying to be proactive around reminding taxpayers of their potential tax obligations. At a recent meeting with senior inland revenue officers one remarked about the recent round of bright line letters sent out as “marketing” – I had not heard this term used by IRD before and was initially astonished by the use of the term. However, the inaccuracy of these letters showed us accountants that perhaps the term was used correctly. If you are disturbed by any letter you receive from the Inland Revenue during 2021 please let us know.
Staying the same for now:
Company and Trust tax rates remain unchanged at 28% and 33 % respectively.
Labour govt has committed to not implement capital gains tax so long as Jacinda is leading the government.
I am picking that new taxes to pay for the continuing covid-19 spending will be required, I am sure there will be some very interesting tax debates in the media, in politics and in cafes/pubs during 2021.
How to achieve business success in 2021?
Every successful business has a business plan, a detailed budget, regular accountability coaching. If your business doesn’t have these three things it may grow, but it is unlikely to give you as the owner the precious gifts of a truly successful business ie: time freedom, mind freedom and financial freedom. The best plans are created with an independent facilitator, and we love helping our clients do this and they always report having received great value for time spent doing this work on their business. You are welcome to start this process by download a free template here:
Success does not happen overnight, but it definitely does come from business owners committing to small steady improvement of their leadership thinking and habits. New ways of thinking and new business growth habits are difficult to achieve without regular accountability coaching.
Two options we offer is either regular one on one coaching or group coaching meeting. Our business groups meet either monthly or quarterly. Last year, in both groups business development occurred between members.
As we considered what we wanted to achieve with Tax & Trust in 2021 we decided we wanted to continue to grow great businesses. As we concentrate our efforts on helping you as our clients to make the right small changes necessary to increase your regular income this will enable you to purchase better cars, purchase or upgrade your homes, pay down debt. With all that is unknown, making one or two SMART goals and starting the year well by leading your team with a strong vision, and energy is even more important than usual.
Thank you for choosing us to be your accountancy partner – we are feeling refreshed and ready to bring on this new year!
To book in for a complimentary GROW meeting click here:
Business Quarterly Workshop*
Thursday 11th February
9am – 1pm
Know Your Numbers Webinar view here
Wednesday 24th February
10am – 10:45am
Business Monthly Workshops *
Business Quarterly Workshops*
*The purpose of this workshop programme both monthly and quarterly is to encourage better planning and decision making and help you identify areas where you can improve your business performance. This month we are focusing on Terms of Trade and next month’s sales proposals and then we plan to go into a series of financial awareness coaching. These workshops may be 50% subsidised by application to the Regional Business Partner Network which we can assist you to apply for if your business meets the criteria.
We Love Referrals
At this time of the year many people are reconsidering their professional relationships if you are able to recommend our services to one of your friends or business associates we have an excellent referral program to say thank you which will benefit you if one of your referrals does decide after a free introductory meeting to join our practise.