May 2015 E Newsletter

Welcome

Welcome to the May 2015 edition of Focus!

For New Zealand-registered companies, there are new requirements for all directors to provide their place and date of birth. There is also a requirement for all NZ companies to have either a New Zealand resident director or an Australian resident director who is also a director of a registered Australian Company. In addition to this, all companies are required to disclose their ultimate holding company (if applicable). Please read the paragraph below for the details and deadlines.

We also look at changes to Kiwisaver in regard to the first home deposit subsidy and withdrawals, the change in the IRD’s use of money interest rates and the public holiday on Monday.

The Minister of Finance has announced that Budget 2015 will be presented on 21 May 2015, so keep an eye out for relevant update in next months Focus.

Companies Act Amendments

As of 1 May 2015 new registration requirements will be introduced by the Companies Amendment Act 2014 (the Act) which will affect new applications to incorporate a New Zealand Limited Liability company with the Companies Office. Existing companies on the companies register will have 180 days to comply with the New Zealand ‘resident director’ requirement listed below.

Important changes introduced by the Act coming into effect will require:

1. All New Zealand incorporated companies to have a director who:

• lives in New Zealand or
• lives in Australia and who is also a director of an Australian incorporated company.

2. All directors to provide their place of birth and date of birth.

3. All companies to supply their ultimate holding company details (if applicable).

Important dates to note to ensure compliance:

1 May 2015 – From this date any new companies being incorporated will need to meet the above criteria

1 July 2015 – From this date any existing company incorporated prior to 1 May 2015 will need to provide the information specified in points 2 and 3 above when they file their next annual return. If we prepare your annual return we may ask you for this additional information in order to complete the return correctly.

29 October 2015 – From this date all New Zealand companies will need to have at least one director who meets the criteria listed in point 1 above ie a New Zealand director or an Australian director who is also a director of another Australian company. All directors of a New Zealand company living in Australia must also indicate if they are a director of an Australian Company and provide the ACN number, the name and registered office of that Australian Company.

If you are a Director of a company which does not meet this criteria then you risk having the company removed from the Companies Office Register if you do not comply by 29th October. In order to comply an independent director who does meet the criteria will need to be appointed by this date and this appointment will need to be lodged with the Companies Office.

If you do not currently comply with this criteria then please contact us so that we can provide assistance to ensure compliance by 29 October 2015.

Changes to the KiwiSaver First Home Deposit Subsidy and Withdrawals

Effective 1 April 2015, Government has changed the rules around KiwiSaver HomeStart grants and KiwiSaver first home withdrawals.

The key changes are:

• The KiwiSaver first home deposit subsidy has been renamed the KiwiSaver HomeStart grant.
•  KiwiSaver members, if they meet the criteria below, will be able to withdraw their member tax credits (MTC) to help towards the purchase of their home.
• The introduction of a second HomeStart grant for people wanting to build their own home or purchase land to build their homes on.

Criteria for first home purchase is that you must have been a KiwiSaver member for three or more years. You are able to withdraw some or all of your KiwiSaver savings (except for the $1,000 kick-start). You can only withdraw money to purchase your first home - not an investment property.

The HomeStart Grant is able to be received if you have not received the HomeStart grant before and do not have realisable assets totalling more than 20% of the house price cap for the area. The price cap for Auckland is $110,000, Other large cities $90,000 and rest of New Zealand $70,000.

Use-of-Money Interest (UOMI) Rate Change

Effective 8 May the UOMI rates on underpayments and overpayments of tax will change.

The new rates are:

• underpayments - 9.21% (up from 8.40%)
• overpayments - 2.63% (up from  1.75%)

UOMI is charged on any underpaid or overpaid taxes to the Inland Revenue.

There are four categories of taxpayers that have to pay this interest to the IRD.  They are:

• Companies and Trusts with income tax liability of greater than $2,500
• Individuals who have estimated their provisional tax
• Individuals who have income in their own name that creates a tax liability of $50,000 or more (before provisional tax payments), and
• Individuals or entities that pay their taxes late

Depending on your situation, interest will be calculated on any terminal tax due (i.e. after provisional tax payments are taken into account) from the due date of the provisional tax payments to the date the terminal tax is paid. UOMI received is taxable income and UOMI paid is tax deductible.

One exemption for Individuals in the safe harbour rules. If you have used the standard uplift of 5% for provisional tax payments (i.e. have not estimated your provisional tax), and your tax liability is below $50,000 then you will not be subject to any UOMI.

Rates are reviewed regularly to make sure they are aligned with market interest rates.

If during the year your income has increased it may be necessary to make additional tax payments in order to avoid UOMI. Please contact us should your circumstances change so that we can advise you whether this is appropriate.

Queen’s Birthday

This year Monday, 1st June will be a public holiday to celebrate Queen’s Birthday weekend.

If an Employee normally works on Monday, but is not required to work on the public holiday, then they should receive their standard pay as if they had worked on that day.

If the Employee is required to work they will receive 'time and a half' for the hours worked, and providing it is a 'normal' day of work for them, ONE paid alternative holiday, to be taken later by agreement.
If you have any questions regarding how to pay staff for working on a public holiday please contact us.

We wish you and your staff a safe and happy Queen’s birthday weekend.