Newsletter - December 2023

In this newsletter

• Christmas Hours
• The first 100 days
• Tax and 2024
• The return to 90-day trials?
• Polson Higgs Community Partners Programme
• Accountants in Gumboots

Christmas Hours

Over Christmas our office will be closed from noon on 22 December and will reopen on Monday 15 January 2024. If you have an urgent matter that needs attention during this time, please contact the Partner you work with on their cell phone (the number can be found in their email signature and on the website).

The first 100 days

The new government has set itself an ambitious plan for the first 100 days with 49 action points focused on rebuilding the economy.  There is a lot to digest in the plan, including Tax Changes and a return to 90-day trials. Our Tax and HR teams will cover those in more detail further down. The plan also sees the roll back of a number of Labour’s flagship policies, and I do wonder if some of this is change for changes sake!

However, one action point that has gone slightly unheralded was refocusing the Reserve Bank on a single mandate of price stability. It was never going to be possible with such competing objectives as:

• keep prices stable (keep demand for consumer goods low)
• keep unemployment low (keep demand for consumer goods high)

To have monetary policy that would in the long term keep inflation at an acceptable level. With the passing of the Reserve Bank of New Zealand (Economic Objective) Amendment Bill the coalition Government has focused the Reserve Bank on a single objective, price stability.

Tax and 2024

The Tax team at Polson Higgs has for the past couple of weeks have been digesting the various statements and promises from the new coalition Government. Whilst they are certain there will changes, they can only make an educated speculation at this stage as to what the detail of those changes will be.

• An increase of the trust tax rate to 39% (Labour introduced but never passed this. National has not explicitly said they would not increase the rate and we understand they plan to do so.)
• A change to the marginal income tax thresholds. The rates will remain but what income they apply to will increase.
• Re-introducing interest deductions on residential rentals. This is likely to be phased back in with 60% deductible in the 2024/25 tax year, 80% in 2024/25 and returning to 100% from 2025/26.
• The repeal of the clean car discount (this has passed)
• It is rumoured that the intention is to now keep the so called ‘App tax” which will see online platforms such as AirBnB and Uber charge GST on behalf of their suppliers.
• Changes to working for families abatement thresholds.

Some of these (39% trust rate, interest deductibility for residential property and the “App tax”) will require some action. The Government will want these changes in place for 1 April 2024, so we are expecting a lot of legislation to come through at the start of the year.

If you have any questions about how these changes may affect you then you should contact your Partner.

The return to 90-day trials?

Amongst the new governments first 100 days plan is the extension of 90-day trial periods in Employment agreements for all employers.  The amendment to the Employment Relations Act has already been introduced and we expect will be passed in the New Year.

The amendment will allow employers with any number of employees to include a 90-day trial period in their employment agreement. Currently this is restricted to employers with 19 or fewer employees.  The main benefit of amendment (for both employees and employers) is the trial period extends to all businesses the ability to determine an employee’s suitability for a job, giving them confidence to hire new employees and increase workplace flexibility.

There are some key points to bear in mind once the amendment is passed:

• The trial period must be agreed upon in the employment agreement before the employee starts work, with reasonable time to consider this – i.e. not getting the agreement on the day before or the day they start work.
• The exact time period must be stated, but the trial period cannot exceed 90 days in duration (although it can be shorter), starting at the beginning of the employee’s employment.
• There is no obligation on an employer to include this provision and there is no obligation on an employee to accept one.
• An employee on a trial period should receive all the benefits that a permanent employee would, including annual leave and sick leave.
• If an employee has worked for that employer before, they can’t be on a trial period.
• If you are an accredited employer, you are not able to use include the 90-day trial period.
• The correct period of notice, as outlined in the employment agreement, must be given within the trial period if the employer decides to dismiss the employee.
• Even though the employer does not need to give a reason for the dismissal, good faith obligations prevail if an employee asks for an explanation for the dismissal.

If you are considering employing staff or have any HR questions, then please don’t hesitate to contact our HR Team.

                Lisa Sintmaartensdyk                                                Vanessa Barker

Polson Higgs Community Partners Programme

Christmas is the perfect time to talk about the Polson Higgs Community Partners Programme.  Every day, members of the Polson Higgs team give up their time and expertise to support community organisations. From coaching sports teams, to working on charitable boards our team is full of Presidents, Treasurers and Secretaries making a difference in their communities.

Each year through our Community Partners Program, we offer up to $50,000 worth of time to support charitable organisations, clubs, and community groups. During 2023 we have helped a range of organisations from Supergrans to the New Zealand Sea Lion Trust, with everything from Xero training to employing staff for the first time.

The programme is about enabling community groups to access our expertise to create a meaningful difference to the organisation, areas where we can assist include:

Accountants in Gumboots

In October the firm had a two-day conference at Telford in South Otago. The theme was “Accountants in Gumboots” and was focussed on improving our understanding of our rural clients.

Over two days, we heard from speakers covering a wide range of topics from forestry to the requirements of rural bankers. We saw a working dairy shed, watched sheep dogs, and had our knowledge of seeds and grasses tested.  Our competitive natures were exposed with hay bale rolling and electric fencing competitions.

The team at Telford did a fantastic job of feeding and looking after us. They even managed to take us to the Nugget Point Lighthouse and Kaka Point Pub for a “Partners Shout”.

Have a Merry Christmas and a happy New Year. 

Kind regards,

The Polson Higgs Team.

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