Significant Tax Changes from 1 April 2013
Three important tax changes take effect from 1 April 2013:
KiwiSaver Contribution Increase
From 1 April 2013 KiwiSaver employer contributions increase by 1% from 2% to 3%. The 2% employee contribution rate will also increase to 3%, employees contributing at the 4% or 8% rate will not be affected by the rate increase.
Student Loan Payments Increase
From 1 April 2013 the employee Student Loan Repayment Rate increases from 10% to 12% for all New Zealand-based borrowers earning over the repayment threshold ($19,084).
Tax Credit Changes for Children
As part of the Government’s 2012 budget, the tax credit for children was removed from 1 April 2012.
When the tax credit was in place children were able to earn a minimum income, tax free to the amount of $2,340.
Transitional rules were implemented for the 2012/13 tax year relating to the tax credit.
From 1 April 2013 the new tax codes will mean full PAYE will be deducted from children’s salary and wages. Note the new rules do not apply to children who earn less than $2,340 and who are not taxed at source on that income (i.e. where an employer is not required to deduct PAYE e.g. babysitting income from a neighbour) – in this type of situation, the child will continue to pay no tax. However, if this type of income exceeds $2,340 the full amount becomes taxable income.
Upcoming Tax Dates and Penalties for late filing GST
All tax returns for the tax year ended 31 March 2012 must be filed with the IRD by 31 March 2013, any terminal tax owing for the 31 March 2012 tax year must be paid by 7 April 2013, we will send our clients a reminder notice for any payments due by 7 April 2013.
Late filing penalties apply where GST returns are not filed by the required date. There are two levels of penalty: if you account for GST on an invoice or hybrid basis the late filing penalty is $250, if GST is accounted for on a payments basis the penalty is $50.