The IRD advises that there are several options you can explore if you are having trouble making your tax payments. One option is to set up an arrangement in myIR for paying off your tax in instalments. Or if you are paying provisional tax because of anticipating making a profit but believe that you might no longer make a profit then you can re-estimate it in myIR to reduce your tax bill. You may be able to offset last year’s tax bill for a profit against this year’s loss – called tax loss carry backs. The IRD can also write-off penalties and interest in certain circumstances. However we strongly recommend that you first talk to your accountant (Tax Agent) before taking any of these measures. They will be able to advise you on the best course of action and can provide assistance in making the appropriate lodgements with Inland Revenue.
The small asset depreciation threshold has been raised to $5,000 for assets purchased from 17th March 2020 to 16th March 2021. This allows the full cost of assets under $5,000 purchased during this period to be written off and reduce this year’s tax bill. From 17th March 2021 onwards the threshold will be reduced to $1,000.
ACC has advised they are delaying invoicing until October this year. 2020/21 invoices would normally have been issued from 1st July 2020.
The provisional tax threshold has increased from $2,500 to $5,000, so if you are expecting a tax bill under $5,000 you are not required to pay instalments through the year.
Commercial and industrial buildings are now permitted to be depreciated.
Research and development tax credits have been brought forward, so businesses who undertook R&D last year may be able to reduce this year’s tax bill.
The application date for the Small Business Cashflow Scheme has been extended to 31st December 2020.