A snapshot of recent Tax changes
Here is a snapshot of the latest updates that may affect you or your business
Changes in allowances – Each year the Inland Revenue Department release amended rates as a result of CPI adjustments. The following increase of rates have been announced:
Standard-cost household services for boarding providers has increased from $222/week to $231/week. This means that if you have a boarder that pays below the standard-cost then there is no requirement to return income. If the boarding income exceeds $231/week then you will need to declare that for tax purposes however, expenses can offset that income, either actual household costs as a % or the flat standard-cost rate if you are unable to determine the actual cost.
Standard-cost household services for short-stay accommodation (eg Airbnb) providers has increased from $59/day to $61/day for guests staying at a owned property or from $53/day to $55/day for guests staying at rented properties. This means that if you make a property available to the public for short-stay accommodation, you can either claim as a deduction for income tax purposes the actual household costs as a % and based on nights occupied or the flat standard cost rate if you are unable to determine the actual cost.
Motor Vehicle mileage rates have increased. The tier 1 rate (based on 14,000kms or less in a year) has increased from $0.95/km to $1.04/km; the tier 2 rates (based on additional mileage over 14,000kms) has also increased for petrol or diesel vehicles from $0.34/km to $0.35/km; for petrol hybrid vehicles from $0.20/km to $0.21/km and then for electric vehicles has increased from $0.11/km to $0.12/km.
The square metre rate is an alternative calculation option for Home Office claim purposes. This option is used as a flat rate rather than working out your household expenses and taking a claim that way. It does exclude interest on your mortgage, rates or rent which you continue to claim as a percentage. The rate has increased from $51.05/sqm to $53.10/sqm effective for the 2024 financial year.
IRD Use of Money Interest rates have increased over the last 12 months from 10.39% to 10.91%pa effective from 29 August 2023. That is the rate of interest that the Inland Revenue Department will charge on unpaid or late paid taxes. The credit interest rate has also increased from 3.53% to 4.67% pa.
Paid parental leave entitlements will increase on 1 July 2024. The current rates for these rules are effective now and the IRD will review them & adjust them from 1 July 2024. For employees, this will match ordinary wages (actual or average) up to a maximum of $712.17 a week (up from $661.12 a week); for self-employed persons this will match wages up to a maximum of $712.17 a week (up from $661.12 a week) and there will be a minimum payment of $227 a week (up from $212 a week). It is also a requirement that the equivalent of 10 hours a week at the minimum wage will be paid.
