A snapshot of recent Tax changes
Here is a snapshot of the latest updates that may affect you or your business
Standard-cost household services for boarding providers has increased from $207/week to $222/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 $222/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 $55/day to $59/day for guests staying at a owned property or from $50/day to $53/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 $0.83/km to $0.95/km; the tier 2 rates (based on additional mileage over 14,000kms) has also increased for petrol or diesel vehicles from $0.31/km to $0.34/km; for petrol hybrid vehicles from $0.18/km to $0.20/km and then for electric vehicles has increased from $0.10/km to $0.11/km.
The Square Meter 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 $47.85/sqm to $51.05/sqm effective for the 2023 financial year.
IRD Use of Money Interest rates have increased over the last 12 months from 7.00% to 10.39% pa effective from 9 May 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 0.00% to 3.53% pa.
Paid parental leave entitlements will increase on 1 July 2023. For employees, this will match ordinary wages (actual or average) up to a maximum of $661.12 a week (up from $621.76 a week); for self-employed persons this will match wages up to a maximum of $661.12 a week (up from $621.76 a week) and there will be a minimum payment of $212 a week (up from $200 a week). It is also a requirement that the equivalent of 10 hours a week at the minimum wage will be paid.
