Hello and welcome to our first newsletter for 2018.

It looks like our long hot summer may be coming to a close.  The dark cold nights that are just around the corner should give you a perfect opportunity to get your 2018 accounts in order ready to send to us so we can get your taxes sorted.  We will be emailing our annual questionnaire to you shortly, so please keep an eye on your inbox for this.

Please note that this newsletter contains information regarding major tax changes which may affect you so please read it to ensure that you are informed of these changes.

Important Upcoming Tax Dates   

By now, those of you who have an extension of time should have received your 2017 terminal tax notices. This tax is due on the 7th of April .  Don't forget that if you are sending a cheque, it must be received by the 7th so get it in the post in plenty of time!

We'll also be emailing out the tax notices for the 2018 final provisional tax instalment shortly (payment due on the 7th of May ).   Please look out for these in your inbox.

If paying either of these taxes by the due date is not possible, please don't stress!  Get in touch with us as soon as you can so we can either set up a payment arrangement with Inland Revenue or buy your tax from one of our tax pool suppliers.

For those of you who are GST registered and your returns are aligned with a 31 ^st of March balance date, your due date for filing and payment of your March GST return will be the 7th of May .  Note that this is our busiest time of the year so please get your information to us as soon as you can to ensure we can meet the deadline.

Additional requirements for 31st March

·          Record your debtors (people who owe you money) as at 31 March 2018.

·          Record your creditors (people you owe money to) as at 31 March 2018.

·          Carry out a stock take, if you carry and sell stock.

·          Keep a copy of your RWT certificates, income protection insurance certificates and evidence of your company or trust's bank balance at 31 March. Scan them directly to us if there is a chance you may lose them!   

School donations   

It's that time of the year again when school fees and donations are being paid.  Don't forget you can claim a 33% rebate on these donations (as well as donations to most charities), so please remember to include these in your receipts if paid by the 31 ^st March 2018.  Note that activity fees and some levies imposed by schools are not claimable so we must have your receipt to ensure we are only claiming the donation part of the payment.

Important Tax Changes for Property Investors

Bright-line test  

The government recently announced that they are extending the bright-line test from 2 years to 5 years, effective as soon as the change receives royal assent – which could be as soon as 1 April.

The change will affect all residential property (excluding the family home) purchased after the date of the change.  If you have already purchased and have an unconditional agreement in place, then you will still be covered under the old 2 year rule.

Please note that you can only have one family home and that is the one in which you spend most of your time.  Your family bach, any land you own on which a residence could be built and residential rental properties are caught should you buy and sell within 2 years or 5 years moving forward.

Rental losses to be ring-fenced

We are also likely to soon see draft legislation on the ring-fencing of rental losses.  Should this become law, investors will no longer be able to offset tax losses from their residential investment properties against their other income to reduce their tax liability. Instead, these tax losses will carry forward to offset against future rental profits.

As this proposed law needs to go through the Tax Policy Process, it is likely to not take effect until 2019 (and may even be phased in over a period of time). However it should be considered if you are contemplating purchasing a rental property.  Please call us if you have any concerns or questions as to how this change may impact on you.

Smoke Alarms and Insulation in Rental Properties

All rental properties must have working smoke alarms installed and, from 1 July 2019 must be insulated.  Landlords are required to complete an Insulation Statement with all new tenancy agreements.  We recommend you read the rules on the Tenancy Services website to ensure you are complying with legislation.   

Water Rates

Once again for those of you who own residential rental properties: it has come to our notice that many landlords pass on the full water rates bills for their tenants to pay.  However, under the Residential Tenancies Act, tenants are only required to pay for water usage, not the fixed fees.  There have been a number of cases recently heard by the Tenancy Tribunal and many landlords have been forced to reimburse their tenants for the Wastewater Fixed Charges that they have passed on to their tenants.  So if you are doing this, we suggest you talk to your tenants and come to an agreement before it turns nasty.

Time to consider your software options

The start of a new tax year is the perfect time to switch accounting systems if this is on your agenda.  For those of you considering moving onto BankLink, Xero or MYOB Live please get in touch with us as soon as you can to get this in place before 1 April.   

Bank Accounts for Companies

We have noted a few cases where clients are operating through their company but the company doesn't have a bank account!  Please note that your company is a separate legal entity from yourself and must be treated as such.  If all income and expenses pass through personal bank accounts you will have no opportunity to utilize company tax rates and, should the legality of your company be questioned, you may struggle to prove limited liability.  If this applies to you, please open a bank account in the company's name and start treating the company as a separate entity from yourself.      

Minimum Wage Increase

The minimum wage is increasing to $16.50 per hour from 1 April 2017.  Those of you employing staff on the minimum wage will need to factor this increase into your 2019 budgets.        

Anti-Money Laundering Legislation

As previously advised, we will be caught by this new legislation from 1 October 2018.  We are currently in the process of enhancing our systems and documentation to ensure that we will comply.  We will be monitored by the Department of Internal Affairs and the fines for non-compliance are huge.  However, this additional compliance will come at a cost which unfortunately we can not completely absorb.  We have therefore made the difficult decision to increase our Tax Management Fees from the $50 we have charged since 2011 to $80 per tax return.   

Baby News!

We are pleased to report that Bryony's baby arrived at the beginning of January – a little girl called Tessa.  All is well and we look forward to welcoming Bryony back at the end of the year.

And finally,

We are very pleased to advise that Anne Blaiklock will be joining our team on the 4 ^th of April.  Anne is a very experience chartered accountant who has run her own small accounting practice for a number of years.  Anne will be working with us full time so this will be an opportunity for us to rebalance the workload among our accountants which we need to do from time to time.  So please don't be alarmed if your next contact from us is from a different accountant – regardless of who is looking after you, you can be confident that you will continue to receive the same excellent service as always.

The team at Tyler Price would like to wish you all a very happy and relaxing Easter.  As always, we look forward to assisting you with any queries you may have coming up to the end of the financial year, and we are only too happy to be able to help.

From the team at Tyler Price – Isobel, Abbey, Bryony, Caroline, Karen, Lichelle, Tina and Virginia.