Dear Client,
Welcome to the Tax Tidbits Issue Forty Seven for March 2011. Tax Tidbits Company Tax Rates Dropping As of 1 April the rules for calculating private use adjustments on vehicles for sole traders and partnership have been simplified...sort of. Disclaimer
This newsletter will assist you with the following, please click on the heading links.
Tax Tidbits Issue Forty Seven
Company Tax Rates Dropping
Building Depreciation Gone
At Last - Some GST Simplification
Private Use Adjustments on Cars
Did You Know?
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Kind regards,
HWI Team
Issue Forty Seven, March 2011
The company tax rate will reduce from 30% to 28% from the 2011/20012 income year (for most companies, 1 April).
Building Depreciation Gone
Depreciation deduction on buildings with an estimated useful life of 50 years or more disappears from the start of the 2011/2012 year (for most of you 1 April 2011). New rules have been introduced to ensure the fit-out of commercial and industrial buildings continues to be depreciable.
At Last-Some GST Simplification
Sale of Land Now Zero rated
In the past, whether GST should be added or not to the sale of land, has sometimes been a complex matter. From 1 April 2011 these transactions will be zero rated, as long as the following apply:
The company tax rate will reduce from 30% to 28% from the 2011/20012 income year (for most companies, 1 April).Depreciation deduction on buildings with an estimated useful life of 50 years or more disappears from the start of the 2011/2012 year (for most of you 1 April 2011). New rules have been introduced to ensure the fit-out of commercial and industrial buildings continues to be depreciable.In the past, whether GST should be added or not to the sale of land, has sometimes been a complex matter. From 1 April 2011 these transactions will be zero rated, as long as the following apply:
By the way of example, if you expect business usage to be 80% then you simply claim 80% of GST on the cost of the car and any running expenses. Sounds logical, some would say obvious (accountants have been suggesting this to the Government for years).
That was the simple bit. If you underestimate your private usage by 10% or more, or if any GST is over claimed due to such underestimating comes to more than $1,000, an adjustment has to be made.
Did You Know?
The 31 March 2011 is just around the corner so a lot of businesses with trading stock will need to do a stock take.
HWI Limited can assist you with accounting software requirements.
Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
