TAX TIDBITS
Issue Thirty, March 2009
In this months issue:
Accountant Tips
Here are some tax tips to help you ensure you’re receiving every tax benefit available to your business
1. Check your interest deductibility. There is often an opportunity to get bank loans documented in the name of the company and thus obtain a tax deduction for the interest cost. This can be particularly effective if the shareholder current accounts have a reasonable credit balance.
2. Do you have a trust? As well providing excellent asset protection, trusts may also provide significant tax benefits when utilised in the most effective manner – particularly if your income is greater than $60,000.
3. Research and Development – do you undertake any R&D? If so, you may be entitled to the new R&D tax credit which provides a further 15% over and above the normal tax deduction. You may be surprised at what can be claimed – it is certainly not limited to test tubes and lab rats! Things like new production process or new products and materials provide options. It is even possible to claim a proportion of the wages and overhead cost associated with the research. If you think this applies to you we recommend reviewing this now – don’t wait until year end or you may lose the opportunity of capturing the data.
4. Home Office – If you do some work from home, you may be able to claim a portion of your home expenses including interest or rent, insurance, rates, power and any repairs. Simply measure the area of the office, calculate the percentage of the floor area of your home and claim a proportion of the expenses. You are paying these costs anyway, so you may as well get the tax benefit!
5. Don’t get caught for penalties! The IRD introduced late filing penalties for GST returns from 1 April 2008 so you could be penalised between $50 and $250 for each late return depending on your payment basis. There are also late filing penalties for income tax and PAYE – file the returns on time to avoid this absolute waste of money.
Keep good records and take opportunities that are presented and are within the law. If you have any tax concerns, your adviser can undertake a review of your business to ensure that any tax risks are minimised.
Disclaimer 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.
