Your business needs to meet the eligibility criteria as outlined below and agree to meet the obligations in the declaration to be able to get a COVID-19 Wage Subsidy August 2021. It's available to all New Zealand businesses and self-employed people that meet eligibility criteria.
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The full eligibility details and obligations are set-out in the declaration, which you must read and agree to when you apply for the COVID-19 Wage Subsidy August 2021.

Your business may be able to get the COVID-19 Resurgence Support payment from Inland Revenue. It's to help with fixed costs like rent. You can get this as well as the COVID-19 Wage Subsidy August 2021

The Resurgence Support Payment (RSP) is a payment to help support viable and ongoing businesses or organisations due to a COVID-19 alert level increase to level 2 or higher. If your business or organisation is facing a reduction in revenue due to an alert level increase, you may be eligible for the RSP.

Applications for the alert level increase announced on 17 August will open at 8am on 24 August.

​At present residential investment property owners can claim interest on loans related to the property as a claimed expense. Thereby reducing the amount of tax needed to be paid.

​While the government is still in consultation on the precise details of the proposed change, what we do know from 1st October 2021 the proposal is set to restrict and eventually, overtime, remove the interest deductions on residential property income. 

If so and it was brought on or after March 27th 2021, you may be subject to the newly proposed extended Bright-Line test.

​Anyone who sells a residential investment property within 10 years of being purchased may have to pay income tax on any financial gain from the sale. This income is classed as personal income and would be taxed as per the marginal tax rate.

​This also applies to NZ tax residents who buy overseas residential properties.

​The government has proposed any new builds will continue to follow the 5 year bright-line period. 
 
However, at this stage consultation is underway to determine what can be considered as new builds. 

The date you purchase the property determines whether the bright-line period is 5 or 10 years.
 

• 5 Years: Property purchased between 29 March 2018 and 26 March 2021
• 10 Years: Property purchased on or after 27 March 2021
• The date the property's title is registered with Land Information New Zealand (LINZ) 
• Properties purchased in another country, begins on the date the transfer was registered under that country's laws.
• Properties purchased where the title has not yet been issued, begins when you sign the agreement to purchase the land.

​Any properties purchased before 1st October 2015, or if the property is your main home, held in a trust, inherited or used as a residential business or farmland is exempt from the bright-line test.

​Use this flow chart to find out where your property sits:

Check out the IRD Bright-Line Test Proposed Changes and Labour's reasoning behind the change Get The Facts About Bright-Line Test

1. Get your GST and income tax returns filed quicker and easier. Avoid penalties for incorrect returns and underpaid taxes. If everything is recorded and up to date you can calculate everything faster and more accurately.

2. Reduce your tax bill so you can claim business expenses against your income. If you get audited your astonishingly good record keeping will support your expense claims.
 
3. Your accountant can do your books quicker and keep costs lower. If your records are up to date and in good order your accounting costs will be much lower. Less time spent preparing your accounts means more money to put into your business. Plus, you’ll be able to use our accounting time for more specialised tax and financial advice.

4. Easily manage your business and help it grow. Better budgeting and decision making allows you to instantly see if you’re making a profit or overspending. If you record keeping is up to date mistakes will be harder to make and any issues spotted can be sorted before they grow, leaving no surprises at the end of the year.

5. The flow of money in and out is easier to manage. With up to date book keeping planning for low cash flow periods, seasonal downturns and unpredictable circumstances makes business life much easier. Likewise, you can easily identify the right times to buy business assets.
 
6. Do you need a loan? Record keeping can help you secure one. Increase your opportunity for funding and make it easier when applying for loans or grants. 
Accurate records show potential lenders if your business is worth investing in. Even if you're thinking of selling your business, you’re much more likely to sell if your records are well-organised.

Now you know why record keeping is important, do you know what you need to keep records of?

• Core records - cashbooks, petty cash, list of people who owe you money, you owe money to
• Income invoices - credit card sales, debit, and credit card notes
• Expenses - invoices for purchases, receipts for credit card purchases
• Banking - cheque and deposit books, bank and credit card statements, interest statements
• Work sheets - showing tax return calculations, vehicle logbook calculations, home office calculations
• Asset register - depreciation schedule and calculations
• Financial accounts - balance sheets, final profit, and loss statements
• List of assets and liabilities 
• Dividend statements
• Legal documents - sale and purchase agreements lease agreements credit agreements 

Do you employ staff? Head here for a more in-depth checklist and Select Record Keeping Checklist IR1008

What's best for your business? Within the Covid levels there are a range of financial support options to get you through.

Available during Levels: 2, 3, 4

Does your revenue drop every time there’s a change in COVID-19 levels?

RSP is a payment available to support business or organisations that are facing a reduction in revenue created by COVID-19 alert level increases. 

Are you eligible?

If you have been in business for at least 6 months and have experienced a drop of 30% in revenue over a 7-day period after an alert level increase, not just covid in general, you may be eligible for this support payment.

What do you need to know?

RSP is not an automatic payment support, the government will decide whether to activate if the alert level increases from level 1 for at least a week. 
This payment is not a loan, so does not need to be repaid. The payment must be used to help cover business expenses such as wages and fixed costs. 
Applications will remain open for 1 month after the return to Alert Level.

Ring-Fencing of Rental Losses

The proposed loss ring- fencing rules will mean that speculators and investors with residential properties will no longer be able to offset tax losses from those properties against other income for example, salary, wages or business income to reduce their tax liability. The losses can be used in future years when the properties are making profits or if the person is taxed on the sale of land.

Under the current New Zealand tax setting, tax is applied on a person’s net income. We do not ring- fence income and losses from particular activities or investments. This means that there is generally no restriction on losses from one source reducing income from another source.

Investment housing is currently taxed under the same rules that apply to investments. This means that rents are income and interest and other expenses are deductible. Capital gains on sale of the property are not taxed unless the property is on revenue account ( for example, land dealer or developer)
 
Aim of the proposed changes

The introduction of loss ring –fencing rules is aimed at levelling the playing field between property speculators/investors and home buyers. Currently, investor’s particularly high geared investors have part of the costs of servicing mortgages subsidised by the reduced tax on their other income sources helping them to outbid owner occupiers for properties. Rules that ring fence residential property losses so they cannot reduce tax on other income , and is intended to help reduce this advantage and unfairness.

Types of properties subject to the rules 

It is proposed that the loss- ring fencing will apply to residential land.
The rules will not apply on a person’s main home, a property that is subject to mixed assets rule for example a bach that is sometimes used privately and sometimes rented out and land that is on revenue account because it is held in a land related business.

Portfolio basis

It is suggested that the loss ring fencing rules should apply on a portfolio basis. That would mean that investors would be able to offset losses from one rental against rental income from other properties calculating their overall profit or loss across their potfolio.

Using ring fenced losses

Under the suggested changes, a person’s ring fenced residential rental or other losses from one year could be offset against their:

1. Residential rental income for future years and
2. Taxable income on the sale of any residential land.
   
   

Timing of the introduction of the rules
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It is proposed that the loss ring fencing rules will apply from April 1, 2019 next year.

New Square Rate Option for Claiming Use of Home Claim Expense for 2018

A new method will be available for the 2017-18 and later income years to calculate the expenses you can claim for using your home as an office. This method will use rates that Inland Revenue will determine based on the average cost of utilities per square metre of housing, but excluding mortgage interest, rates and rent.
You will be able to claim a portion of the mortgage interest, rates and rental costs that you paid during the year based on the percentage of floor area being used for business purposes.
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The square metre rate for the 2017 - 2018 income year is $41.10 per square metre.
You still need to give me your annual mortgage interest /rent but you don’t need to give me information on your utilities.

The Government has launched proposals for offshore suppliers of low-value goods to New Zealand consumers to collect and return GST on those goods. The Government is to close a loophole that gives offshore companies an advantage by not requiring them to collect GST on all goods sold to local consumers.

From 1 October 2019:
Offshore suppliers would be required to register, collect, and return New Zealand GST on goods valued at or below $400 supplied to New Zealand consumers.
 
The rules would apply when the good is outside New Zealand at the time of supply and is delivered to a New Zealand address.

Offshore suppliers would be required to register when their total supplies of goods and services to New Zealand exceed $60,000 in a 12-month period. In certain circumstances, marketplaces and re-deliverers may also be required to register.
Tariffs and border cost recovery charges would be removed from goods valued at or below $400.
 
The current processes for collecting GST and other duty at the border by Customs will continue to apply for goods valued over $400.
The current border processes for managing risks in relation to imported goods, including biosecurity assessment, will remain in place.

GST will be charged at the point of sale when the value of the goods is $400 or less. In some cases consumers will pay more for their goods but in some cases goods will be cheaper because of the removal of Customs tariffs, border security fees and biosecurity cost recovery charges. There is no change to the tax treatment of goods valued above $400, where the current process for collecting GST and tariff duty at the border will continue.