Stewart & Co Blog

Increase to the IRD Mileage Rates

The IRD have released their mileage rates for the 2017 year.  For both petrol and diesel vehicles this has been set at 73 cents per kilometer.  

New rates have also been introduced for Hybrid and Electric vehicles as follows:

  • Hybrid - 73 cents per kilometer
  • Electric - 81 cents per kilometer 

The above rates are effective from 1 April 2016.  If you have been using the prior year rates to reimburse employees or for preparing your tax return the IRD do not expect you to go back an amend these.  Please use the new rates going forward.  

Schedular Payments

Schedular payments apply to contractors across a broad spectrum of industries; from cleaners, farm workers and gardeners, to entertainers, sports people, labour only builders and fishing boat employers.  The withholding tax rate applicable depends on the industry type.
However, with the new rules, from 1 April 2017 contractors can choose to elect a lower withholding tax rate, down to a minimum of 10%.  This is done by the contractor electing a rate on their Tax Rate Notification for Contractors form (IR 330C) which they will provide to businesses that they invoice.
Withholding tax has always been required to be deducted from industries that fall within the Schedular Payment industries, so the only real change affecting these type of contractors, in regard to this area is the ability to elect the rate at which withholding tax is being deducted. 
Special Tax Rate

In the past, contractors that were subject to the withholding tax rules were able to apply for a certificate of exemption to not have withholding tax deducted.  Under the new rules, you can no longer apply for a certificate of exemption however, you can elect to have a zero percent withholding tax rate.  This does mean that contractors will pay their income tax through the provisional tax system.
The election of a zero percent withholding tax rate is done by completing an IRD Special Tax Code application form (IR23BS) and submitting this to the IRD.
Labour Hire Firms

The withholding tax rules have been also been extended to apply for contractors that work for "labour hire firms".  A labour hire firm has a wide definition but essentially includes "a person which has as one of its main activities, the business of arranging for a person to perform work or services directly for clients of the entity".
If you are a labour hire business and pay contractors to do work for your client, under a labour hire arrangement, these payments now come under the schedular payment rules and tax must be deducted.
For more information on the new schedular payments rules and how these might apply to you, please contact us at Stewart & Co.

Hot Topic - Meth Testing

Stephanie Brookes, Director and Senior Environmental Scientist of Meth Wise let's us in on some Do's and Don'ts of the industry.

Buying a home or investment property will likely be the most expensive purchase you may ever make. Considering Auckland house prices are now averaging the $1M mark, the cost of a simple methamphetamine (meth) test, is a small price to pay to avoid purchasing a meth-impacted home, protecting your investment and potentially saving you thousands of dollars in remediation costs! Living in a meth-impacted home may also have serious health implications for you and your children.

The Crockers Property Investment Index survey, released this September, estimated approximately ¾ of investors would opt for a meth-test prior to investing if given the option. Real Estate Agents and property managers are strongly advising buyers and landlords to have their property professionally tested in order to reduce risk and protect investments.

Why can't I just buy an immediate-result testing kit off Trademe and DIY?

As with any method of scientific sampling, there are always limitations associated with the collection of data, methodologies used, analysis and interpretation of results. Three major points are listed below:

  • DIY kits often produce discrepancies such as false negatives, or false positives, which can be very confusing and misleading. You will likely end up calling in the professionals anyway!
  • DIY kits are not yet sensitive enough to detect lower levels of methamphetamine in accordance with the current National Guideline value of 0.5ug/100cm2. You may discover after you purchased the property that you have a methamphetamine problem.
  • DIY results will not hold up in a court of law if you find your tenant has caused contamination.

 So, if I do call in the professionals, how do I choose a reputable company?

 You want to be assured that the Company you choose is capable of identifying and communicating any significant contamination issues within the property. Be METH WISE and ensure the Company you engage:

  • Is Suitably Qualified and Experienced
  • Is Independent & Reputable
  • Does not use DIY kits
  • Uses IANZ Accredited Laboratory Services
  • Provides you with a Comprehensive Report

 A committee is in the process of developing a new standard (NZS 8510) covering the testing and remediation of homes contaminated by the manufacture or use of methamphetamine. This will include guidance on best practice sampling methodologies and procedures. The standard will ensure a consistent and effective approach is in place to manage the testing and remediation of contaminated homes and their contents. Ensure your Consultant is aware of these future changes.

So, why not call in the professionals for $169 + gst and receive quality results you can trust?

Be METH WISE – Test Before You Invest.

Stephanie Brookes
Senior Environmental Scientist (BSc)
Meth Wise
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