The final piece of the year-end puzzle

Leaving the best helpful hints until last - here's some info and key dates you need to remember about filing tax returns, claiming on donations, provisional tax and current tax rates.

FILING A TAX RETURN
Timing
Tax returns are required to be filed by 7 July each year unless the taxpayer has a late balance date (i.e. a balance date from 1 April to 30 September) in which case they must be filed 4 months after year-end.  Taxpayers that are registered with a tax agent are granted an extension of time for filing.  Taxpayers on an agent’s list should also be aware that this extension of time may be withdrawn by the Inland Revenue for persistent non-filing by the extended date.  A period of good compliance is necessary before the Inland Revenue will allow a taxpayer to extend their filing date again.

Statute Bar
Unless a return is fraudulent or omits income, the Commissioner is prevented from increasing a tax assessment once a four year time bar has passed.  For tax returns filed on 31 March 2015, the time bar period expires on 31 March 2019.  Nb. Filing a tax return just one day later on 1 April 2015 will extend the time bar period by another whole year.
 
Donations Claims
Individuals cannot claim deductions for donations, but instead can claim 33⅓% cash rebate back for charitable donations made to qualifying charities or organisations.  An IR526 should be completed for individuals who have not or are not able, to take advantage of an employer’s payroll giving system (when donations are made directly through wages or salary) in order to claim the donations rebate.
 
PROVISIONAL TAX
Having reflected on the above issues, now is also a good time to more accurately calculate your provisional tax requirements for the 2015 year.  For the majority of taxpayers, 7 May 2015 is the third and final instalment date for 2015 provisional tax.  If the actual year end result will be higher than that calculated under the standard uplift, a further voluntary instalment of provisional tax could be made to top up the legal standard uplift liability in order to save use of money interest payable on underpaid tax, possibly resulting in cash savings.  Conversely, if the actual result will be considerably lower, consideration could be made to switching from the standard option to the estimation option and seek a refund of taxes overpaid.

TAX RATES
2015 Income Tax Rates
Finally, a reminder is provided below of the income tax rates that apply for individuals, companies and complying trusts.
 
Individuals
0 - $14,000                   10.5%
$14,001 - $48,000       17.5%
$48,001 - $70,000       30%
$70,001 or more         33%
 
Companies            Complying Trusts
28%                              33%
 
 

 

 

2015/2016 Tax Calendar
Deloitte’s Tax Calendar with tax rates, handy facts and important tax dates for the 2015/2016 income year will be available shortly.  Download a copy here.

The above is a list of the common tax issues for SMEs and is by no means an exhaustive list.  Businesses that have operations in international markets, or which are subsidiaries of overseas companies will also need to consider international tax issues such as thin capitalisation and transfer pricing.    

For assistance with any of the issues listed above please make contact with your Deloitte advisor.

 


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