Welcome To The 2019/20 Financial Year
The first of April brings with it a new financial year for New Zealanders so this week we thought we would cover the major changes around Taxation and KiwiSaver that kick in from 1 April 2019.
Tax Refunds and Scams
The IRD have made income tax refunds automatic for most taxpayers from 1 April 2019. If the IRD has your details on file your tax refund will be paid automatically between late May and July. If you have used automatic tax agent services previously your refund may still be paid to them instead so now is a good time to check your tax and contact information with the IRD.
With this change it’s also important to be on the lookout for tax refund scams. The IRD has already reported two separate phishing email scams being sent out this year. The IRD will never provide your tax refund amount in an email, will always redirect you to myIR for any personal/sensitive information and will never demand payments through gift cards.
Finally, if you’re receiving automatic refunds but have income protection and/or some other personal insurance policies in place, we strongly recommend getting in touch with an accountant as these may be tax deductible and will likely not be covered in your automatic refund.
KiwiSaver
On the KiwiSaver front the new financial year brings in 6% and 10% contribution rates for savers – in addition to the existing 3%, 4% and 8% options. These rates should help KiwiSavers ramp up their retirement savings at a more gradual pace as the previous jump from 4% to 8% for many was too far, too fast.
For those over 65, you can now opt in to KiwiSaver if you are still working as well. Employers can choose to make contributions in addition and the requirement that new KiwiSaver members over 60 remain in KiwiSaver for at least 5 years before withdrawing funds has also been removed.
These changes bring increased flexibility to the scheme and will help New Zealanders of all generations better prepare for their retirement.
Looking Forward
Whilst things remain relatively calm for the 2019/20 FY, there is a strong chance we will see a number of changes to the taxation system including Capital Gains in the near future. Working with a dedicated accountant early can help minimize the disruption these changes will have on your own tax affairs.
The team at FoxPlan Accounting and Wealth Management are more than happy to have a chat about tax affairs as well as how your accounting can be aligned to your business goals. Email blake.chamberlain@foxplan.nz to get in touch!