1. Year-End Tax Planning

2. Tax Working Group Recommendations

3. Rate Alignment Bill Passed By Parliament

4. Domestic Reverse Charge, Change of Use and Supplies of Accommodation 

5. Depreciation and Residential Rental Properties

6. FBT Rate for Low Interest-Loans Reduced

7. Online Annual Client Questionnaires

8. Easter Closure

9. Public Holidays

1. YEAR-END TAX PLANNING

The Government has recently indicated it is considering further reductions in individual marginal tax rates and will provide further detail on that in the May 2010 budget. The main aim of tax planning is deferral of tax, and there may be additional and permanent tax benefits in deferring recognition of income this year in anticipation of those reductions in tax rates but there is no certainty until the announcements are made.

Timing issues

Deferral of income uses disclosure options that delay recognition of income to later years and usually require the implementation of tax planning measures prior to year end. Those include-

timing of invoices;

accruing of expenses;

using the cash basis method of accounting for tax purposes.

Permanent tax savings

Permanent tax savings use tax planning opportunities to save tax and they too usually require implementation of tax planning measures prior to year end. Those include-

• forecast of income for the current year and review of tax planning to take best tax advantage of the differences between company tax rate of 30% and the marginal personal tax rates of 33% for income over $48,000 and 38% over $70,000. Consider voluntary tax payments on or prior to the 2010 third provisional tax date of 7 May 2010 to ensure that there are sufficient credits in the 2010 tax accounts to minimise use of money interest;

• payment of company dividends prior to 31 March 2010 to utilise imputation credits on retained earnings derived prior to 31 March 2008 and taxed at 33%. Dividends from 1 April 2010 will have a maximum imputation ratio of 30/70 and that may result in surplus imputation credits in the imputation credit account for those retained earnings not distributed prior to year end;

• delay payment of dividends on retained earnings derived after 1 April 2008 and taxed at 30% to overcome need to pay RWT on those dividends, and possibly to take advantage of the expected changes in the marginal tax rates;

• write off of assets and review of depreciation schedule for asset splitting and use of appropriate rates for asset purchases during the year;

• write down of trading stock to the lesser of cost or market value;

• payment of donations for donation rebate;

• payment to the KiwiSaver account to top it up to $1042.86 before 30 June 2010.

Compliance issues

Tax compliance matters need to be attended to at year end. They include-

• stock takes;

• review of debtor’s ledger and write off of bad debts prior to year end;

• attending to RWT disclosures for interest on shareholder current accounts and dividends awarded prior to year end;

• review of Imputation Credit Account (ICA) to ensure it will be in credit at 30 June 2010, and all 33% imputation credits allocated;

• Qualifying Company (QC) elections;

• valuation of overseas investments that are caught in the Foreign Investment Fund (FIF) rules;

• election to the Ratio Option scheme for 2011;

• election to six monthly GST periods and two instalments of provisional tax in the 2011 year;

• election to the annual and income year basis for accounting for FBT.

The matters above are discussed in more detail as follows:

Income Deferral

Income deferral requires the postponement of entitlement to that income until after year end.

The cash basis method of accounting for income and expenses is available to individuals who earn income principally from personal exertion and do not have large amounts of stock, accounts receivable, employees or assets to generate income.

Taxpayers that use the accruals method should consider deferring the issue of invoices, if practical, until after year end. That may not be as tax effective for taxpayers in manufacturing and large construction industries that need to account for work in progress but will have a significant tax effect on professionals, labour-only contractors and taxpayers in small to medium sized businesses that do not need to account for work in progress at year end.

Creditors & Accruals

Recognition of expenses in the current year requires the expenses to be incurred or prepaid prior to year end, and the benefit of the expense realised in the year. The deduction must be deferred to the subsequent year where the benefit is realised in the next income year.

There are, however, exceptions to that rule and those provide the means to bring forward deductions to the current year.

Those include;

• prepaid rental for land and buildings up to $23,000 if the rental is due for a period not exceeding six months after balance date;

• payments in respect of service or maintenance of plant and equipment or machinery where the prepaid amount is less than $23,000 and the service and maintenance is actioned less than three months after balance date;

• advanced bookings for travel and hotel or motel accommodation can be deducted in the current year where the amount is less than $12,000 and the prepayment is less than six months after balance date. (Clearly the travel and accommodation would need to be business related.)

Allocation of income and tax planning

There needs to be care in planning for allocation of income.

There are limits to the extent to which income can be allocated to relatives or associated parties in planning for tax. The Commissioner can reallocate income to relatives where the remuneration is excessive. The position is less clear where the remuneration is less than market. In Penny and Hopper the High Court found that there is nothing in the Act to support the requirement that salaries be commercially realistic. In that case, the IRD argued avoidance and that the taxpayers paid themselves a salary less than market in order to save tax. Although unsuccessful, the IRD is appealing the case.

The tax plan will need to consider payments of tax and balances in the tax accounts. Non individuals (including companies and trusts) are liable for use of money interest on residual tax and therefore need to plan to load the 2010 tax account for the tax liability on retained income to minimise interest. That can be done by voluntary payment of tax preferably on or before 7 May 2010 (2010 third provisional tax date), the transfer of tax credits from associated parties on provisional tax payment dates or purchase of provisional tax credits from tax pooling agencies. The latter two can be done later in the year.

Consideration should also be given to the fact that the level of residual income tax an individual may have for their 2009-2010 income year before being subject to UOMI on provisional tax instalments is now $50,000 (previously $35,000).

School age children can earn $2,340 per year without their wages being required to be reported on the Employers PAYE schedule. As a result of the Child Tax Rebate, this income is effectively tax free. Records still need to be kept along with the employers normal payroll records.

Bad Debt Deductions (before 31 March)

There is an allowable deduction for bad debts where:

• the decision to “write off” the debt is a genuine commercial decision. It is not necessary to show that legal or collection action has been taken to recover the debt in circumstances where this action would be futile;

• to support the decision to “write off” the debt there is a director’s resolution or an authorisation by a senior employee;

• the required accounting/journal entries made to write off the debt in the books must have occurred before balance date.

The write off may also provide a GST recovery where the tax payer is registered on the invoice basis.

Stock Valuation

A taxpayer with turnover (in the 12 months leading up to the taxpayer’s balance date) of less than $1.3 million need not value trading stock at year-end if it can be reasonably estimated that the taxpayer has less than $10,000 worth of trading stock ($5,000 prior to 1 April 2009).

For other tax payers a stock take needs to be done at 31 March 2010. Stock sheets need to be prepared and should provide sufficient detail to identify items of trading stock and the retail price of each item. Stock must be valued using a cost valuation method, or when market selling value is less than cost, market selling value may be used. The value is recorded exclusive of GST. Sufficient details should be recorded at the time of the stock take to determine the value.

There may be an opportunity this year to reduce the value of trading stock to market selling price. The current economic conditions are very different to previous years and that may provide an opportunity to value some lines of stock at less than cost. If there is a write down then there needs to be reasonable evidence to support the value at year end.

Consumable Aids

Consumable aids are items used in the manufacture or production process but not a component in the final product. Consumables of less than $58,000 at balance date can be written-off and not added into your trading stock on hand at year-end.

Donation Rebates

There is no cap on the rebate for gifts to approved charitable organisations. Individuals will be entitled to a rebate of 33 1/3% on the gift, provided the gift is less than total taxable income of the donor for the year. Companies are entitled to a deduction for gifts up to the amount of the taxable income for the year but the tax relief of 30% is less attractive than that offered to individuals through the rebate. Trustees can treat income as beneficiary income to approved charitable organisations and qualify effectively for the same tax relief as individuals. The charity must be included in the list of beneficiaries in the trust deed. The gift needs to be a donation of money and made prior to 31 March 2010.

Interest on Overdrawn Current Accounts

There are fringe benefit tax (FBT) implications where employers provide interest free or concessionary loans to employees (including shareholder employees) or associates of employees.

Interest should be charged at the specified FBT interest rate during the period of the loan. The interest is only deductible to the shareholder if the funds drawn are used by the shareholder to derive taxable income. Interest of more than $5,000 needs RWT deducted and that must be remitted to the Inland Revenue Department by 20 April 2010. An annual RWT reconciliation statement must be filed with the Inland Revenue Department by 31 May 2010.

Employee Holiday Pay & Bonuses

A tax deduction is allowed in the 2010 year for holiday pay and bonus payments to employees if they are paid by 2 June (i.e. within 63 days of balance date).

Fringe Benefit Tax (FBT)

Employers should consider the possible FBT savings from applying the multi-rate approach where:

• benefits provided to employees whose employment remuneration for the year is less than $70,000 (previously $60,000);

• benefits are provided to former employees;

• individual recipients cannot be identified.

The election is made in the FBT return in the fourth quarter. The rates start at 14.29% and progressively increase to 61.29%. Those not on the multi-rates use a flat rate of 64%.

Companies can elect to account for FBT on an income year basis for benefits provided to shareholder employees and account for FBT on terminal tax date of the company. The election for the 2011 year needs to be made prior to 30 June 2010. The company will then account for FBT for the 2011 year on 7 April 2012.

The amount of unclassified fringe benefits which can be supplied to employees without incurring FBT from 1 April 2009 is $300 per employee per quarter (previously $200) and $22,500 (previously $15,000) in total for all employees.

Imputation Credit Account (ICA)

Company ICAs need to be in credit at 31 March (irrespective of balance date) otherwise penalties will be imposed. Voluntary tax payments (equal to the debit balance) can be made to put the balance in credit. If payment is made prior to 31 March 2010 no penalty will be incurred. The company will incur a penalty of 10% and use of money interest for payments made after 31 March 2010 but before 20 June 2010 (final date for payment) to balance that account.

Retained earnings that carry imputation credits at 33% (earned prior to 1 April 2008) need to be distributed by 31 March 2010 to utilise the maximum imputation ratio of 33/67. Fully imputed dividends from 1 April 2010 have an imputation ratio of 30/70. That may result in surplus imputation credits in the ICA for retained earnings carried forward in the company.

Dividends that carry imputation credits at 30% for non corporate shareholders will require payment of Resident Withholding Tax (RWT) of 3%. The RWT needs to be paid to the IRD by the 20th of the month following payment (ie for a dividend declared and paid on 31 March 2010, the RWT needs to be remitted to the IRD by 20 April 2010). In planning for year, consideration should be given to timing of dividends and compliance requirements, and the option of deferral of the 2010 year dividend until after 31 March 2010.

Qualifying Company Election

Companies that wish to enter the qualifying company regime (ie QC and LAQC) for the 2011 year need to make the election prior to 31 March 2010. Companies incorporated in the year ending 31 March 2010 have until the date the 2010 tax return is filed to make the election for the 2010 year.

Companies that wish to revoke qualifying company status in the 2010 year must do so prior to 31 March 2010. The revocation is effective from 1 April 2009.

Ratio Method Election for Paying Provisional Tax from 1 April 2010

The Ratio Method is available to GST registered provisional tax payers (except those registered six monthly or with provisional tax of more than $150,000 pa). Election into the scheme commits the taxpayer to provisional tax payments on GST dates. The Inland Revenue Department determines a ratio to calculate the provisional tax based on GST in each period and the provisional tax is paid on the GST date. Those that elect into the method are not liable for use of money interest on underpayment of provisional tax so the method may suit companies and trusts, and individual tax payers liable for use of money interest. It may also suit taxpayers with seasonal or fluctuating income, and assist in the management of cash flow.

The election into the Ratio Method for the 2011 year needs to be made prior to 31 March 2010. The election can be made by telephone, and the Inland Revenue Department will confirm acceptance to the scheme in writing.

Provisional Tax & Six Monthly GST Registration

GST registered provisional taxpayers are able to limit the number of provisional tax payments to two if their taxable supplies in a 12 month period are less than $500,000 (GST excl) and they apply to the Inland Revenue Department to change GST registration to 6 monthly periods.

The application needs to be made by 31 March 2010.

KiwiSaver Compulsory Contributions

The standard contribution rate for employees to KiwiSaver is 2% of an employee’s gross salary or wages, with an option to contribute at a higher rate of 4% or 8%. Employers are required to contribute 2% of gross salary to each enrolled employee’s KiwiSaver account and employer contributions must be paid by the employer to the IRD.

Self-employed people and other people who are not employees may contract directly with a KiwiSaver scheme provider and make contributions directly to a KiwiSaver account.

All member contributions to KiwiSaver will be matched by a corresponding member tax credit of up to $1,042.86 a year ($20 per week). That includes contributions made by members who are employees and any other members provided that:

• the member is aged over 18;

• the member has not reached the age at which they can make withdrawals from their KiwiSaver account;

• the member lives in New Zealand (subject to some minor exceptions).

KiwiSaver has a June year end so members need to make sufficient contributions by 30 June 2010 to maximise their entitlement to the available tax credit of $1,042.86 by that date.

Foreign Investment Funds (FIF) Portfolio and Valuations from 1 April 2010

Taxpayers that have offshore investments that are caught by the FIF rules will need to value the portfolio at market value at 31 March 2010. The value will be used to calculate the fair dividend rate for the portfolio for the 2011 year, and the comparative value method for both the 2010 and 2011 years. Those taxpayers that have their portfolios managed will receive that information in the year end report.

Taxpayers should review their portfolio prior to 31 March 2010, and if practical trade stock to minimise the market value of the offshore portfolio or plan to exempt the taxpayer from the FIF regime for the 2011 year. Individuals with offshore portfolios with a cost that does not exceed $NZ50,000 at anytime during the year are excluded from the regime. Australian investments listed on an approved index of the ASX (eg All Ords Index which is the 500 largest listed companies) and GPG shares (excluded until 1 April 2012) and investments in the NZ Investment Trust are excluded from the portfolio valuation.

PIE Investments – Prescribed Investor Rate (PIR)

Investors in a portfolio investment entity (PIE) such as a KiwiSaver scheme need to provide a new Prescribed Investor Rate (PIR) to their provider. The rates for individuals have changed with the change in individual tax rates and the providers need to be advised of the change in PIR to tax the investment at the correct rate. The new PIR is effective from 1 April 2010.

New Resident Withholding Tax (RWT) Rates from April 2010

Investors in interest bearing investments need also to notify providers of any change to the RWT rate with the change in those rates from 1 April 2010 (refer article 3 in this Newsletter).

2. TAX WORKING GROUP RECOMMENDATIONS

The Tax Working Group (TWG) held a one-day conference on 1 December 2009 to discuss tax reform and released their report A Tax System for New Zealand’s Future on 20 January 2010.

The Group promote significant change to the current tax system. The main recommendations of the Group are as follows:

• The company, top personal and trust tax rates should be aligned to improve the system’s integrity. If at any time this is no longer feasible due, for example, to global pressure causing the company rate to reduce, at the very least the trustee rate, top personal tax rate and top rate for portfolio investment entities (PIEs) and other widely-held savings vehicles need to be aligned, accompanied by the introduction of suitable fiscal integrity measures;

• New Zealand’s company tax rate needs to be competitive with other countries’ particularly Australia. Balancing this factor against the integrity benefits of a fully aligned system will guide choices between an aligned and non-aligned system;

• The imputation system should be retained. However, this may need to be reviewed if Australia decides to move away from its imputation system.

• The top personal tax rates of 38% and 33% should be reduced as part of an alignment strategy and to better position the tax system for growth. Where possible, the Group would like to see a reduction in personal tax rates across-the-board to ensure lower rates of tax on labour more generally. This could be achieved as part of a package to compensate for any increase in GST;

• The tax base needs to be broadened to overcome existing biases in the tax system and to improve its efficiency and sustainability, and to maintain tax revenue levels with reductions in corporate and personal tax rates;

• The most comprehensive option for base-broadening with respect to the taxation of capital is to introduce a comprehensive capital gains tax (CGT). While some view this as a viable option for base-broadening, most members of the Group have significant concerns over the practical challenges arising from a comprehensive CGT and the potential distortions and other efficiency implications that may arise from a partial CGT;

• The other approach to base broadening is to identify gaps in the current system where income, in the broadest sense, is being derived and systematically under-taxed (such as returns from residential rental properties) and apply a more targeted approach. The majority of the Group support detailed consideration of taxing returns from capital invested in residential rental properties on the basis of a deemed notional return calculated using a risk-free rate;

• Most members of the Group support the introduction of a low-rate land tax as a means of funding other tax rate reductions;

• The following other options have been identified for introduction in the short term:

• GST should continue to apply broadly. There should be no exemptions. Most members of the Group consider that increasing the GST rate to 15% would have merit on efficiency grounds because it would result in reducing the taxation bias against saving and investment. However, any increase in the GST rate would need to be accompanied by compensation to those on lower incomes. This would significantly reduce the net revenue raised from a higher GST;

• There should be a comprehensive review of welfare policy and how it interacts with the tax system, with an objective being to reduce high effective marginal tax rates. Any family receiving WFF and with family income above $48,000 faces an effective marginal rate of 53% or 58% on the primary earner. For many secondary earners in these families the tax rate on any extra income is 41% or higher. Further marginal rate effects arise from other forms of social welfare support, particularly where they abate with income;

• Government should introduce institutional arrangements to ensure there is a stronger focus on achieving and sustaining efficiency, fairness, coherence and integrity of the tax system when tax changes are proposed.

The Government has signalled that it will adopt a number of the recommendations and that there will be further announcements in the May 2010 budget.

NEW LEGISLATION

3. RATE ALIGNMENT BILL PASSED BY PARLIAMENT

Legislation introduced in the Taxation (Consequential Rate Alignment and Remedial Matters) Bill received the Royal assent on 7 December 2009 to become the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (No 63 of 2009). The legislation was introduced on 21 July 2009 and passed its final stages in Parliament on 26 November 2009.

Resident withholding tax rates on interest

The main feature is the alignment of resident withholding tax (RWT) rates on interest paid to individuals, to bring them into line with recent changes to personal tax rates. The new rates for individuals will be 12.5%, 21%, 33% and 38%, depending on their income.

There is a new default rate of 38% for people who do not elect an RWT rate with their bank. This default rate will apply to accounts opened from 1 April 2010. There is also a transitional period for people who have an existing bank account at 1 April 2010 and who are on the current RWT default rate of 19.5%. They will automatically be shifted up to a 21% rate for a year from 1 April 2010.

PIE tax rates

The tax rates on portfolio investment entities (PIEs) are aligned with the new personal tax rates, so that PIE rates will be 12.5%, 21% and 30%. Effective 8 December 2009.

Other amendments

Other amendments include:

• Amending the current requirement for the IRD to issue personal tax summaries. The Commissioner can now choose to issue an income statement where he considers the person has received income in a tax year. Effective 8 December 2009;

• Clarifying the tax remedy to correct minor errors in a single GST, FBT or tax return (involving $500 or less in tax). Those can be corrected in a subsequent return. Effective 8 December 2009;

• Creating a new tax code SB for secondary employment earnings for an employee whose annual income is not more than $14,000 pa (12.5%) and that applies for the 2010-11 and later income years. Other changes to tax codes from 1 April 2010 include S for secondary employment earnings for an employee whose annual income is not more than $48,000 (21%), SH for secondary employment earnings for an employee whose annual income is more than $48,000 but is not more than $70,000 (33%) and ST for secondary employment earnings for an employee whose annual income is more than $70,000 (38%). There is a new tax code NSW for nonresident seasonal workers and that was introduced 1 April 2009 (15%);

• Change of withholding tax rules for horticulture and viticulture. The new rules limit the application of the present rules (horticultural contract work) that apply to pruning, thinning, picking and packing to the supply of labour for any work in cultivation (cultivation contract work) and excludes post harvest work and services provided by formal management entities where those entities are responsible for payment for services provided. The rate is unchanged at 15% and there is a requirement that the hirer account for withholding tax on such payments using a WT tax code unless the contractor has an exemption certificate. The rule applies from 1 April 2010;

• Amending the current requirement to allocate beneficiary income within six months of the trust’s balance date. This does not fit well with tax agents’ work schedules as frequently they have to give priority to trust accounts to ensure the six-month rule is met. The changes allow the income allocation to be made in the later of the following periods:

− six months after balance date or

− the earlier of:

• the time in which the tax return is due; or

• the time it is filed.

The amendments apply for the 2010 and later tax years.

DISCUSSION DOCUMENTS & INTERPRETATION STATEMENTS

4. DOMESTIC REVERSE CHARGE, CHANGE OF USE, AND SUPPLIES OF ACCOMMODATION

The Government released the discussion document GST: Accounting for land and other high-value assets on 5 November 2009 and that provides a number of options to help resolve GST neutrality issues in accounting for GST on transactions involving high value assets.

The document considers the following proposals:

• Domestic reverse charge — Introduces a domestic reverse charge to transactions involving land, “going concerns” and assets with a value of $50 million or more. (This mechanism proposes to shift the obligation to account for GST from the seller to the buyer). Refer to December newsletter.

• Strengthening the application of rules relating to taxable supply of over $225,000 involving sale of land with a deferred settlement — The present rules apply to the vendor and requires the taxable supply to be accounted for on an invoice basis. The Government intend to amend the rules so that they apply only to the purchaser and the purchaser can claim the input tax on a payments basis.

• Timeframes for releasing refunds — Amends the legislation to specify that the 15 working-day rule refers to the issue of the notice by the Inland Revenue Department rather than receipt of the notice by the taxpayer. Presently the Inland Revenue Department must refund the taxpayer within 15 days of filing the GST return or provide notice of investigation within the 15 working days. The new rules will provide the Department more time to review GST assessments.

• Transactions involving nominations — Clarifies the effect of nominations on taxpayers’ entitlement to input tax deductions. The amendments will allow the arrangement to be tested for economic substance over form.

• Sale of property in satisfaction of debt — Applies the reverse charge rules to the mortgagor in situations of mortgagee sales. Previously the mortgagor could escape the GST liability by excluding the transaction from the taxable supplies. The GST liability remained with the mortgagee and in most cases difficult for the Inland Revenue Department to recover.

• Input tax entitlements and adjustments for change-in-use — Replaces the existing change-in-use adjustment rules with an approach that apportions input tax deductions according to the relative use of the goods and services. The existing change-in-use adjustment approach allows an input tax deduction of 100% on purchase where the goods and services are used principally for business (i.e. more than 50%) and an annual output tax adjustment for the non taxable use, or where the goods and services are purchased principally for private or exempt use there is an annual input tax adjustment for that use. Those rules will be replaced by an approach that will adjust the input tax deductions on purchase in line with the actual use of goods and services during the period of ownership. It is proposed that:

- On acquisition, unless an exclusion applies, the portion of a deduction that a GST registered person can claim must correspond with the portion of the asset that is intended to be used for taxable purposes;

- In subsequent years, the person may be required to adjust the deduction claimed if the extent to which the asset is used for taxable purposes is different from the intended taxable use of the asset;

- A maximum number of adjustments that a person may be required to make will apply for all goods and services other than land and will vary according to the asset’s value or estimated useful life of the asset;

- A special rule will apply to the sale of goods and services for which full deductions have not been claimed.

• Supplies of accommodation — Amends the definitions of dwelling and commercial dwelling to clarify the boundaries of those definitions. Accommodation provided by registered persons is taxable for GST purposes unless it is supplied in a residential dwelling. In such cases the supply is an exempt supply. The term dwelling excludes a commercial dwelling. The supply of a commercial dwelling by a GST-registered person is normally subject to GST. There is however some uncertainty about whether certain supplies are within the definition of a “commercial dwelling”. To address the concerns, it is proposed to expand the list of types of accommodation that are explicitly included in the definition. These will include homestays, farmstays and bed and breakfast establishments, and a comprehensive catch-all provision that covers any establishment similar to any of the kinds referred to above.

5. DEPRECIATION AND RESIDENTIAL RENTAL PROPERTIES

The Inland Revenue Department released the interpretation statement INS0064, Residential rental properties — depreciation of items of depreciable property on 22 February 2007. It states that if an item in a residential rental property is distinct from the building and it meets the definition of “depreciable property”, it may be separately depreciated. If an item is part of the building, it cannot be separately depreciated, but can be depreciated with the building.

The Commissioner will apply the “combined asset vs component assets” test to determine whether a particular item is part of the building or separate from it by assessment of physical and functional status of the item.

• Physical separation:

- Does the item look like a physically separate item from the building?

- That is the nature and degree of the items affixation to the building?

- Can the item be removed and relocated elsewhere without difficulty?

• Functional separation:

- Does the item do something (ie have a function) that is different to the function of the building?

- Is the building functionally complete without the item?

If it can be concluded that an item is both a distinct physical unit and performs a separate function independent from the building, then it is a separate item and can be depreciated accordingly. If the item is not a distinct physical unit or the building is regarded as incomplete without that item, it is part of the building and not depreciated separately.

The interpretation statements provides a number of examples that give a practical application of the test to some items.

6. FBT RATE FOR LOW-INTEREST LOANS REDUCED

The prescribed rate used to calculate fringe benefit tax on low-interest, employment-related loans will fall from 6.41% to 6.00% for the quarter beginning on 1 October 2009.

7. ONLINE ANNUAL CLIENT QUESTIONNAIRES

We will be issuing the year end questionnaires electronically this year. The questionnaires are web-based, simple and secure, questions are automatically modified as answers are given meaning it is customised and relevant to suit your business.

We will send an email to those clients for whom we hold an email address that will provide instructions to complete the questionnaire. We ask that you retain the email until you are in a position to respond to it. We will send reminders to those who have not completed the questionnaire and if we don’t get a response we will issue the questionnaire in paper form.

It is important you advise us of any email address changes or if you would like communication from us to be sent to your business or home email addresses. If we don’t hold a current email address, we will issue the questionnaires in paper form.
We hope we are simplifying the task of completing the questionnaires for you and welcome any feedback and/or suggestions.

8. EASTER CLOSURE

The office will close at 5 pm Thursday 1 April 2010 and reopen on Wednesday 7 April 2010.

9. PUBLIC HOLIDAYS

With ANZAC day falling on a Sunday only employees who work on this public holiday are entitled to be paid time and a half for the hours worked and they are entitled to a day in lieu (alternative day). For employees that don’t work on that day there is no entitlement to a day in lieu. The Monday following is not a public holiday.

However, for Easter the public holidays are Good Friday and Easter Monday while Easter Sunday is not. Therefore, employees who work the Sunday are paid at their normal rates and are not entitled to a day in lieu.