Tax assistance for businesses

From 1 April 2009 there were tax changes for:

• provisional tax
• GST
• employers
• use of money interest (UOMI)
• deducting legal expenditure.

Provisional tax changes

If you use the standard method to calculate your provisional tax payments, there was a change to the way provisional tax is calculated for the 2008/09 and 2009/10 income years - since 1 April 2009 you pay less provisional tax.

The threshold for being charged provisional tax use of money interest (UOMI), based on your residual income tax (RIT), has increased from $35,000 to $50,000 for individuals.

GST threshold changes

The threshold...	has increased from...
for compulsory GST registration	$40,000 to $60,000.
for filing six-monthly GST returns	$250,000 to $500,000. You need to apply for this.
allowing you to use the payments basis	$1.3 million to $2 million. You need to apply for this.

Employer changes

PAYE changes

The threshold for paying PAYE twice each month, based on your annual PAYE and employer superannuation contribution tax (ESCT), has increased from $100,000 to $500,000. However, the threshold requiring you to file electronically using ir-File remains at $100,000.

FBT changes

• The threshold to file and pay FBT annually has increased from $100,000 to $500,000.
• If you're an owner-employee of a "closely held business", you can choose to file FBT returns annually.
• The value of minor unclassified fringe benefits (for example minor gifts such as chocolates and flowers) provided to employees without attracting FBT, has increased.
• The FBT prescribed interest rate for low-interest employment-related loans has decreased.

Decrease in use of money interest (UOMI) rate

This change took effect from 1 March 2009, not 1 April 2009:

From 1 March 2009 the UOMI rate for...	decreased from...
underpaying tax	14.24% to 9.73%.
overpaying tax	6.66% to 4.23%.

Simplified rules for deducting legal expenditure

If you incur business-related legal expenditure, you can immediately deduct up to $10,000 per year from your income tax in the year it was incurred, without needing to distinguish whether it's revenue or capital. This will save you time and expense.