Our highlights of the key takeaways for you from this years budget....

Changes to personal income tax rates take effect from 31 July and have some consequences. 

Existing tax thresholds apply for the first 3 months and 30 days of the 2024–25 tax year and the new thresholds for the remaining period. This means that for the 2024-25 year only, composite tax rates apply:

Our advice is to check and ensure your payroll providers make the necessary system changes for 31 July.  Changes need to be in effect for the first payroll payment made after this date.

Tax rates for organisations remain as per previous government announcements:

The changes to personal income tax rates also affect fringe benefit tax (FBT), employer superannuation contribution tax (ESCT), retirement scheme contribution tax, RWT and prescribed investor rates.

The new thresholds for FBT will not apply until 1 April 2025.  For the year beginning 1 April 2024 a new attribution method formula effectively accounts for the newly introduced income tax thresholds.  This is the same for ESCT with new rates also only applying from 1 April 2025.

RWT is affected from 31 July 2024. Taxpayers who pay RWT on interest and dividend income should consider whether they should change their elected RWT rate to align with increases to the personal income tax threshold.

A new childcare rebate, FamilyBoost, is available from 1 July. Eligible families can seek reimbursement up to 25% of their early childhood education (ECE) fees, to a maximum of $150 per fortnight (taking into account the 20 hours of ECE and the Ministry of Social Development’s childcare subsidy). The maximum amount per fortnight reduces for families with incomes over $140,000 per year; families with incomes over $180,000 are not eligible. FamilyBoost will be administered by Inland Revenue - you will need to apply for this rebate directly with IR.

The Independent Earner Tax Credit has also been reviewed. It’s currently available for people earning between $24,000 and $48,000 per year and provides a tax credit of up to $20 per fortnight. From 31 July 2024, the upper income limit will be extended from $48,000 to $70,000 per year (though the credit value starts to be reduce when a person earns more than $66,000 per year).  If you are eligible, these threshold adjustments will automatically be incorporated in your tax returns. 

The in-work tax credit supporting low-to-middle income working families with children will also increase by up to $50 per fortnight from 31 July 2024.  

It's nearly ACC invoice time.  Let us know if we need to make any changes to your information before ACC begin invoicing in July:

Classification Unit (CU) - this affects the levy amount you will pay, so it's important to make sure ACC have it right.

Trading Status - if you're no longer trading, we need to let ACC know so you don't get charged and we can close your policy.

If you have a Xero subscription, you may have noticed Xero are planning changes to their plan types and pricing later this year. 

We're talking to them about these changes on your behalf, to ensure you transition to the plan that's the best fit and best value for your needs. 

Keep an eye out for more information from us on what these changes will mean for you when the new plans come into effect in September.