The buoyant covid subsidy funded days are behind us, New Zealand has entered a ‘technical’ recession. This was reinforced by the recent announcement that New Zealand’s corporate tax paid was almost 11% down in the 11 months to May relative to Government expectations.

Here’s how you should be treating employee reimbursements for tax for those working from home this year

Some employers have made, or intend to make, payments to employees to reimburse costs incurred by their employees working from home during the COVID-19 pandemic. Inland Revenue has clarified the tax treatment of such payments made from 17 March 2020 to 17 September 2020.

In addition to the tax loss carry-back scheme, the New Zealand Government has introduced various tax changes to assist businesses and individuals to get through COVID-19.

As part of the Government’s Covid-19 response, on 30 April 2020 legislation was passed under urgency that allows tax losses to be offset against income derived in a previous year, thereby enabling the taxpayer to obtain a refund comprising prior year income tax paid. This temporary tax loss carry-back scheme is available to most taxpayers, e.g. trusts, companies and individuals.

The Government has announced (April 15) a further set of tax proposals to help businesses manage the impacts of COVID-19.  In summary:

There have been several tax changes recently. Some of the important ones are listed here:

The devil is in the detail and there are conditions around employees using mobile phones and how PAYE and FBT rules apply. Recently Inland Revenue provided an easy rule of thumb for employers to adopt.