Johnston Associates Chartered Accountants

Masterminding Brighter Tomorrows

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Invest in your future TODAY!

The Government wants to give you an extra $521.43 every year into your Kiwisaver for FREE! It’s called the annual Government Contribution.

If you’re eligible, for every $1 you put into your Kiwisaver, the government will contribute $0.50 up to a maximum of $521.43 each year. If you do not contribute $1042.86 in the year, the government will still contribute 50 cents for every dollar you save. For example, if you contribute $50 you will get a government contribution of $25.

If you tick every eligibility box on this list for the year 1st July to 30th June, you’ll automatically receive the full contribution;

  • You’re a member of a Kiwisaver Scheme,
  • You’re 18 years or older,
  • You mainly live in New Zealand, 
  • You can’t make Kiwisaver retirement withdrawals yet, and 
  • You’ve contributed at least $1042.86 into your Kiwisaver account.

If you turn 18 during the year, become eligible for retirement withdrawals or join KiwiSaver part way through a year, you’ll still earn the annual Government contribution for the days that you’re eligible.

There is no application needed, no paperwork, no process. Your Kiwisaver provider will make the claim on your behalf, and the contribution will appear in your Kiwisaver account within a month.

By making sure you contribute at least $1,042.86 into your Kiwisaver account each year you could be looking at up to an additional $20,000 for your retirement!

Invest in your future TODAY, by setting you and your family up for Kiwisaver. 

Check your contributions by visiting your “MyIR Login” here https://www.ird.govt.nz/kiwisaver

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Unsure about your ACC? We can help!

business advisory nelson marlborough

Here at Johnston Associates, we offer clients the option of being your agent for ACC purposes. ACC invoices may not always be correct and therefore you can end up paying more for your ACC levies than you need to.

The types of errors that we find are:

  • Wrong classification rates used, resulting in incorrect charging
  • Incorrect liable earnings information
  • Being double charged on PAYE and Shareholder salaries
  • Incorrect charging of levies where changes to the business structure have been made

We have also found, where a recommendation has been made to clients to consider alternative ACC products, that some clients have not followed up on that advice and are therefore not maximising the opportunities offered by the ACC legislation.

One of the services our firm offers clients is an ACC Administration and Advisory service. This involves our firm acting as your agent for all your ACC related matters. The advantages to you are:

All ACC related information will come to us on your behalf

  • We will review the invoices and ensure they are correct
  • We will advise you immediately of payments due
  • You can rest assured in the knowledge that your levies are correct, and have been minimized
  • We will advise you on the best options available to you for your ACC cover
  • We will keep you up to date with any changes in ACC legislation that may affect you

What is my ACC levy? 

Income that you receive from personal effort is liable for ACC earners’ levy.  This levy is charged to cover the cost of rehabilitation and compensation following non-work related injuries. [Read more…] about Unsure about your ACC? We can help!

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It’s Budget Time

Covid-19: It’s Budget Time! The Epic Review, with Westpac senior economist Michael Gordon!

We cover the 2020 Budget’s $50 billion Dollar spend grouped across the four most critical areas, how they impact on your future, and how we believe you can leverage these areas to the best immediate advantage of your business.

We look into the extension of the wage subsidy scheme, the big boost in infrastructure, new grants and subsidies, and how tourism and other job markets are impacted.

We close with Michael Gordon helping us with the hard “where to from here questions” you wanted answered! The facilitator for this event was John Maybury.

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2020 Budget – Rebuilding Together

Let’s start with funding the 50 Billion from where?

To fund the Budget, the Government has forecast bond issuance to $60 billion for the June 2021 year. Crown debt is expected to rise from 19.3% of GDP, up to a peak of 53.6% by 2023. This will surpass the level of 40% seen in 2013 after the GFC and the Canterbury earthquakes. The current Government Debt ratio is 19%, therefore we may have options other Governments don’t who’s current positions are significantly different to ours US (107%), China (50%) and even Australia (45%). Even if we balloon to over 50% by 2023, I think the trouble will be the wont hold that figure, its aspirational.

Budget Outline

The key element is the establishment of the $50 billion COVID-19 Response and Recovery Fund (CRRF), with $20+ billion of it still to be spent over the next 4 years, with $29.8 billion of it committed through Budget 2020 – ten times that which the Government was planning to spend pre-COVID-19.

Treasury indicated that its forecasts and assumptions on Government expenditure and revenue given the current environment are highly uncertain.

The Budget assumes New Zealand’s borders remain closed to international visitors until the end of March 2021 – three months sooner than forecast in the earlier Treasury’s economic scenarios. The scenario relies on a vaccine being developed and distributed by this time.

[Read more…] about 2020 Budget – Rebuilding Together

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It’s time to tax the family not the individual

The family ‘unit’ is perhaps the foundation that safe and healthy and contributing communities are built on. It is hard to argue with this. It’s time our income tax system was changed to reflect this, and to put more money back in families’ pockets.

Some countries operate an elective tax system where couples can choose to be taxed as a couple rather than as individuals. In other words they file a combined or ‘joint’ income tax return and often end up paying less tax in total due to the way personal marginal tax rates work, and the ‘averaging’ effect that filing as a couple achieves in many cases. One could make a rational argument that perhaps that taxing option should always have been available in New Zealand given the central importance of the family unit, and also on the basis of the real world economics of the family unit (and I am talking about family in the broad sense here – not the ‘nuclear family’ concept I was taught about at school).

I believe it is time to adopt this approach in New Zealand. Such an approach I think would reflect the reality of how many or perhaps most family units operate. This was the view of Peter Dunne, former Minister of Revenue. In fact he had a bill before parliament which proposed a tax credit for couples with children, which was designed to achieve something along the lines of what I have described above – a family being taxed on its ‘family income’, rather than each individual being taxed on their personal/individual income. Mr Dunne’s bill passed its first reading in 2010 and made it to Select Committee but then made it no further and then lapsed in 2017.

One of the hurdles identified in respect of that bill at the time was that supposedly under the Bill Of Rights Act such a law would discriminate against those not in a relationship with children. Really? Please forgive my ignorance – I’m not a lawyer and I’m certainly no expert on the Bill Of Rights, however to a lay person is that really “discrimination”? If so, is Working For Families also discrimination since it is in part based on the number of children you have – the same issue raised in relation to Mr Dunne’s bill?

Putting that aside, I can think of no good reason why a family with a single income earner earning $100,000 should pay significantly more tax than the same family with two income earners earning $50,000 each. Families with one primary income earner are being overtaxed. Now is the perfect time to fix that, put more money in families pockets, and have the tax laws more accurately reflecting how many families operate.

Filed Under: Tax