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MHK Chartered Accountants Advise On Rules for Accounts Change from 1 April 2015

Monday 29 June 2015, 1:26PM

By Beckie Wright

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AUCKLAND

MHK Chartered Accountants’ recent Newsletter advised on the change in the rules for accounts and also the new PAYE tables for the new tax year. They advise that the new rules are supplied by the tax department, the main difference between what the MHK team did historically, and what they will be required to do from now on, is to tell the IRD about “associated person transactions”. Roughly translated, this means dealings the family, another family company or family trust have with the company. So, if, for instance, people pay their daughter for sticking stamps on envelopes they will need to tell the IRD how much they paid her. A brief list of disclosures of transactions with associated persons includes interest paid by the company, loans made from the company which mostly arises when the shareholders are living beyond their means and need to borrow from the company instead of the other way around. Also included are payments for services received by the company which includes wages, salaries, management fees etc. for each recipient and expenses for acquiring intangible property, which would apply, for example, if someone charged their company for the use of a patent.

Also included is interest paid by the company. Mostly shareholders lend their money interest free to their company, so this won’t affect them. Loans made from the company must also be disclosed and this mostly arises when the shareholders are living beyond their means and need to borrow from the company instead of the other way around. Payments for services received by the company must also be disclosed and this includes wages, salaries, management fees etc. for each recipient and expenses for acquiring intangible property, which would apply, for example, for those charging the company for the use of a patent.

Regarding the new PAYE rates, for those responsible for payroll activities they need to start using the 2015-16 PAYE rates from 1 April. Both the PAYE calculator on the IRD’s website and the PAYE tables (IR 340 and IR341) for the 2015-16 tax year are available at www.ird.govt.nz , (search keywords: paye tables, paye calculator).

The professional team at MHK Chartered Accounts recommend that planning always pays off when collating material for them to prepare annual accounts and the best guide is their questionnaire, so for more information please visit the website at aucklandaccountant.net.nz .