Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.
Please note this sub-forum does not provide professional finance advice. You should seek advice from a licensed financial advisor.

To post in this sub-forum you must have made 100 posts or have Trust status or have completed our ID Verification.

If investing please consider our affiliate link for new accounts: Sharesies.



View this topic in a long page with up to 500 replies per page Create new topic
1 | 2 | 3 | 4
KrazyKid
1212 posts

Uber Geek


  #2620344 11-Dec-2020 22:44
Send private message

Geektastic:

 

I love the way that they think $180k is rich.

 



I love the way you think people earning over 180k are poor.

"People earning wages and salaries in New Zealand - Figure.NZ" https://figure.nz/chart/UnE8CtjDJuqPUk9U 


 
 
 

GoodSync. Easily back up and sync your files with GoodSync. Simple and secure file backup and synchronisation software will ensure that your files are never lost (affiliate link).
rhy7s
542 posts

Ultimate Geek


  #2620363 12-Dec-2020 06:42
Send private message

KrazyKid:
Geektastic:

I love the way that they think $180k is rich.



I love the way you think people earning over 180k are poor.

"People earning wages and salaries in New Zealand - Figure.NZ" https://figure.nz/chart/UnE8CtjDJuqPUk9U


Thanks for this graph, empathy and perspective often seem to decline along that monetary axis.

GV27
5592 posts

Uber Geek


  #2620499 12-Dec-2020 15:07
Send private message

KrazyKid:

I love the way you think people earning over 180k are poor.

"People earning wages and salaries in New Zealand - Figure.NZ"

 

 

 

 

... which arguably proves why this change is so ridiculous. Look at that big bulge from $30K - $80k. 

 

Then consider where the bulk of income tax paid is collected from - we collect most of it from a very small group of taxpayers at the top end. 

 

So we can logically assume that a) this tax is going to hit a tiny amount of taxpayers and b) there is little in the way of meaningful reform for everyone else, meaning the perverse system by which we tax many people with one hand and then through an elaborate government system of transfers, give it back to them with the other, until the people at the bottom pay nothing, if not negative income tax, while we are increasingly reliant on a small group of taxpayers, who at some point, might take exception to people talking about eating them all the time, shall continue unabated.

 

I get a bee in my bonnet about this sort of thing for personal and professional reasons. Once you throw in our student loan threshold (Half Australia's) and repayment rates (Australia's scales with incomes and their top repayment % is lower than our flat rate), the whole tax threshold and student loan repayment system needs a thorough retooling.

 

Instead we've got this dog's breakfast - the "this is the only tax change we'll make" that triggers a swathe of other changes because you've thrown the avoidance cat amongst the pigeons.  




Lastman
306 posts

Ultimate Geek


  #2620561 12-Dec-2020 16:22
Send private message

sen8or:

 

The whole "Ford Ranger - tradie vehicle" being exempt from FBT is factually incorrect.

 

They "can" be exempt from GST if classified as a workplace vehicle. For this exemption to apply, they must be at least 50% load bearing (so here the ranger does qualify), they must be signwritten in the company's usual logo / decal and this can't be easily removable (not magnetic signs) and there must be a policy and written confirmation that they are not available for personal use, they are business use only with travel incidental to/from the place of work being ok. In addition to the letter, "random checks" at least quarterly are to be documented so that confirmation of the company policy is held.

 

granted, the above is IRD tax rules, how many businesses (particularly 1 man band tradies) abide by the rules? Who knows

 

So this means, the ute you see at the rugby club / golf club on the weekend is (most likely) breaking the rules if the company isn't paying FBT for personal use.

 

Where this will hit "average joe worker" is things like workplace medical insurance, staff discounts on purchasing or other "small" benefits all of a sudden increasing in cost that will make some companies think twice about providing the benefit.

 

 

 

 

Many of the vehicles you see around will be “sole trader” so different rules apply and it’s funny how little personal use you do when you’re keeping your logbook. 

 

One way around the personal use restriction is to put people “on call “ as many employee ute situations will be managers of one type or another so any journey will potentially be a callout.


shk292
2736 posts

Uber Geek

Lifetime subscriber

  #2620573 12-Dec-2020 16:42
Send private message

Lastman:

 

Many of the vehicles you see around will be “sole trader” so different rules apply and it’s funny how little personal use you do when you’re keeping your logbook. 

 

One way around the personal use restriction is to put people “on call “ as many employee ute situations will be managers of one type or another so any journey will potentially be a callout.

 

 

I wasn't aware of the double cab ute rule, but now it's been mentioned I'm amazed at how many there are around - I reckon about 30% of the vehicles in the Silverdale centre car park this morning.  Must be an awful lot of people on call


bmt

bmt
574 posts

Ultimate Geek


  #2620588 12-Dec-2020 17:43
Send private message

Handle9:
networkn:

 

We won't introduce any new taxes this term..

 

 

 

No, but you'll hike all the existing ones. Funny how this wasn't something they campaigned on during the election.

 

 

 

 

 



The change in top tax rates was campaigned on. Nothing else has changed, including the formula for calculating FBT.

 

Apparently governments are only allowed to make policy changes if they announced them during the election campaign too.


BlinkyBill
1443 posts

Uber Geek
Inactive user


  #2620589 12-Dec-2020 17:56
Send private message

Lastman:

 

Many of the vehicles you see around will be “sole trader” so different rules apply and it’s funny how little personal use you do when you’re keeping your logbook. 

 

One way around the personal use restriction is to put people “on call “ as many employee ute situations will be managers of one type or another so any journey will potentially be a callout.

 

 

Really? Got a reference for this? I don't think you'll be able to provide one. The only difference available for self-employed relates to treatment of GST.

 

And you can't claim an expense other than actually incurred - so your trip to the supermarket can't be claimed if you are on call.




BlinkyBill
1443 posts

Uber Geek
Inactive user


  #2620592 12-Dec-2020 18:08
Send private message

shk292:

 

Lastman:

 

Many of the vehicles you see around will be “sole trader” so different rules apply and it’s funny how little personal use you do when you’re keeping your logbook. 

 

One way around the personal use restriction is to put people “on call “ as many employee ute situations will be managers of one type or another so any journey will potentially be a callout.

 

 

I wasn't aware of the double cab ute rule, but now it's been mentioned I'm amazed at how many there are around - I reckon about 30% of the vehicles in the Silverdale centre car park this morning.  Must be an awful lot of people on call

 

 

Don't believe everything you read on the internet.


tdgeek
28931 posts

Uber Geek

Trusted
Lifetime subscriber

  #2620615 12-Dec-2020 18:21
Send private message

GV27:

 

... which arguably proves why this change is so ridiculous.

 

Then consider where the bulk of income tax paid is collected from - we collect most of it from a very small group of taxpayers at the top end.  

 

 

Dont follow this, you say the bulk of income tax is at the top end, but that's ridiculous? Should we tax at the bottom end where we DONT get most of it? Or is this politically motivated as usual?


BlinkyBill
1443 posts

Uber Geek
Inactive user


  #2620644 12-Dec-2020 19:26
Send private message

tdgeek:

 

GV27:

 

... which arguably proves why this change is so ridiculous.

 

Then consider where the bulk of income tax paid is collected from - we collect most of it from a very small group of taxpayers at the top end.  

 

 

Dont follow this, you say the bulk of income tax is at the top end, but that's ridiculous? Should we tax at the bottom end where we DONT get most of it? Or is this politically motivated as usual?

 

 

I think GV27 is arguing that the increase in personal tax rate for over $180k earners is ridiculous because it will bring in a relatively small amount (my own recall is about $500m per annum?) from a relatively small group of people (about 50,000) who already pay a disproportionate share of tax revenue, and this is politically motivated.

 

This is all true, but not really relevant because FBT is not paid by the beneficiary of the benefit.


tdgeek
28931 posts

Uber Geek

Trusted
Lifetime subscriber

  #2620645 12-Dec-2020 19:32
Send private message

BlinkyBill:

 

I think GV27 is arguing that the increase in personal tax rate for over $180k earners is ridiculous because it will bring in a relatively small amount (my own recall is about $500m per annum?) from a relatively small group of people (about 50,000) who already pay a disproportionate share of tax revenue, and this is politically motivated.

 

This is all true, but not really relevant because FBT is not paid by the beneficiary of the benefit.

 

 

He said that "the bulk of income tax is at the top end" It makes no sense if the bulk of income tax is from the top end but its ridiculous to tax the top end.

 

Re FBT, yes, its paid by the employer, who may decide not to anymore


GV27
5592 posts

Uber Geek


  #2620835 13-Dec-2020 10:37
Send private message

BlinkyBill:

 

I think GV27 is arguing that the increase in personal tax rate for over $180k earners is ridiculous because it will bring in a relatively small amount (my own recall is about $500m per annum?) from a relatively small group of people (about 50,000) who already pay a disproportionate share of tax revenue, and this is politically motivated.

 

This is all true, but not really relevant because FBT is not paid by the beneficiary of the benefit.

 

 

I get very easily distracted. Yes, FBT paid by employers who may just choose not to give out those benefits anymore - easy enough to say the plebs don't get the benefit but once you throw in things like cars used by salesmen, medical offered as part of employee packages, all that jazz, it will throw a wide net over people who are probably coming off low bases.


BlinkyBill
1443 posts

Uber Geek
Inactive user


  #2620843 13-Dec-2020 11:01
Send private message

Employers can’t “just choose not to give out those benefits anymore”, there are laws against that. Benefits form part of the employment agreement and have the same status as direct remuneration, leave, hours of work etc. In order for an employer to cease providing an FBT’able benefit, they would need to negotiate a cash out and compensate the employee for the lost benefit. Negotiate is key - this can’t be done arbitrarily.

 

When FBT first came in then was a widespread cash out action across NZ, and a very large proportion of benefits that were 100% taxable were cashed up, e.g. provision of a vehicle with no business use, just provided as a benefit.

 

I predict that if the benefit is provided today, the benefit will continue to be provided in the future, unless the benefit has no business-use component at all in which case the admin and cost may be not worth providing.

 

In other words, storm in a teacup. But it’s amazing to me to see how little comprehension people have in respect of tax, benefits, employment law and so forth.


GV27
5592 posts

Uber Geek


  #2620858 13-Dec-2020 12:01
Send private message

BlinkyBill:

 

Employers can’t “just choose not to give out those benefits anymore”, there are laws against that. Benefits form part of the employment agreement and have the same status as direct remuneration, leave, hours of work etc. In order for an employer to cease providing an FBT’able benefit, they would need to negotiate a cash out and compensate the employee for the lost benefit. Negotiate is key - this can’t be done arbitrarily.

 

When FBT first came in then was a widespread cash out action across NZ, and a very large proportion of benefits that were 100% taxable were cashed up, e.g. provision of a vehicle with no business use, just provided as a benefit.

 

I predict that if the benefit is provided today, the benefit will continue to be provided in the future, unless the benefit has no business-use component at all in which case the admin and cost may be not worth providing.

 

In other words, storm in a teacup. But it’s amazing to me to see how little comprehension people have in respect of tax, benefits, employment law and so forth.

 

 

Settle. My 'just choose not to give out those benefits anymore' is obviously referring to what is offered in new contracts - you'll note I didn't suggest employers would rip them out from underneath existing employees who already had a contractual entitlement to it.

 

You're right - many places will probably just continue with existing benefits. Some might feel the renegotiation exercise is too complex and may just implement a sinking lid on benefits that dwindles with staff turnover. But would bases increase for new staff members in line with previously offered fringe benefits? That I'm not sure on.


sen8or
1674 posts

Uber Geek


  #2620860 13-Dec-2020 12:07
Send private message

The IRD's rules on callout are quite specific, simply being on call is not reason enough to drive your company car on weekends for personal use, you actually have to be attending an emergency call out. Again, this is "tax rules as written", the real world application of those rules is likely to be quite different (unless the IRD really wanted to stick it to someone to either make an example or if there were multiple breaches of other rules). 

 

If you are on call, it is highly impractical to stop what you are doing, drive home, pick up work vehicle and attend to callout. This might cut it if it was infrequent trips down to the shops, but if the vehicle was parked at golf club / rugby club / boat ramp etc on a regular basis I think you'd have a hard time arguing (and yes, they can and will monitor vehicles if they are really looking to enforce FBT).

 

A shareholder partial exemption can apply if a log book is taken over a 3 month period and the % of personal use is then discounted from expenses. I think the log book has to be re-done periodically (3 years?), its been a while since I sat my Tax paper so could be mistaken.

 

There are the rules as written, then there are the real world application of those rules. In some cases, there is little scope for variance and interpretation, in others, its a bit murkier.

 

I suspect much of it comes down to a broader overview of compliance, if you make reasonable efforts to comply with say FBT, your other taxes are clean (GST, Income Tax, PAYE etc all filed on time and paid etc) then you may be more inclined to be able to skirt around the edges of whats ok. The old saying though, hell hath no fury like a woman scorned, especially if that woman is the IRD investigator digging into your tax matters........


1 | 2 | 3 | 4
View this topic in a long page with up to 500 replies per page Create new topic





News and reviews »

One New Zealand Extends 3G Switch-off Date
Posted 11-Apr-2024 08:56


Amazon Echo Hub Review
Posted 10-Apr-2024 18:57


Epson Launches New Versatile A4 Desktop Scanners
Posted 10-Apr-2024 15:31


Motorola Mobility Launches New Android Phones in New Zealand
Posted 10-Apr-2024 14:59


Logitech G Unveils the PRO X 60 Gaming Keyboard
Posted 9-Apr-2024 19:01


Logitech Unveils Signature Slim Keyboard and Combo
Posted 9-Apr-2024 13:33


ExpressVPN Launches Aircove Go Portable Router With Built-in VPN
Posted 26-Mar-2024 21:25


Shure MoveMic Review
Posted 25-Mar-2024 12:47


reMarkable 2 Launches at JB Hi-Fi New Zealand
Posted 20-Mar-2024 08:36


Samsung Galaxy S24 Ultra review
Posted 19-Mar-2024 11:37


Google Nest Wifi Pro Review
Posted 16-Mar-2024 11:28


Samsung Galaxy A55 5G and Galaxy A35 5G
Posted 12-Mar-2024 12:41


Cricut EasyPress Mini Zen Blue launches at Spotlight New Zealand
Posted 12-Mar-2024 12:32


Logitech Introduces MX Brio Webcam
Posted 12-Mar-2024 12:24


HP Unveils Broadest Consumer Portfolio of AI-Enhanced Laptops
Posted 3-Mar-2024 18:09









Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.







GoodSync is the easiest file sync and backup for Windows and Mac