Payroll Giving topped half million dollars in March

Payroll Giving donations of $546,000 in March were the highest monthly total recorded since the scheme began 18 months ago, with the Christchurch Earthquake Appeal clearly convincing people to give more generously than ever, Revenue Minister Peter Dunne announced today.

 “It is very clear that the March figures were hugely boosted by New Zealanders supporting the Appeal, and finding that Payroll Giving is a simple and efficient mechanism to allow them to do that,” he said.

 The March donations came from more than 5100 donors, well up from the average 1400 to 1700 donors using the scheme over the previous six months.

 Payroll Giving has averaged about $129,000 a month since its inception in January last year, but has really taken off this year with $159,000 in January and $162,000 in February. The previous highest monthly total was $209,000 in December last year.

 “The scheme is growing as New Zealanders become more aware of its existence and how simple it is,” Mr Dunne said.

 Mr Dunne said people had also donated $80,000 of their accumulated tax credit for this year to the Christchurch Earthquake Appeal.

 “That has provided a double-win for a very worthy cause,” he said.

 Payroll giving is available to all employers who file their Employer Monthly Schedules to Inland Revenue electronically and is completely voluntary.

 Further information on Payroll Giving can be found at http://www.ird.govt.nz/income-tax-individual/tax-credits/payroll-giving/

 The March figures can be found at http://www.ird.govt.nz/news-updates/like-to-know-payroll-giving-updates.html

Dunne: Earthquake tax treatment bill tabled

A bill tabled in Parliament today will provide real and practical help through the tax system to the people of Canterbury, Revenue Minister Peter Dunne said.

 “Much has been said and written about the February earthquake. This bill represents concrete action to provide help that is both useful and practical” he said.

 Mr Dunne said that the Taxation (Canterbury Earthquake Measures) Bill focused on the tax treatment of a range of situations where people could be negatively affected by current tax law.

 “This is because current law was never designed to cope with disasters of the scale of the February earthquake” Mr Dunne said.

 The main features of the bill include an exemption so businesses would not have to pay tax and gift duty on trading stock they had donated up to 31 March 2012 for relief from the effects of both Canterbury earthquakes. 

 Also exempted from tax would be certain welfare contributions provided by employers, within eight weeks of either the September or the February earthquakes.

 The other two matters in the Bill extend the redundancy tax credit to 30 September 2011, and provide the Commissioner of Inland Revenue with the power in emergency situations to exclude certain income from counting for some benefit abatement purposes. 

 The measures tabled today were first announced in March and Mr Dunne said he was confident that they would be well-received given the positive feedback they had received at that time.

 The Institute of Chartered Accountants has congratulated the Government on moving quickly to alleviate some of the concerns from Christchurch.

 Further earthquake related depreciation tax law changes are to be proposed later this year.

 Detailed information on the proposed changes is contained in fact sheets on the Inland Revenue Department’s policy website at www.taxpolicy.ird.govt.nz

Earthquake tax relief measures announced

The Government has put in place several tax relief measures to help Christchurch residents and businesses trying to get back on their feet after last month’s earthquake, Finance Minister Bill English and Revenue Minister Peter Dunne announced today.

 “With the end of the tax year rapidly approaching, businesses and employers in Christchurch and around New Zealand need some certainty about the tax issues arising from the Canterbury earthquakes,” Mr English said. 

 “These measures will make it easier for Christchurch businesses to comply with their tax obligations, recognising the disruption caused by the earthquakes,” he said.

 The measures include:

 

• Providing an exemption so businesses do not have to pay tax or gift duty on trading stock they have donated within four months of either the September 4 or February 22 earthquakes.

 

• Making certain welfare contributions provided by employers tax free, within eight weeks of either earthquake.

 

• Extending the redundancy tax credit, which had been due to end on 31 March, to 30 September this year.

 

• Granting the Commissioner of Inland Revenue the discretion to extend statutory tax dates on a case or class-of-cases basis.

 

• Exempting certain payments made to families who receive Working for Families tax credits as a result of the earthquake from counting as income.

 Mr Dunne said that normal tax rules had not been designed for disasters of the scale of the Canterbury earthquakes.

 “Therefore the Government has recognised that they simply would not be fair for people in these extraordinary circumstances,” Mr Dunne said.

 "It is important we provide both income tax and gift duty relief to businesses donating trading stock to help alleviate the impact of the earthquake.

 “Without this exemption, businesses would be taxed on a deemed profit based on the market value of any donated goods,” he said.

 To qualify, trading stock must meet certain criteria outlined on Inland Revenue’s policy website at www.taxpolicy.ird.govt.nz.

 Mr Dunne said the move to give the Commissioner of Inland Revenue the discretion to extend statutory tax dates was consistent with the flexible approach the Government and Inland Revenue had already been taking after both Canterbury earthquakes.

 “Many businesses are dealing with lost records and disrupted systems and this is being recognised,” he said.

 Mr English said the definition of income for Working for Families was being broadened from 1 April to include cash gifts, payments of expenses and certain other payments.

 “Cabinet has agreed this should not apply to the support given to people adversely affected by the Canterbury earthquakes.”

 The Commissioner of Inland Revenue would have the discretion to exclude such payments from counting as Working for Families income for up to a year.

 Mr Dunne said he expected most of the legislation for these decisions to be enacted in early May.

 “The Government’s objective is to get earthquake-stricken residents and businesses back on their feet and today’s decision will help and reflects a need for common sense, flexibility and pragmatism,” he said.

 Announcements would be made in due course on depreciation recovery and the Government would consider other issues as they arose.

 Detailed information on the changes is contained in fact sheets on the Inland Revenue Department’s policy website at www.taxpolicy.ird.govt.nz.

Dunne welcomes Australian tax move on Christchurch quake

Minister of Revenue Peter Dunne has welcomed the announcement yesterday by the Australian Government that Australian taxpayers can now make tax deductible donations directly to the Christchurch Earthquake Appeal.

 “This is a very generous gesture from our friends in Australia.  By making donations towards the Appeal tax deductible for Australian donors it recognises and encourages in a very practical way the significant contribution that people living in Australia are making towards our earthquake recovery efforts in Christchurch,” Mr Dunne said. 

 Donations made by Australians to the Christchurch Earthquake Appeal will be tax deductible in Australia for two years from yesterday.

 Mr Dunne said the announcement from Australia was also an opportunity to personally thank everyone in Australia who had already generously donated towards helping the people of Christchurch deal with their immediate needs and the challenge of rebuilding their lives, homes and businesses.

 “The Australian Government has also provided incredible support for the people of Christchurch through its teams of specialist personnel and police, defence airlift capacity and in its financial contributions.  Yesterday’s announcement is another example of its generosity and a further demonstration of the close ties we share with Australia.”

For more information see the statement from the Australian Assistant Treasurer at http://assistant.treasurer.gov.au.  Donations may be made at www.quakeappeal.com

Dunne: Govt considers Christchurch quake tax issues

Although Inland Revenue had already put in place a number of urgent measures in response to last month’s Christchurch earthquake, the Government is looking at further measures in response to issues raised by the public, Revenue Minister Peter Dunne said today.

 “I am very pleased with Inland Revenue’s response to the position people found themselves in after the earthquake.

 ”The flexibility they have shown from immediately after the quake has helped alleviate undue stress and concern on tax matters at least during this terrible time,” Mr Dunne said.

 He explained that Inland Revenue’s response had to date been focused on the plight of business and individual taxpayers, and on its own people and how it operates in Christchurch with its premises closed.

 He said Inland Revenue’s policy team has been involved in the earthquake support package developed by the Ministry of Social Development, and in ensuring that Inland Revenue's powers to forgive interest are appropriate. 

 Mr Dunne said that the department had also been helping to facilitate and encourage donations to charities at work in helping Christchurch’s post-quake recovery.

 “The Christchurch Earthquake Appeal, launched by the Prime Minister in the days after the quake, has been granted donee and tax exempt status.  New Zealand donors to the Appeal can therefore claim a tax credit or deduction for donations, while officials are clarifying the tax treatment of donations from overseas with foreign tax administrations,” he said.

 Mr Dunne said public feedback on what is needed in the wake of the quake would potentially drive some urgent legislative changes.

 "I am working through a list of issues compiled by officials and considering possible legislative responses.”

 Areas identified for consideration to date include:

• Depreciation issues including laws clawing back depreciation from the insurance proceeds on destroyed buildings.
• A number of statutory dates that oblige taxpayers to take action, especially around 31 March.
• The tax treatment of donated goods.
• The redundancy tax credit that expires on 1 April this year.
• The tax treatment of welfare benefits provided by employers (including ex gratia payments).

Mr Dunne said that he would be working on these issues with his ministerial colleagues and expected to be in a position to announce details of decisions in a couple of weeks.

 “The tax system can provide valuable help to the people of Christchurch.

 “It is important that we do all we canto provide the greatest assistance, while maintaining the integrity of the tax system,” he said