Update from MBS Advisors
Welcome to the September edition of our monthly update as we welcome in Spring. We have some important updates and some friendly reminders for you this month.
If you have any questions related to any of the content, please do not hesitate to contact our friendly team.
Claiming Expenses for Non-Breeding Bloodstock Taxpayers that breed horses as part of their business can claim expenses for non-breeding bloodstock that may be used for racing. If as part of your breeding business you have bred a colt that is subsequently gelded for racing, you need to apply to Inland Revenue to claim further expenses for the animal.
If the taxpayer expects to use the gelding as part of the business of breeding for sale or exchange, they may apply to Inland Revenue to treat the horse as used in the course of their business. The taxpayer needs to apply to Inland Revenue under section EC 46(3) of the Income Tax Act 2007 before the horse is preparing for racing or before the horse is raced, whichever is earlier. Otherwise the cost to care for the horse and costs for preparation for racing are not deductible as part of their breeding bloodstock for sale or exchange. The horse has technically dropped out of the taxpayers business.
Preparing a horse for racing or for sale on the trial market can be difficult to ascertain when the racing preparation begins. The taxpayer may have a gelding that is prepared for the trial market for potential sale and is not intended to be raced. The fact that a horse races may be a ‘fallback’ position if the horse cannot be sold on the trial market. Therefore the timing of the race preparation cost is difficult to determine.
If you are in the business of breeding horses and you have an animal that you cannot sell and decide to race and claim the cost of caring for the horse and preparing a horse to race, you must apply to the Commissioner of Inland Revenue before the horse races. If you are racing a horse as a hobby or for recreation, these rules do not apply as the expenses are not a taxation deduction. All situations are different and a discussion should always be held to determine when a horse is starting to be prepared for racing.
Give Tony a call today to discuss your options.
ACC Invoicing Earlier this year ACC made the decision to delay all invoices by three months to reduce the immediate impact of COVID-19 on businesses. All invoices due to be sent in 2020 had a three-month grace period which resulted in CoverPlus Extra invoices being issued from July 2020 and all other invoices will be issued from October 2020 so please keep an eye out for them in your letterbox or inbox.
ACC have also made one significant change this year to their payment options, from March 2020 they have stopped accepting Cheques as a form of payment, but they do have a number of alternative options for you including the following
These different payment options are listed in detail at the end of your ACC invoice under ‘easy ways to pay’ should you require further information please don't hesitate to contact our office.
Are you still using cheques? At MBS Advisors, from July next year, we will no longer be able to accept your Cheques as a form of payment for fees. We do however have plenty of other options available, with direct debit being our preferred option.
If you would like to set up direct debit, pop into our office or contact us and we will walk you through the process.
Covid Tracing As you may be aware in August the Government made it mandatory for all businesses to display a NZCOVID Tracer App QR Code and paper register for those coming and going from a premises. This includes farms.
If you haven't yet, complete the online form by clicking the 'Create QR Code' link below to create your unique QR Code poster. You will need to fill out a seperate form if you have multiple business locations.
You'll need the following
Staff Happenings As you will be aware our resident Associate Kassie Thomas recently went on maternity leave awaiting the arrive of her and partner Phil's first child.
We would also like to welcome Kathy Reily to the ranks. Kathy comes to us with 15+ years of experience in the accounting field. Kathy will be working in Nigel's team.
Lastly, a massive congratulations to the Majestic Pukeko's - Morrinsville Rugby and Sports U85kg Rugby Team who took out the Waikato Competition over the weekend, Co-Captained by MBS Client Account Manager Michael Hollier. Congratulations on a stellar season.
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