R&D: Get cash back from your tax losses
If you do research and development (R&D) work, claiming a special tax credit of up to $224,000 this year could ease cash flow problems and hasten your product to market. Here’s how to get the money — plus find out about New Zealand innovators who have used it to get ahead.What is it?The R&D loss tax credit is designed to help New Zealand’s most innovative businesses when they may be struggling with cash flow — before they’ve taken products to market.Eligible businesses can “cash out” — claim and be refunded — up to $224,000 of their R&D losses in a given tax year.Last year, the credit gave hundreds of businesses early access to their tax losses, improving their cash flow and allowing them to reinvest in their businesses.The good news is you can claim the credit every year, as long as your business operates at a tax loss. You can find out if you’re eligible and apply for the credit on the Inland Revenue website.To read full original article please select here: www.business.govt.nz
Time to reflect and reset your business goals
It’s time to be bold, it’s time to be brave and it’s time to be savvy when it comes to your new financial year business goals.One of the key things you can do to succeed in the new financial year is to be organised from the outset, and make plans on how you want your year to run.You are in control of your destiny for the next 365 days!Just take some time to reflect on how your year has gone. Grab a piece of paper and start jotting down the following:What’s gone well?What’s hasn’t gone well?What are you grateful for?What have your learnt?What fabulous things in your business and your regular life are you going to take into the new financial year?What lousy things in your business and your regular life are you going to leave behindWhat are your goals and budgets?How are you going to track your goals and budgets monthly?To read full original article, please select here: www.myob.com
How much should you pay yourself?
You started your own business to do something you love and make money. But how much should you pay yourself? Too little and you may struggle to survive. Too much and your business might be at risk. So how do you strike the right balance?Take the guesswork out of your salaryFor many, the chance to set your own salary sounds like a dream come true. But small business owners know the reality is a little more complicated.You should only pay yourself out of your profits – not your revenue. When you see money coming into your business, don’t assume you can pay yourself a big slice of that. Before you take your cut, you also need to take account of things like taxes, payroll, fixed costs and overheads. will really help you work out how much you can afford to pay yourself. It will let you keep track of all expenses and calculate profit rather than revenue or turnover. It will also help identify areas you can make tax deductions.Setting your own salary will depend on your location, your industry, your profits, and how much you want to earn. But there are a few things to think about that can help you land on a reasonable figure.To read original full article, please select here: www.xero.com
What is the research and development loss tax credit?
The research and development (R&D) loss tax credit allows business losses from eligible expenditure associated with R&D to be cashed out instead of being carried forward. Generally, tax losses are carried forward to the next income year.Losses that are cashed out are no longer available to apply against income in future years.For income years beginning on or after 1 April 2015, you may be able to "cash out" (have refunded) up to 28% of any tax losses associated with eligible R&D activity if your company is resident in New Zealand.Read more information about the R&D loss tax credits in our pages 19 to 29.You can repay the R&D loss tax credit by paying:- future income tax (ie,by trading into profit), and/or- R&D repayment tax following a loss recovery event (LRE). New imputation credits for income tax paid by a company won't be available to a company that has cashed out R&D losses until that company has repaid the cashed out amounts.To read full original article, please select here: www.ird.govt.nz
Tax incentives for R&D could shape up to be an election issue Title
Tax incentives have a "positive and significant" impact on research and development spending, according to an International Monetary Fund working paper published this week, but remain contentious in New Zealand with the ruling National party dubbing them an "unknown financial liability" while the opposition Labour Party is still committed to implementing them.While R&D spending is inching higher, New Zealand still lags behind its peers with recent data showing total R&D investment as a proportion of gross domestic product increased to 1.3 per cent in 2016 from 1.2 per cent in 2014. The OECD average is 2.4 per cent. Business investment in R&D was 0.6 per cent of GDP in 2016, still well off the government's aim to lift it to 1 per cent.The IMF paper notes many governments use tax incentives to stimulate private expenditure on research and development, including the majority of OECD countries and other large economies such as China, India, Brazil and Russia. In a recent mission to New Zealand, IMF officials recommended the government lift its support, describing those incentives as "a bit on the timid side".Both National and Labour see innovation as critical to lifting the country's productivity levels, a challenge given its relatively small economy and distance from other markets. National, however, has argued New Zealand's research and development grant system administered through Callaghan Innovation stops companies "gaming the system" by reclassifying spending to qualify for tax credits.To read full original article, please see here: NZ herald