Proposed Changes to Schedular Payments
There may be changes coming in relation to schedular payments. The Taxation Bill is expected to be passed in March 2017 and if enacted, this will change obligations for contractors from 1st April 2017 onwards.
Instead of the existing tax code declaration (IR330) form, contractors will need to complete a new tax rate notification form. This is applicable only if they want to change their tax rate or if they are being paid by someone new.
Contractors will be allowed to choose a tax rate which best fits their tax liability. This, however, is subject to certain limitations. Please note that variable tax rates will not apply to non-resident entertainers and sports people visiting New Zealand.
Labour hire businesses such as recruitment and on-hire companies will also be affected. If you are a labour-hire business, you will need to deduct tax when you pay contractors and include these details in your employment monthly schedule.
Please get in touch with us if you would like further advice.