Under the PAYE rules, a retrospective increase in salary or wages is treated as an extra pay. This is subject to a de minimis provision, so only applies where the total salary or wages a person earns in a week (including the increase) is more than $4. If a person earned less than $4 for the week, the payment would be treated as salary or wages. This restriction has been part of the PAYE rules since PAYE was introduced in 1958, with the only change to the provision being when it changed to $4 from its original £2 upon the change to decimal currency in 1967. Given that the current adult minimum wage is $15.25 an hour and the current and training minimum wage is $12.20 an hour, it is extremely unlikely anyone earning salary or wages in New Zealand would receive less than $4 in a week. Therefore, the existing restriction is effectively redundant. GST (Clauses 187(18), 227, 231, 232, 269(3), (7) and 275(1)) Summary of proposed amendments The Bill proposes an electronic filing requirement for some GST-registered persons over a taxable supplies threshold. The threshold will be set by Order in Council following appropriate consultation. A limited exemption will be provided in some circumstances. A penalty will apply to registered persons required to file their GST return electronically but who fail to do so. Application date The proposed amendments will apply from the date of enactment. However, it will only affect registered persons once a threshold for the electronic filing requirement is set by Order in Council at a later point in time. Key features Proposed section 36BD will provide for the setting of a threshold above which persons are required to file their GST return with Inland Revenue electronically in a prescribed format. The threshold will be set separately by Order in Council. Subsection (1)(a) of section 36BD preserves the option for GST-registered persons below the threshold to voluntarily file electronically. As currently, registered persons who choose to transmit their return electronically must do so in a format prescribed by Inland Revenue.
Under the PAYE rules, a retrospective increase in salary or wages is treated as an extra pay. This is subject to a de minimis provision, so only applies where the total salary or wages a person earns in a week (including the increase) is more than $4. If a person earned less than $4 for the week, the payment would be treated as salary or wages. This restriction has been part of the PAYE rules since PAYE was introduced in 1958, with the only change to the provision being when it changed to $4 from its original £2 upon the change to decimal currency in 1967. Given that the current adult minimum wage is $15.25 an hour and the current and training minimum wage is $12.20 an hour, it is extremely unlikely anyone earning salary or wages in New Zealand would receive less than $4 in a week. Therefore, the existing restriction is effectively redundant. GST (Clauses 187(18), 227, 231, 232, 269(3), (7) and 275(1)) Summary of proposed amendments The Bill proposes an electronic filing requirement for some GST-registered persons over a taxable supplies threshold. The threshold will be set by Order in Council following appropriate consultation. A limited exemption will be provided in some circumstances. A penalty will apply to registered persons required to file their GST return electronically but who fail to do so. Application date The proposed amendments will apply from the date of enactment. However, it will only affect registered persons once a threshold for the electronic filing requirement is set by Order in Council at a later point in time. Key features Proposed section 36BD will provide for the setting of a threshold above which persons are required to file their GST return with Inland Revenue electronically in a prescribed format. The threshold will be set separately by Order in Council. Subsection (1)(a) of section 36BD preserves the option for GST-registered persons below the threshold to voluntarily file electronically. As currently, registered persons who choose to transmit their return electronically must do so in a format prescribed by Inland Revenue.
2017-commentary-areiirm-bill.docx