Tax relief won for New Zealand’s remotest farmers

Media Release

14 July 2009

Tax relief won for New Zealand’s remotest farmers

Federated Farmers has secured much needed tax relief and income assistance for some of the remotest farmers on the planet - farmers of the Chatham Islands.

“This is unique tax assistance for the farmers of the Chatham Islands who literally glue the Chatham Islands community together,” says Philip York, Federated Farmers Commerce and Economics spokesperson.

“While the Chatham Islands are well known for its fisheries, rugged beauty and conservation importance, agriculture is a mainstay of the Islands economy. It’s important and vital to each of its 600 plus residents.

“Yet Chatham Islands farmers have to overcome obstacles few on the ‘mainland’ can comprehend. Without a reliable shipping service, the biggest obstacle faced by farmers is getting goods to market. This compounds the drought the Chatham Islands has suffered from as well.

“While the challenges are many, Chatham Islands farms are still businesses and subject to the same tax laws every farmer operates under. That’s why Federated Farmers stepped up to provide policy and practical support for the Federation’s most remote members.

“Inland Revenue needs to be congratulated for showing genuine compassion and understanding for the needs of farmers on the Chatham Islands.

“The package agreed between Federated Farmers and Inland Revenue will allow for late deposits into the Income Equalisation Scheme up to 30 April 2010 for the 2009 income year. This applies regardless of when the return is filed or what the due date is for filing the tax return.

“The package also allows for an early refund from income equalisation deposits for farmers affected by the lack of shipping services and drought.

“The package Federated Farmers has worked with Inland Revenue on will greatly assist the viability of farming.

“The Chatham Islands are important economically to New Zealand and every New Zealander. That’s why the Federation is actively engaging with the Government in seeking a sustainable resolution to the Island’s farming and economic needs going forward,” Mr York concluded.

Tax Relief – Chatham Islands Farmers – Inland Revenue Fact Sheet

July 2009

We understand that tax isn’t the first thing on your mind. But please contact us with any concerns or questions about tax or income levels so we can make arrangements to help

Working together
Inland Revenue is making tax relief and income assistance available to Chatham Islands farmers affected by the unavailability of suitable shipping services to move production from the Chatham Islands or by drought. We have a range of measures to help, depending on personal circumstances. Our emergency helpline - 0800 473 566 - is available for farmers to discuss any of the tax measures.

Income equalisation scheme
Farmers who have money deposited in this scheme may be able to make an early withdrawal or deposit funds from forced sale of livestock.

Outstanding tax
We’ll consider installments for outstanding tax in some circumstances. You can apply for a write-off due to serious hardship when you know you won’t be able to pay the full amount.

Note: If we grant relief from payment due to hardship and you have losses to carry forward, these losses will be reduced in proportion to the amount written off.

Late filing and late payment
Extensions for some income tax returns may be available. Extensions can’t be granted for GST and PAYE returns, but any penalties for late filing may be waived. Penalties for late payments caused by effects of the weather may also be waived.

Special tax codes
You may be entitled to a special tax code if you’re receiving a salary or wage and have a loss to carry forward. A certificate will be issued to you with a reduced tax rate.

Working for families tax credits
Working for families tax credits entitlements are based on a person’s yearly family income. If your family income changes, your entitlement will change.
If your yearly family income decreases you may be entitled to increased payments. You may be able to change the frequency/date of your payments.

Paid parental leave
Eligibility: You’ll need to have worked an average of 10 hours per week over six or 12 months before the birth of the child.

Entitlement: Visit our website - www.ird.govt.nz - for the current entitlement rates.

Child support
If you have trouble making child support payments by due dates you should call 0800 221 221. It may be appropriate to re-estimate your income and reduce the assessment.

Other tax measures that could help
These include:

deductions can be made for farm losses when certain improvements are destroyed or irreparably damaged

livestock or materials donated may be treated as zero-value rated

payments or donations from charities aren’t taxable or liable for GST

tax treatment of insurance payments depends on what the payment is compensating, eg insurance for loss of capital assets is non-taxable, but income-replacement insurance may be taxed

interest on money borrowed to keep the farm going may be deductible

eligibility for Independent Earner Tax Credit.

ENDS

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