New GST return in Xero

On 11 November Xero plan to release updated an GST Return. The new return is a big improvement over the already pretty good GST return that is there now.

Key improvements are:

  • It will warn you if you have unreconciled transactions
  • It tells you when the return needs to be filed with IRD (and if it is overdue how many days overdue it is – but it doesn’t file your return at IRD or pay your GST for you, that’s your job).
  • It is easy to see what the adjustments Xero puts in are (and they have been renamed to Late Claims)
  • You have the option to exclude adjustments from the return (use with caution)
  • You don’t have a big orange file now button – now you save as draft and then finalise when ready
  • It is prettier!

 

RBNZ consults on measurement of housing lending

The Reserve Bank recently released a second housing capital consultation paper that reviews how housing loans should be measured. It sounds like a harmless technical tweak of the legislation but it isn’t. Buried in the document at paragraphs 56 and 57 is:

“Residential mortgage loan” means a loan fully or partially secured by a first ranking 
mortgage over a residential property used primarily for residential purposes either by
the mortgagor or a tenant of the mortgagor.

If the security is used in part or in full for farming or business activities, and the
borrower is reliant in part or in full on income generated by farming or business
activities to service principal or interest repayments then the loan cannot be classified
as a residential mortgage loan.

If bank has recourse to more than four dwellings owned by the borrower then the
loan cannot be classified as a residential mortgage loan.

Link to the full article.

If you are a small business owner and need a loan for your business, currently you can get a residential loan at a rate of around 6% secured against your house. Under the proposed rules that won’t happen. Chances are the bank will still lend to you but as a business loan or overdraft, and they will still insist on using your house for security. As an added bonus they will charge you interest at business rates which start at 10%. So great news for the banks but not your business.

Property investors – only four properties per bank please.

All this from a government that I thought was trying to help small businesses.