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Xero prices and plans

July 1st, 2018 | Posted by Accountants Auckland in Accountant in Auckland - (Comments Off on Xero prices and plans)

Bad news folks!  I guess Xero needs to pay for that flashy new building because we’ve just received word that both standard and premium plans will increase in price by $5 per month, from 28 September 2018.  Standard subscriptions will go up to $60 a month, while premium pricing increases to $75 a month (excluding GST). This pricing includes one active Xero Expenses user with subscribers paying an additional $5 per additional active user. To help keep your price down, we’d discourage you from using Expense claims.

 

 

 

Remember, many of you are still eligible for our 30% discount on Business Edition plans.  This requires us to act as the subscriber with you maintaining your own billing account, only available if payment is on direct debit or credit card, and is subject to a positive credit history with us.  Alternatively, rather than having the Partner act as Subscriber to the subscription, you may act as the Subscriber for Xero Business Edition subscriptions and invite the Partner into that subscription as an invited user (although our discount will not be available to you in this scenario).  The Subscriber to the subscription has the ability to control access rights and may be required to retain ownership of the file for insurance purposes.

 

“If you liked it, then you should’ve put a ring on it”.  Well, it seems, here in New Zealand, the government doesn’t like it and are about to stop it by putting a ring on it.  What am I alluding to?  I’m talking about the proposed tax changes which, if they go ahead, will mean you’ll no longer be able to use losses from your rental property against your other income such as salaries and wages.

Ring-fencing is simply the technical term, used by chartered accountants and tax-boffins to describe this approach.  In practical terms, for many people, it may be the end of receiving tax refunds from some of the tax paid on their wages.  Anyone who’s been using these tax refunds to help fund rental property cash-deficits may get a little ‘Antsy’ about all of this but it’s unlikely to be anywhere near the doomsday the media is making it out to be and here’s why:

  • Some would say the main hit has already been taken because the proposal isn’t entirely dissimilar to the changes which were made to depreciation not so long ago.  Prior to that, the depreciation claimed on buildings boosted many a tax refund and when the claim was no longer available, there was a significant downsizing of tax refunds for rental property owners.
  • Ring-fencing doesn’t mean your losses suddenly go ‘poof’ and disappear, never to be seen again.  Generally, the losses will simply accumulate until you’re ready to use them when the rental property becomes cash-positive and profitable.  Often, standard tests are required to maintain losses but thankfully losses don’t come with an expiry date.  It’s simply a matter of timing.

Finally, don’t forget the big picture.  From a commercial perspective, the tax position of capital gains remains unchanged.  Ring-fencing is unlikely to have any negative bearing on the capital gains made from selling the rental property.  Typically capital gains have been the primary factor in property investment and in many cases, these will still significantly outway any changes brought about by the proposed ring-fencing reforms.

 

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