Business and Tax Updates March 2026: IBBZ Accounting

Summary:

As we reach the end of March 2026, the focus is firmly on the 31 March financial year-end. This is a critical time for businesses and individuals to finalise their financial position, ensure all compliance obligations are met, and prepare for income tax return filing.

With the balance date now here, it is important to complete final reconciliations, review year-to-date performance, and ensure that key areas such as provisional tax, GST, payroll, and cashflow are accurately recorded. Timely action at this stage helps avoid last-minute issues, penalties, and unnecessary stress.

As Inland Revenue increases its focus on overdue returns and outstanding tax positions, ensuring that filings and payments are up to date is essential. Key upcoming deadlines, including terminal tax (7 April) and provisional tax (7 May), should also be considered as part of your cashflow planning.

We also encourage you to visit our YouTube channel, Tax Accountant, where we share ongoing tax updates, compliance tips, and insights to help you manage your personal and business finances with confidence.

At IBBZ Accounting, we are committed to helping you stay compliant and plan with confidence. Our team is always here to support you throughout the financial year.

Thank you for your continued trust in our services. 

Key Business Updates

1. Official Cash Rate Update — Upcoming Review

The Reserve Bank of New Zealand last updated the Official Cash Rate (OCR) in February 2026, with no changes since. The next OCR review is scheduled for 8 April 2026, which will be an important update for businesses and households. This review will provide further direction on interest rates, particularly as inflation shows signs of easing and economic activity remains soft. Any change in the OCR may impact borrowing costs, cashflow, and overall business confidence. As we approach key tax payment dates, it is important to consider how potential interest rate movements may affect your financing and cashflow planning.

Important Tax Updates

1. Terminal Tax – Due 7 April 2026

Terminal tax for the 2025 income year is due on 7 April 2026. It is important to ensure payments are made on time to avoid penalties and interest. With the financial year-end just passed, we recommend reviewing your cashflow and making necessary arrangements to meet this obligation promptly.

2. Provisional Tax Reminder – Final instalment due 07 May 2026

As we move past the 31 March year-end, businesses should now turn their attention to the third instalment (P3) of provisional tax, due on 7 May 2026.

This is the final provisional payment for the 2026 financial year, and it plays a key role in ensuring your tax position is aligned before year-end assessments are finalised.

3. Rental Property Interest Deduction – Fully Restored 

Residential rental property interest deductibility has been fully restored to 100% this applies to the year ended 31 March 2026 and onwards, property investors can claim the full interest expense.

Property owners should ensure the correct treatment is applied in their 2026 accounts and continue to consider other rules, including the bright-line test and general deductibility principles.

4. KiwiSaver Contribution Changes – From 1 April 2026

From 1 April 2026, the default KiwiSaver contribution rate will increase from 3% to 3.5% for both employees and employers. This applies automatically to all paydays on or after this date.

Employees who wish to remain at the 3% rate can apply to Inland Revenue for a temporary rate reduction, typically for a period of 3 to 12 months.

Employers should ensure payroll systems are updated to reflect the new rate, while employees should be aware of the impact on take-home pay and overall savings.

5. Minimum Wage Increase – From 1 April 2026

From 1 April 2026:

• Adult minimum wage increases from $23.50 to $23.95 per hour.

• Starting-out and training minimum wage increases from $18.80 to $19.16 per hour.
  

Employers should ensure payroll systems are updated and employment agreements remain compliant.

6. Inland Revenue Compliance Focus

Inland Revenue is increasing its focus on compliance, particularly around overdue returns, tax debt, and employer obligations such as PAYE and GST. Businesses with outstanding filings or payments are more likely to receive follow-ups and potential enforcement action.

Ensuring returns are filed on time and taxes are paid promptly is key to avoiding penalties and maintaining a good compliance position.