Business and Tax Updates November 2025: IBBZ Accounting

Summary:

With the year quickly drawing to a close, this is an ideal time to take stock of your financial position and ensure your tax and compliance obligations are well in hand. November often brings a busy mix of GST deadlines, provisional tax planning, and year-end preparation, making it important to stay organised and ahead of any upcoming commitments. 

As we approach the final stretch of 2025, reviewing your cash flow, payroll, and year-to-date financials can help address any gaps early and avoid last-minute pressure. A brief mid-year check-in now can significantly strengthen your business readiness for the new year.

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. OCR Cut to 2.25%: What This Means for Businesses

The Reserve Bank of New Zealand has reduced the Official Cash Rate (OCR) by 25 basis points, bringing it down from 2.50% to 2.25%. This decision reflects ongoing efforts to support economic activity amid softening inflation and slower-than-expected growth.

What This Means for Businesses

• Lower borrowing costs on loans and overdrafts, improving cash flow.

• Reduced returns on savings, prompting a review of how surplus funds are managed.

• Opportunity to reassess budgets, refinancing options, and investment plans while rates remain favourable.

Outlook

• Forecasts indicate the OCR may remain around 2.25% through early 2026, with the possibility of a further small reduction if economic conditions weaken.

• Further cuts will depend on economic data, while stronger inflation or growth may result in the rate stabilising sooner.

2. KiwiSaver Update: National’s Proposed Changes

The National Party has announced a proposal to gradually increase KiwiSaver contribution rates over the coming years. Under this plan, both employee and employer contribution rates would rise from the current 3% each to 6% each by 2032.

What This Means

• Contribution rates would increase slowly from 2026 onwards.

• Employees will see higher KiwiSaver deductions from their pay over time.

• Employers will need to plan for higher contribution costs as rates increase.

• The goal is to help New Zealanders build stronger retirement savings.

What You Should Do

• Check your current KiwiSaver settings.

• Employers should begin planning for the future cost of increased contributions.

• Employees may want to consider how the gradual increases will affect take-home pay.

Important Tax Updates

1. TDS 25/23: How Inland Revenue Views Cryptoasset Sales and Staking Rewards

Inland Revenue has released a significant adjudication (TDS 25/23) clarifying the tax treatment of cryptoasset disposals and staking rewards. This decision provides important guidance for investors, traders, and anyone earning income through blockchain-based activities.

Background of the Case

A couple invested jointly in a developing crypto project (“Crypto Y”), expecting future staking returns of 5–10%. Over several years they:

• Bought Crypto Y at early development stages

• Sold part of their holdings when prices spiked

• Reinvested proceeds into shares, bonds, and more Crypto Y

• Began staking once available and received regular rewards

• Later sold further crypto holdings for substantial profit

Although they initially declared all crypto disposals and staking income, they later attempted to reverse these amounts. Inland Revenue rejected the change, and the dispute progressed to adjudication.

What Inland Revenue Considered

The Tax Counsel Office assessed three core questions:

1. Were the cryptoassets acquired for the purpose of disposal? (s CB 4)

2. Did the taxpayers carry out a profit-making undertaking or scheme? (s CB 3)

3. Are staking rewards taxable as income under ordinary concepts? (s CA 1(2))

Key Findings

The adjudication found that all three taxing provisions applied:

1. Acquisition for Purpose of Disposal (s CB 4)

The taxpayers could not prove that their dominant purpose was long-term investment. Their pattern of buying dips, selling peaks, and reinvesting for similar returns pointed to a clear intention to dispose for profit.

2. Profit-Making Scheme (s CB 3)

Their activities showed a structured plan: acquiring, accumulating, staking, and selling Crypto Y to generate ongoing gains. This went beyond passive investment and had the characteristics of a businesslike profit-making scheme.

3. Staking Rewards as Income (s CA 1(2))

Staking rewards were received regularly, were convertible to money, and represented a return on the cryptoassets. They also reflected active participation in the network. Therefore, they were income under ordinary concepts.

Why This Matters

This adjudication reinforces Inland Revenue’s increasingly firm stance on crypto taxation:

• Frequent buying and selling can signal a profit motive, even when investors claim long-term intentions.

• Staking rewards are taxable income, similar to interest or dividends.

• Record-keeping and clear documentation of investment purpose are critical for crypto investors.

Taxpayers should expect Inland Revenue to closely scrutinise patterns of behaviour, not just stated intentions.

2. Update from IRD: Small Business Cashflow (SBC) Loan Scheme

Inland Revenue has issued an update for businesses with a Small Business Cashflow (SBC) Loan. Loans issued with a five-year term are now approaching their expiry dates, with many ending before 30 June 2026.

What You Need to Know

• IRD will send reminder letters directly to borrowers via myIR at the end of November 2025 and February 2026.

• Tax agents will not receive these emails, although we can view the letters through your myIR account if access is provided.

• When the loan term ends, any remaining balance, including interest will automatically become overdue debt.

Why This Matters

Businesses should review their SBC loan status to ensure they are prepared for the final repayment. Defaulting may result in the loan being treated as outstanding debt with IRD, which could lead to further interest or collection action.