Every employed person in New Zealand pays levies, yet they are poorly understood. ACC levies effectively call on earners to fund part of the accident compensation scheme. They are calculated according to “business industry classification” codes (BICs) and “classification units” (CUs). The idea is that higher risk industries contribute more to the scheme in levies. You choose your BIC when you register for GST or file a tax return. ACC then assigns you a “classification unit” based on your business’ activity and your level of risk. However, ACC do not always get it right.
John Miller Law can help you by looking at your levies situation and advising you on whether your levy rate is correct. Even if it is, we can look at whether there are ways you can reduce your bill. If we cannot negotiate a change in levies with ACC, we can represent you or your business in challenging the decision through the review process. Since your levy is applied to each $100 of liable earnings, small adjustments in your levy rate can have a significant effect on your overall bill. The ACC legislation has different rules for self-employed persons as well, which can result in the wrong CU being applied when the person’s levies bill is prepared.
Recent case example
A self-employed (NZ) film worker came to us recently for advice on her levies bill. She had previously worked in two roles, the first was as a coordinator looking at what material feature films could legally use. The second was also as a coordinator, but she was managing and outsourcing work for a company. ACC applied the “Creative artists, musicians, writers, and performers” CU to her first role, and the “Motion picture and video production and other motion picture and video activities (not elsewhere classified)” CU to her second. The problem with this was that a self-employed person’s levy should be based on the nature of the work they do (in her case, coordinating), not the business or context in which the work was done (film or creative arts). We advised her to seek a different CU, and she eventually secured a change to an Office Administration CU along with a reduction in her levies bill.
If you have concerns about your levies, or if you would just like an opinion, get in touch with us for an application pack.