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Provisional tax and recent changes

The intent of the provisional tax system is to gain tax payments whilst income is being earned.  These are effectively payments on account during the current tax year which are subject to a wash-up calculation (resulting in refund or further terminal tax liability) once the final income tax return is compiled and filed.   Provisional tax payments are made in instalments, the number and frequency of which will depend on…  Read more

Tax penalties and interest relief

It is quite understandable that tax affairs have taken a backseat at the moment and some taxpayers have struggled and failed to file their 2019 income tax returns on time.  Given the other stresses on our lives, such as childcare, we too have found it difficult to prioritise some work. The end result is that some tax returns will be filed late. We have anticipated this and have requested a…  Read more

Help and funding available

Small businesses may qualify for vouchers to help pay for services such as training workshops, courses and coaching that build the management capabilities of their owners, operators and key managers. Management Capability Development Vouchers are only available through the Regional Partner Network (RBP) Growth Advisors.  Our local Growth Advisors are Venture Taranaki and their contact information can be found toward the foot of this web page. More CA offers services…  Read more

Covid 19 response – business cashflow and tax measures

The NZ Government has acted swiftly to support businesses with some measures and tax changes aimed at helping business hold onto some tax money to meet ongoing business expenses and also encourage further spending to keep the economy moving.  They have done so by:- Remission of interest Allowing Inland Revenue to remit use-of-money interest (UOMI) for customers significantly affected by Covid 19.  This will primarily assist taxpayers with payments due…  Read more

Wage Subsidy – is it taxable and how do I account for it?

Employers and the self-employed appear to be getting to grips with the eligibility criteria to be met and how to go about claiming.  If you need a reminder then visit the Work and Income website and review the details and definitions there. We are receiving more and more questions about whether these amounts are taxable and how should they be accounted for in Xero? It is important to note that…  Read more

Useful information and resources on COVID-19

Over the course of a few weeks nearly everyone’s business and life has been turned upside down. It’s been a crazy time with toilet paper shortages, businesses forced to close, an overload of information (and mis-information on social media). With the recent disruption in mind, we wanted to help support you however we can. We’ve seen a number of our clients already impacted by the virus and decided to put…  Read more

Invoicing for small business

Xero is still the king if you need invoicing functionality (sending, reminding, statements etc) and also where you may be large or complex enough so need to report on who owes what at any particular time.  If that sounds like your business then you are likely saving sufficient time and stress to make the monthly Xero subscription for a Business Edition worth the investment.   However, where your invoicing is…  Read more

Payroll Stress Relief

Let’s face it, payroll is a specialist area of business which needs support, time and effort to be done right.  Small business owners routinely have little of all of those. So why not remove the issues altogether and outsource your payroll? We are an advocate for outsourcing payroll and below we shall look at some alternatives to doing this yourself in Xero. Let’s start with Xero. Payroll is an add-on…  Read more

Avoid the scams, use the Xero billing network

Whilst on holiday recently I read the sad story of the owners of the Ruru childcare centre who were the victims of an invoicing scam.  Reviewing the circumstances that allowed the fraudsters to commit this crime I realised that it really could happen to any of us.  After all, the perpetrator had simply accessed an email account, intercepted an invoice, doctored the payment details and resent it.    Email account hacking happens all the time.  I’m…  Read more

Different Business Structures

So you have a great idea for a business – awesome! But then the questions start… what’s the difference between a sole trader and limited company? What are the pros and cons of each? Suddenly this can become very daunting – but it doesn’t need to be. This blog will give you a basic rundown of the different business structures commonly seen and help you decide which option is best.…  Read more

Entertainment Expenditure — Provision of Coffee for Employees

We often see instances of business owners purchasing food and drink and wishing to claim a deduction through the business.  Whilst the general permission will give some guidance there is a further regime that can apply to limit the claim you make – the entertainment regime.  The following question and answer from CCH illustrates the rules in terms of coffee being purchased for staff.   Question A company is considering three options for…  Read more

Core Values: Compassion

Core Values – something we all have, and something that we view as important. They are unique to each individual and we often surround ourselves with those who have similar values. We look for these values in our friends and those closest to us, so wouldn’t it be important to have them in our business as well? Defining a set of Core Values allows those involved with your business (whether…  Read more

AIM-ing to please

IRD are promoting AIM (Accounting Income Method) pretty hard as they envisage great benefits in adopting this method of paying provisional tax.   We agree mostly and see some significant advantages, including:- · Promoting best practice by ensuring regular reporting and assessment · Increasing contact with key advisors (in this case us) · Promoting financial awareness by introducing accounting adjustments and ensuring you understand and acknowledge these · Better aligning…  Read more

Provisional Tax Options 2018

Provisional tax is effectively a progress payment to ensure that tax is being paid by most taxpayers as they earn their income throughout the year. It is paid in instalments, the number of which can depend on your GST filing cycle. You become a provisional taxpayer when your Residual Income Tax (RIT = end-of-year income tax less any tax paid at source) is greater than $2,500.   There are 4…  Read more

Business Planning – Why Bother?

Often we find people have an idea of what they want to do and where they want to head, but don’t actually have a plan. By not having a roadmap of where they want to head they are risking getting lost along the way, or even worse not ending up at the destination at all.   Business Plans are an asset to your business as they allow you to look at…  Read more

How do I claim vehicle expenses when I have a company?

Claiming vehicle expenses in companies is increasingly becoming an area of interest for Inland Revenue and businesses are often exposing themselves inadvertently to investigation and penalties through simply not being aware of the issues.  So, below is some basic explanation and help. Currently companies can claim expenses in two ways depending on the ownership of the vehicle. • Privately owned vehicle – mileage rate, currently the Inland Revenue rate of 72…  Read more

Christmas gifts and parties for employees

It’s normally in the run up to Christmas that we begin to consider gifts or a party to reward our employees for their services over the last year. Done right, the goodwill generated can be significant with staff feeling valued and part of something great. Which all leads to a better business with hard working and loyal staff. But, before we settle on how to reward our people let’s consider…  Read more

Are client gifts of food and drink tax deductible?

For a long time many have considered that gifts of food and drink given to clients, say at Christmas, have been fully deductible for tax. Certainly, for a good while Inland Revenue thought so too. However, Inland Revenue has recently changed their minds and have affirmed the fact that they see these food and drink gifts being subject to the entertainment rules. These rules operate to allow only 50% of…  Read more

What expenses can I claim?

Probably the most frequently asked question by those starting in business and those already trading is “what can I claim as business expenses?” Simply put Inland Revenue offer a simplistic overview of what can be claimed as expenses in this video but, in my opinion, this doesn’t quite go far enough. In response to simplistic advice we often hear people saying things like:- • Bob puts through his wife’s petrol…  Read more

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