Tax Working Group publishes interim report

On 20 September 2018, the Tax Working Group (the Group) updated the public on its progress and thinking with the publication of its interim report, “Future of Tax”. In a press release, the Chair, Sir Michael Cullen, said that the Group had conducted a wide-ranging...

Handling your growing pains

Expanding your business can be exciting, but if you grow too fast – and without adequate planning – you could face major problems. Besides the uncertainty of how long the growth period will last, it’s common to lose focus of some of the factors that play a key role in...

Grow with the (cash) flow

Steady cash flow is the fuel that powers your business, but when you’re busy doing a million things at once it can easily slip to the bottom of the priority pile. Here are some tips to keep the cash flowing while you’re growing: Invoice quickly – good debtor...
Complying with the AML/CFT legislation

Complying with the AML/CFT legislation

If you have recently tried to start a new investment or open a bank account, you would have been required to prove your identity, location of residence, and proof of your source of funds. These requirements are all part of the Anti-Money Laundering and Countering...

Business health check

Visualise, plan and prepare for growth When you consider every large corporation started out as a small business, the idea of growth is exciting! To avoid growing pains, however, the first step is to create a focused vision for your business. Here’s how: Define your...
To claim or not to claim?

To claim or not to claim?

Planning a summer business trip with a personal holiday tacked on the end? Renting out the bach and unsure what expenses can be claimed? Whatever your situation, we want to make sure you’re getting the expense claim tax break you’re entitled to. Here’s the lowdown on...
The trust issue

The trust issue

Do you have a family trust? Thinking of forming one as a way to future-proof your assets for you and your children? Take note – the Trustee Act is getting a makeover. While there are still a few parliamentary hurdles to jump, now’s the time to get your head...
How will the Act change my role as a trustee?

How will the Act change my role as a trustee?

Up until now, a trustee’s job description has been clear as mud with many families getting into strife unaware of their trustee’s responsibilities. If the new bill comes into place, a trustee’s role will be clearly outlined, and include: Knowing the terms of the trust...
What changes will affect my business?

What changes will affect my business?

#1 Extending perpetuity laws At the moment, when you set up a family trust, it has a time limit of 80 years. Then you have to wrap it up and distribute the assets. The new legislation suggests extending it to 125 years, which may involve significant succession...
Is a family trust right for me?

Is a family trust right for me?

Family trusts are a popular way to protect and manage your assets, such as the family home, for you and your family, now and in the future. They can have a valuable role to play, but they’re not suitable for everyone. Here are the pros and cons of family trusts to...

I have a family trust, what do I need to do?

Get your paperwork in order: Document your trust actions carefully (if you don’t already) and make sure they’re accurate. Revisit your succession planning: Talk to us to make sure your succession plans still make sense if this legislation goes through. Review your...
The fringe issue

The fringe issue

Given the importance of keeping your PAYE and GST record-keeping and payments in order, it might be tempting to think that Fringe Benefit Tax, or FBT, is a relatively minor thing. But don’t be fooled. In 2017, Inland Revenue created a dedicated audit team to focus on...
Thinking of exporting? Don’t just think – act!

Thinking of exporting? Don’t just think – act!

New Zealand’s is an export-led economy, driven by a handful of major industries like dairy and wine. But more and more smaller players are also conquering offshore markets with smart, innovative products and services in every sphere. If you’ve ever contemplated trying...
Changes to Families Package

Changes to Families Package

If you receive the Families Package (formerly the Family Incomes Package), you may be affected by three changes coming on 1 July 2018. They include: a Winter Energy Payment to help older people and low income families heat their homes a Best Start tax credit for...
ACC announces changes to CoverPlus Extra

ACC announces changes to CoverPlus Extra

If you’re applying for an ACC CoverPlus Extra policy, it’s worth noting that the policy no longer starts on the date of the application, but when you sign the offer letter. So if you have such a letter in your in-tray waiting to be signed, now’s the time to get onto...
Budget 2018

Budget 2018

“We are committed to living within our means and having a buffer to deal with the risks and shocks that a small country like New Zealand inevitably faces.” Hon Grant Robertson, Finance – Minister There weren’t too many surprises with the 2018 Budget. It marks a...
Health

Health

Health spending is the headliner of the 2018 budget, with an extra $750 million allocated to capital spending and an additional $3.2 billion to operational funding over the next 4 years. The Minister described this as “bread and butter funding”. The new capital is...

Tax

“Our tax system will be fairer and more balanced to encourage investment in the productive economy.” Grant Robertson The budget position on tax is something of a watching brief. The Tax Working Group (TWG) was a tangible presence while the Budget was read but their...
Compliance agenda

Compliance agenda

There is a drive to widen the tax base. With that in mind, the Government will provide extra operating funds to Inland Revenue to collect more taxes and, in particular, to ensure outstanding company tax returns are filed. At a proposed cost of $31.3 million this is...
Supporting innovation – R&D

Supporting innovation – R&D

The Budget allocates $1 billion over four years to finance tax incentives for more research and development (R&D) by Kiwi businesses. R & D has had something of a Stop Go course over the last decade with a range of measures deployed. These have included...
Provincial Growth Fund

Provincial Growth Fund

Announced in February, the Provincial Growth Fund (PGF) has been allocated $1 billion across both operating and capital expenditure. This includes funding across the One Billion Trees programme and investment-ready initiatives. It is early days yet to predict outcomes...
Education

Education

While the Government points out the Budget provision for $1.6 billion in new operating funding over four years is a 45% increase on last year’s Budget, most seem to agree that it still won’t go far enough. $395.8 million in new capital funding for better schools and...
Housing

Housing

December’s mini-Budget allocated $2.1 billion for KiwiBuild to deliver 100,000 affordable houses across the country, including 50,000 in Auckland over the next 10 years. Budget 2018 commits more than $1 billion in new funding towards housing, including $369 million in...
Service with a smile

Service with a smile

Want to win new customers? Ok great. But whatever you do, don’t ignore the ones you already have. Studies show that the longer your customers stay, the more they’ll spend with you*. Happy customers = loyal customers = boosted bottom line. *Depending on the type of...
Feel the love

Feel the love

How raving fans can rock your business You may have heard the term ‘raving fans’. It’s a passionate subset, usually about 10-15% of your customer base, who are so in love with your business that they shout it out from the rooftops. They keep coming back, not because...
Cleaning out the dirty money

Cleaning out the dirty money

New legislation puts laundering in the spotlight While New Zealand is hardly the money laundering capital of the world, we still see our share of shady activity. Every year, around $1.35 billion of fraud- and drug-related money is laundered through legitimate New...

Minimum wage increase: 1 April 2018

The minimum wage in New Zealand has increased from $15.75 to $16.50 per hour. Minister for Workplace Relations and Safety, Iain Lees-Galloway, says the $0.75 rise will benefit around 164,000 workers and their families, and will increase total wages by $129 million per...

Is climate change affecting your work?

Regardless of your stance on global warming, there’s no denying that we’ve had some unusual weather patterns of late. This summer was one of the hottest and stickiest on record – hampering output at times, and making it difficult to operate efficiently. But an...
Safe as houses: Stop Press!

Safe as houses: Stop Press!

Revenue Minister Stuart Nash has confirmed the bright-line test on residential property sales will be extended from two years to five years. At present, income tax must be paid on any gains from residential property sold within two years of acquisition, with some...
What shape are your end-of-year accounts in?

What shape are your end-of-year accounts in?

The end of the financial year can be either stressful or a seamless part of what you do. Ideally, your end-of-year accounts will confirm what you think your business has been doing for the past 12 months. Be a good Scout to avoid end-of-year migraine Being prepared is...
Parental leave — what are your obligations?

Parental leave — what are your obligations?

An employee can take unpaid parental leave from the workplace when they are having a baby or taking on the permanent care of a child under six years old, providing the employee meets the eligibility criteria. If the employee is eligible for parental leave and takes...
What are the new Government’s tax priorities?

What are the new Government’s tax priorities?

One of the first questions business owners ask when a new government enters power is what changes, if any, are coming in the area of tax. Revenue Minister Stuart Nash provided a good steer on that when he addressed Chartered Accountants Australia and New Zealand. The...

IRD Business Transformation update

IRD into Stage Two of Business Transformation IRD’s been working hard to be easier to do business with. As you read this, its new tax system is kicking in, giving you new and simpler ways to manage your GST obligations through myIR. Enhancements include the...
Presents and parties

Presents and parties

Are you planning a Christmas event for your clients? Is gift-giving on your to-do list? Take a minute to refresh yourself on what is deductible as a business related expense. Presents Are you thinking of gifts for clients, business associates or team members? If gifts...
Becoming an employer of choice

Becoming an employer of choice

If you have an excellent reputation as an employer, your productivity and profit should benefit. The thing is, though, a reputation like this comes from what you believe and show. It may require some creativity. Read our feature in this month’s newsletter to...
How do you draw talent to your door?

How do you draw talent to your door?

Getting a job at Google is reportedly 10 times harder than getting a place at institutions like Harvard or Yale. The company employs 7000 people a year, from 3 million applicants. Google has staff friendly initiatives that attract top candidates. Your business may be...
IRD has good news and bad news on FBT

IRD has good news and bad news on FBT

You may provide company vehicles to some employees. In some cases, the vehicle is a work tool – for example, a ute for a project manager. In other cases, it is part of a salary package. Whatever the reason, Inland Revenue has good news and bad news. The good news is...
Better control coming over hazardous substances

Better control coming over hazardous substances

Fifty years ago, farmers and others sprayed toxic chemicals onto weeds in blissful ignorance of the need for personal protective equipment. How things have changed! Today, regulations govern the handling and use of all hazardous substances. And, like many other safety...

Will the tax man knock on your door?

A large percentage of audit targets used to be selected randomly. Time has certainly moved on and Inland Revenue (IR) now has much more sophisticated methods of targeting non compliers, through methods such as ‘data mining’. For example the Land Information New...

New Zealand trust law to be overhauled

Parliamentary plastic surgery is in store for the Trustee Act, to make trust law easier to access and understand. On 1 August, Justice Minister Amy Adams introduced the Trusts Bill to Parliament. This will be the first significant change since the introduction of the...

GST made easy

Do you hate it when GST return time rolls around? If so, you’re in good company. For many business owners, the pain isn’t so much having to hand money over to IRD, but having to prepare and file a return. But that pain is easy to avoid. Here’s how: If we complete your...
Business culture tied to business performance

Business culture tied to business performance

While it’s easy to think of business culture as a bit soft compared with, say, achieving sales, in fact it’s anything but. A 2014 study reported that public companies named in a “Best Places to Work” list in 2009 outperformed the S&P 500 by 115 percent in the...
Airbnb usually a tax case on its own

Airbnb usually a tax case on its own

If you use Airbnb to provide short-term accommodation in your house in which you also live, the IRD’s “mixed-use asset (holiday home)” rules don’t apply and guests are not classed as boarders. Except when you list a whole house which is vacant for 62 days each year,...
Must I pay tax on holiday home income? That depends

Must I pay tax on holiday home income? That depends

If you rent out your holiday home sometimes, you may have to pay tax on that income. The IRD says you have a “mixed-use” holiday home if, during the tax year, you use it for: Private use, and Income-earning use, and It’s unoccupied for 62 days or more. It is still...
Tax is payable on rental income . . . mostly

Tax is payable on rental income . . . mostly

If you receive income, you must pay tax. So if you have rental income, you have to pay tax on it, right? Maybe, maybe not – if you get rent from boarders or homestays. Boarders and homestays When you get income from boarders or homestays, your tax position depends on...
Boats and aircraft may generate a tax liability

Boats and aircraft may generate a tax liability

Sometimes boats and aircraft are used for private and commercial purposes. In such cases, the income from their use may be liable for tax. Boats and aircraft (valued at more than $50,000) become mixed-use assets if they are used privately sometimes, and commercially...
Keep cash crowned as king

Keep cash crowned as king

If you want to succeed in business, understand that Cash is King. Your business can’t survive without cash. The following six takeaways are essential for business success: Protect your cash position, by knowing what it is. Build a cashflow statement and always keep it...

Cashflow is not profit – and vice versa

The purpose of a business is to make money, and that means you have to know the difference between profit and cashflow. Net profit is what you have left after you deduct all your business expenses from all your revenue. You change net profit only by changing the...

Fairer tax rules affect cashflow

A tax bill passed in May made changes that affect cashflow. Companies get more choice with RWT From 2017-18, companies can choose to not deduct resident withholding tax on a fully imputed dividend paid to a corporate shareholder. A fully imputed dividend has a tax...
IRD AIMs to please – next year

IRD AIMs to please – next year

A key principle of the tax system is taxpayers should pay tax as income is earned. That doesn’t work well for businesses with seasonal or volatile incomes, and is why the Government announced, early this year, a new method for paying provisional tax. The Accounting...
Several ways taxpayers can get caught out

Several ways taxpayers can get caught out

Taxpayers who earn income from various sources may get caught short if they don’t plan ahead. This could come about in various ways: Airbnb Overseas investment Shares in an overseas company Airbnb income If you rent rooms or homes through Airbnb, you may not realise...

Contractors get more tax choice

The way contractors pay tax changed on 1 April, giving greater choice, and making it easier to get tax right. The rules around schedular payments have changed to allow this, and are compulsory for all contractors hired by a recruiter — or other labour hire business —...
R&D tax credit changes can boost cashflow

R&D tax credit changes can boost cashflow

Changed Research and development (R&D) tax credit rules, which came into effect at the start of the 2016 income year, can help business cashflow. The R&D Tax Credit regime allows a “cash out” of an organisation’s R&D tax losses. The cashed-out amount...
Deductions for bad debts denied

Deductions for bad debts denied

The High Court has held that the taxpayer failed to establish that debts were written off as bad at the relevant time or that the debtors were released from making all remaining payments by law. The taxpayer also failed to establish that he carried on business for the...
R&D tax incentive package announced

R&D tax incentive package announced

On 3 October 2018, the Government announced the design of the research and development (R&D) tax incentive following extensive consultation with business. The key features of the R&D tax incentive include: a credit rate of 15% a $120 million cap on eligible...
Social Security legislation rewrite now law

Social Security legislation rewrite now law

The Social Security Act 2018 (No 32 of 2018) received the Royal assent on 28 September 2018 and mainly comes into force on 26 November 2018. The Social Security Bill (now the Social Security Act 2018) was formerly part of the Social Security Legislation Rewrite Bill...