Accounting & Financial
ird closed 18th april - 26th april 2019
In March 2019, Parliament passed legislation to make the income tax process for most individuals more straightforward. These changes will apply from 1 April 2019 and to the end-of-year processes for the current tax year (1 April 2018-31 March 2019).
End-of-year processes are now much simpler.
Most salary and wage earners won’t need to do anything to finalise their tax position.
Personal tax summaries (PTSs) are no longer required and many people will get a refund automatically, some for the very first time.
If we notice anyone paying too much or too little tax, we’ll suggest a different tax rate or recommend a tailored tax code.
If you need to provide us with more information, you can easily amend your income tax assessment in myIR.
Pre-population of returns will simplify the process for IR3 customers.
If you earn other income (e.g. business or rental), we will pre-populate income tax returns with employment or investment income information where tax has already been deducted.
Most tax refunds will be paid automatically from late May until July. To find out more about the changes, and what these mean for you, visit our website. www.ird.govt.nz or Ask us at Karaka Accounting Services Ltd.
End-of-year processes are now much simpler.
Most salary and wage earners won’t need to do anything to finalise their tax position.
Personal tax summaries (PTSs) are no longer required and many people will get a refund automatically, some for the very first time.
If we notice anyone paying too much or too little tax, we’ll suggest a different tax rate or recommend a tailored tax code.
If you need to provide us with more information, you can easily amend your income tax assessment in myIR.
Pre-population of returns will simplify the process for IR3 customers.
If you earn other income (e.g. business or rental), we will pre-populate income tax returns with employment or investment income information where tax has already been deducted.
Most tax refunds will be paid automatically from late May until July. To find out more about the changes, and what these mean for you, visit our website. www.ird.govt.nz or Ask us at Karaka Accounting Services Ltd.
changes to acc for self employed 15 April 2019
Cover Plus Extra
If you are Self Employed but don't have Cover Plus Extra
- Cover plus Extra (CPX) is where you set the amount of cover with ACC and pay a premium based on that amount and not based on last years Income. A definite advantage if your Income is low.
- Invoicing started April 1st and will continue right through to until April 30th. If you haven’t received an expected invoice by May 1st, please let us know.
- As this product has a strict cancellation policy ACC will be sending text and email prompts to customers who haven’t paid or set up a payment plan just before their due date. Please update your information to include an email address and mobile phone number otherwise you may not receive a reminder from ACC. Reminders will not be sent by mail.
- Having a payment plan ensures your policy won’t be cancelled. Payment plans can be set up through MyACC for Business or by giving ACC a call on 0800 227 776 once the invoice has been received.
If you are Self Employed but don't have Cover Plus Extra
- One of the outcomes of last year’s levy consultation was the decision to change the way ACC invoice self-employed customers. From 1 April 2019, they will now be invoicing customers based on your actual income at the end of each year, rather than invoicing you in advance based on last year’s earnings.
What you need to know - Correction made by ACC. - Most self-employed customers will not receive an invoice in the 2019/2020 year.
- The next self-employed invoices will be sent in the 2020/2021 year (approx. July-August 2020).
- These invoices cover the 2019/2020 year and are calculated using the 2019/2020 year’s actual earnings filed from Inland Revenue.
Acc refunds - do you qualify?
If you were in your first year of self-employment between 2002 and 2017, or paid provisional ACC levies after ceasing trading, ACC may owe you a refund.
ACC expects to refund around $100 million to approximately 300,000 business customers who were incorrectly charged levies during that time.
ACC will refund:
ACC expects the refund process to be completed by 31 March 2019.
What you need to doIf you think you might be eligible for a refund, ACC needs your current contact details.
Either visit acc.co.nz and fill in a web form with your contact details, or if you’re already registered for MyACC for Business, use that channel to check your contact details are up-to-date.
ACC will update their webpage as more details become available.
ACC website (external link)
How did this happen?An update to ACC’s billing and policy system identified these issues.
Preparations for a new levy system included a legal check on whether the new levy system would be compliant with regulations. ACC discovered the regulations from 2002 were drafted in a way that didn’t allow for levying of first-year self-employed.
They also uncovered the second issue with provisional invoices paid by businesses that had subsequently ceased trading or changed their business structure, but hadn’t informed ACC.
ACC suspended invoicing new self-employed customers for their first year when the issue was uncovered. No first-year invoices have been issued since March 2017, and this will continue until the regulations are updated.
“I would like to apologise to customers who have been affected, our focus now is to make this right as soon as we can,” says Phil Riley, ACC’s Head of Business Customer Service Delivery.
ACC expects to refund around $100 million to approximately 300,000 business customers who were incorrectly charged levies during that time.
ACC will refund:
- all first-year levies collected between 2002-2017 from self-employed customers who worked full-time (averaged over 30 hours per week over the financial year.) This affects around 106,000 customers and equates to approximately $36 million in levies.
- businesses who paid provisional invoices and weren’t required to do so because they’d subsequently ceased trading or had changed their business structure. This amounts to around $64 million.
ACC expects the refund process to be completed by 31 March 2019.
What you need to doIf you think you might be eligible for a refund, ACC needs your current contact details.
Either visit acc.co.nz and fill in a web form with your contact details, or if you’re already registered for MyACC for Business, use that channel to check your contact details are up-to-date.
ACC will update their webpage as more details become available.
ACC website (external link)
How did this happen?An update to ACC’s billing and policy system identified these issues.
Preparations for a new levy system included a legal check on whether the new levy system would be compliant with regulations. ACC discovered the regulations from 2002 were drafted in a way that didn’t allow for levying of first-year self-employed.
They also uncovered the second issue with provisional invoices paid by businesses that had subsequently ceased trading or changed their business structure, but hadn’t informed ACC.
ACC suspended invoicing new self-employed customers for their first year when the issue was uncovered. No first-year invoices have been issued since March 2017, and this will continue until the regulations are updated.
“I would like to apologise to customers who have been affected, our focus now is to make this right as soon as we can,” says Phil Riley, ACC’s Head of Business Customer Service Delivery.
payday filing becomes compulsory from 1 Apr 2019
www.business.govt.nz
When: Since 1 April 2018, employers have been able to file payroll information every payday. From 1 April 2019, employers will be required to file payroll information every payday.
What: If you’re a New Zealand employer paying more than $50,000 PAYE and Employer Superannuation Contribution Tax (ESCT) per year, you’ll have to file electronically through payroll software or myIR from 1 April 2019.
If your total PAYE/ESCT is less than $50,000 for the previous year ended 31 March 2018, you can either:
PAYE filing is changing [PDF,93KB] (external link) — Inland Revenue
Get ready for payday filing
Your questionsWhat if some of my employees are paid monthly, and others fortnightly?
You’ll have to file employment information for all employees within two working days of paying them. So, if you pay some employees monthly and others fortnightly, you’ll need to file within two working days of the fortnightly payday and within two working days of the monthly payday.
PAYE payment dates and methods of payment remain the same. This means you’ll need to continue filing an IR345 (employer deductions form) and sending through payment to Inland Revenue once a month.
It’s important that you still only send payment to Inland Revenue once a month. This will ensure the payment goes to the right place, and isn’t offset against something else.
What forms are changing?
The new online forms will be slightly different, because Inland Revenue will need some extra information from you, eg new employees’ contact details and date of birth.
At the moment, employers file two forms with Inland Revenue:
Don’t forget all employers will need to be using payday filing by 1 April 2019.If you use payroll software, talk to your provider about how they can help.
What is the time limit for payday filing?
If you’re filing electronically, you need to file within two working days of paying your employee.
If your annual PAYE/ESCT is less than $50,000 and you’re filing on paper, you’ll have ten working days to file.
Regional holidays are considered working days, so you’ll need to count them when working out when to file payroll information.
The days between – and including – 25 December and 15 January aren’t considered working days, so all payday filing for that period will be due by 17 January.
Isn’t this creating more work for employers?
Not necessarily – if you’re using software, payday filing can become part of your payroll process, rather than an extra step.
It means that Inland Revenue will receive more timely and accurate information, which will then be used to give your employees more certainty about their tax obligations and entitlements.
Do I have to call to opt-in to payday filing?
No you don’t. If you want to start payday filing, you can opt in through your myIR account. You can do this under ‘I want to’ in the ‘My business’ section of myIR. If you file directly from your software, you don’t need to opt in, just send in your first employment information schedule and you’re all set.
Once you've opted in, the ‘Payroll returns’ account will appear under your accounts and you can start payday filing at the beginning of the next month.
When: Since 1 April 2018, employers have been able to file payroll information every payday. From 1 April 2019, employers will be required to file payroll information every payday.
What: If you’re a New Zealand employer paying more than $50,000 PAYE and Employer Superannuation Contribution Tax (ESCT) per year, you’ll have to file electronically through payroll software or myIR from 1 April 2019.
If your total PAYE/ESCT is less than $50,000 for the previous year ended 31 March 2018, you can either:
- file online, or
- file on paper (but only from April 2019).
PAYE filing is changing [PDF,93KB] (external link) — Inland Revenue
Get ready for payday filing
Your questionsWhat if some of my employees are paid monthly, and others fortnightly?
You’ll have to file employment information for all employees within two working days of paying them. So, if you pay some employees monthly and others fortnightly, you’ll need to file within two working days of the fortnightly payday and within two working days of the monthly payday.
PAYE payment dates and methods of payment remain the same. This means you’ll need to continue filing an IR345 (employer deductions form) and sending through payment to Inland Revenue once a month.
It’s important that you still only send payment to Inland Revenue once a month. This will ensure the payment goes to the right place, and isn’t offset against something else.
What forms are changing?
The new online forms will be slightly different, because Inland Revenue will need some extra information from you, eg new employees’ contact details and date of birth.
At the moment, employers file two forms with Inland Revenue:
- IR348 (an employer monthly schedule), and
- IR345 (an employer deductions form).
Don’t forget all employers will need to be using payday filing by 1 April 2019.If you use payroll software, talk to your provider about how they can help.
What is the time limit for payday filing?
If you’re filing electronically, you need to file within two working days of paying your employee.
If your annual PAYE/ESCT is less than $50,000 and you’re filing on paper, you’ll have ten working days to file.
Regional holidays are considered working days, so you’ll need to count them when working out when to file payroll information.
The days between – and including – 25 December and 15 January aren’t considered working days, so all payday filing for that period will be due by 17 January.
Isn’t this creating more work for employers?
Not necessarily – if you’re using software, payday filing can become part of your payroll process, rather than an extra step.
It means that Inland Revenue will receive more timely and accurate information, which will then be used to give your employees more certainty about their tax obligations and entitlements.
Do I have to call to opt-in to payday filing?
No you don’t. If you want to start payday filing, you can opt in through your myIR account. You can do this under ‘I want to’ in the ‘My business’ section of myIR. If you file directly from your software, you don’t need to opt in, just send in your first employment information schedule and you’re all set.
Once you've opted in, the ‘Payroll returns’ account will appear under your accounts and you can start payday filing at the beginning of the next month.
business expenses: what can you claim?
www.business.govt.nz 20th September 2018
Getting a tax agent or accountant to complete your return may end up saving you money.They know all the things you can claim for.
What are expenses?Expenses are the costs you incur in the day-to-day running of your business. At tax time, your total profit (the amount you need to pay tax on) is your taxable income minus the expenses you can claim — so the more you can claim, the less tax you have to pay.
Business expenses — Inland Revenue
Business expenses are:
- Day-to-day revenue expenses for running your business, e.g. advertising or wages.
- Assets you buy, e.g. machinery, computers or tools, which are called capital expenses. Note: items that cost $500 or more must usually be depreciated.
GST
If you're registered for GST, your income tax return will exclude GST on your income and expenses — GST is accounted for in your GST return.
If you're not registered for GST, your income tax return will include GST on your expenses only.
Depreciation: How to spread the cost of your assets
All self-employed people, including contractors and sole traders, can claim expenses against their income.
What you can claim for Business expenses can include:
- vehicle expenses, transport costs and travel for business purposes
- rent paid on business premises
- depreciation on items like computers and office furniture
- interest on borrowing money for the business
- some insurance premiums
- work-related journals and magazines
- membership of professional associations
- home office expenses
- work-related mobile phones and phone bills
- stationery
- work uniforms
- tax agent’s fees.
It's a good idea to use Inland Revenue's vehicle logbook template — download this spreadsheet from the Tool for Business website. See link at the bottom of the page.
Tool for Business downloads: Vehicle logbook template — Inland Revenue
Watch Inland Revenue’s animation explaining business expenses.
How much can you claim?
You can't claim the whole cost of all items, even those only for business use. Some things you can only claim half for, e.g. some entertainment expenses. You can only claim 100% of the cost for an expense that’s entirely for business use.
If you have an expense that’s partly for your business and partly for your private use, you can claim the proportion that relates to your business.
Example:
If you spend half the time driving a vehicle to deliver goods and the other half for your own reasons, you can claim 50% of the travel costs for your business.
For some expenses, like business entertainment, e.g. client meals and staff functions, you can only claim half.
Entertainment expenses — Inland Revenue
Working from home
If you use an area of your home for your business, e.g. your study or garage, you can claim a portion of the household expenses, e.g:
- rates
- power
- house and contents insurance
- mortgage interest if you own the home
- rent if you are renting the home.
How it works:
If your home is 100 square metres and your working space is 10 square metres — 10% of the total area — you can claim 10% of expenses that are not solely for your business, eg your home phone line.
If you aren't using a separate area of your home for business, you'll need to take into account how much time you spend on your business and the area used.
If you're GST registered, the GST content on home office expenses can be claimed as they’re paid — in each GST return period — or at the end of your tax year. Mortgage interest and rent don’t include GST.
Using your home for business — Inland Revenue
for the whole IRD Newsletter -
employers assistance newsletter aug 2018
Welcome to our August update.
The Green's Domestic Violence Bill has been passed into law. While we all agree domestic violence needs to be stamped out in every instance, the Government unfortunately has pushed the cost on to the Employer.
Unions are going to court to try and get contract couriers classed as employees by definition. Some information on WorkSafe and 'Enforceable Undertakings', and you can now get all your own documents electronically signed with our Employers Toolbox.
Thank you for reading, please click on the articles below for more information.
Domestic Violence - Victim's Protection bill
Domestic Violence Victims' Protection Bill has been passed and will become law on April 1st 2019.
New Zealand has a problem with domestic violence. Nearly half of all homicides are family related and NZ has the worst rate of family and intimate-partner violence in the world. Police report that they respond to incidents of this nature every 5 1/2 mins on average, and it is estimated 80% also go unreported. Family violence is estimated to cost the country between $4.1 billion and $7 billion each year.
This new legislation is aimed at addressing the issue and providing a legislative framework to support the victims through changes to the Human rights Act, the Holidays Act, Health & Safety at Work and the Employment Relations Act. The costs and obligations of this falling squarely at the feet of the Employer.
From April 1 2019 victims of domestic violence will be entitled to 10 days paid (by the Employer) leave per year in addition to their Holidays and sick leave entitlement.
Similar laws in Australia have just taken effect at the beginning of this month (April 2018) allowing victims an extra 5 days unpaid leave per year.
By default domestic violence victims will not have to provide proof of their claim to the Employer, and will also be entitled to flexible work conditions designed to ensure their safety. Claims for paid leave under this new legislation may also be for incidents of domestic violence relating to periods prior to the Employee's employment with their current Employer.
Given the scale of domestic violence in NZ this will undoubtedly affect a huge proportion of business owners going forward from next year.
We will in due course be updating our Agreements and Policy templates around an Employer's best practice approach for these situations.
Worksafe and Enforceable Undertakings
An enforceable undertaking is where a duty holder (usually a Company) is found (or alleged) to be in breach of the Health & Safety at Work 2015 Act (HSWA) and accepts to follow a prescribed path to remedy the problems according to WorkSafe's guidance. It is voluntary on the part of the duty holder, but once accepted it is legally binding and enforceable.
Enforceable undertakings are an alternative to a straight prosecution by WorkSafe. It has to be requested by the duty holder rather than suggested by WorkSafe and it doesn't always mean it's a easy or cheap option for the business.
Some of the actions covered by an undertaking are:
As an example of this WorkSafe have just accepted an enforceable undertaking from Woods Glass based in Auckland.
A worker climbed onto a glass cutting machine to free a blockage, once cleared the machine continued operation and dragged the worker's leg in causing serious injuries.
The subsequent WorkSafe investigation found Woods Glass had failed to honour its health and safety obligations under HSWA and including a lack of safe procedures and guarding for the machine.
The following enforceable undertaking was then agreed to by WorkSafe, Woods Glass and the victim:
Union goes to Court to define Employee or Contractor
FIRST Union has begun proceedings in the Employment Court to determine the employment status of courier drivers, employees or contractors.
Generally courier drivers and some truck drivers are considered contractors and sign independent contractor agreements. They usually own their transport, pay for their own equipment and aren't afforded any form of leave from those who engage their services.
However, some businesses who engage these contractors do so and enforce exclusivity of work and vehicle branding, such as NZ Post. FIRST Union will of course argue the drivers are then employees, not contractors.
The union has in the past attempted to get this kind of restriction of exclusivity of service banned through private members Bills, but they've never made it through Parliament. So this time they're lodging directly with the Employment Court.
The result of this would undoubtedly have knock-on effects for other industries and limitations for use of independent contractor agreements, not to mention any remedial actions for these workers against their 'Employers'.
If the Court is required to determine the 'real nature of the relationship' between parties they will look at all relevant matters, and will not treat the title that the parties use to describe the relationship as conclusive.
In other words, just because you and the worker decide to call the worker a contractor, it doesn’t mean that the Courts, (and the IRD) will agree that they are one.
Over the years the Courts have adopted a number of tests to help determine whether the relationship is really an employee/employer relationship, or that of a contractor/principal. We also have compiled such a list for the benefit of our clients. This test list is available in the Library section of our Employers Toolbox for subscribers, or as a free download this month to our readers.
The Green's Domestic Violence Bill has been passed into law. While we all agree domestic violence needs to be stamped out in every instance, the Government unfortunately has pushed the cost on to the Employer.
Unions are going to court to try and get contract couriers classed as employees by definition. Some information on WorkSafe and 'Enforceable Undertakings', and you can now get all your own documents electronically signed with our Employers Toolbox.
Thank you for reading, please click on the articles below for more information.
Domestic Violence - Victim's Protection bill
Domestic Violence Victims' Protection Bill has been passed and will become law on April 1st 2019.
New Zealand has a problem with domestic violence. Nearly half of all homicides are family related and NZ has the worst rate of family and intimate-partner violence in the world. Police report that they respond to incidents of this nature every 5 1/2 mins on average, and it is estimated 80% also go unreported. Family violence is estimated to cost the country between $4.1 billion and $7 billion each year.
This new legislation is aimed at addressing the issue and providing a legislative framework to support the victims through changes to the Human rights Act, the Holidays Act, Health & Safety at Work and the Employment Relations Act. The costs and obligations of this falling squarely at the feet of the Employer.
From April 1 2019 victims of domestic violence will be entitled to 10 days paid (by the Employer) leave per year in addition to their Holidays and sick leave entitlement.
Similar laws in Australia have just taken effect at the beginning of this month (April 2018) allowing victims an extra 5 days unpaid leave per year.
By default domestic violence victims will not have to provide proof of their claim to the Employer, and will also be entitled to flexible work conditions designed to ensure their safety. Claims for paid leave under this new legislation may also be for incidents of domestic violence relating to periods prior to the Employee's employment with their current Employer.
Given the scale of domestic violence in NZ this will undoubtedly affect a huge proportion of business owners going forward from next year.
We will in due course be updating our Agreements and Policy templates around an Employer's best practice approach for these situations.
Worksafe and Enforceable Undertakings
An enforceable undertaking is where a duty holder (usually a Company) is found (or alleged) to be in breach of the Health & Safety at Work 2015 Act (HSWA) and accepts to follow a prescribed path to remedy the problems according to WorkSafe's guidance. It is voluntary on the part of the duty holder, but once accepted it is legally binding and enforceable.
Enforceable undertakings are an alternative to a straight prosecution by WorkSafe. It has to be requested by the duty holder rather than suggested by WorkSafe and it doesn't always mean it's a easy or cheap option for the business.
Some of the actions covered by an undertaking are:
- Remedy the harm to any victims
- Support progressive and higher standards of Health & Safety for all stakeholders of the duty holder
- Support WorkSafe to meet their strategic goals
As an example of this WorkSafe have just accepted an enforceable undertaking from Woods Glass based in Auckland.
A worker climbed onto a glass cutting machine to free a blockage, once cleared the machine continued operation and dragged the worker's leg in causing serious injuries.
The subsequent WorkSafe investigation found Woods Glass had failed to honour its health and safety obligations under HSWA and including a lack of safe procedures and guarding for the machine.
The following enforceable undertaking was then agreed to by WorkSafe, Woods Glass and the victim:
- Providing amends in the form of payment to the victim and support to the victim.
- Developing a suite of initiatives to benefit the workplace and workers.
- Hosting workshops for Lisec cutting machine operators within the glass industry.
- Presenting and sponsoring a session at the Windows Association of New Zealand and Glass Association New Zealand annual conferences.
- Providing specialised training courses in conjunction with the Glass & Glazing Institute NZ.
- Producing community resources on health, safety, wellbeing, inclusion, and diversity.
- Offering a scholarship for a trade qualification at the Mount Albert Unitech Institute of Technology.
- Sponsoring Community Alcohol & Other Drug Services in the South Auckland community for language interpretation services.
Union goes to Court to define Employee or Contractor
FIRST Union has begun proceedings in the Employment Court to determine the employment status of courier drivers, employees or contractors.
Generally courier drivers and some truck drivers are considered contractors and sign independent contractor agreements. They usually own their transport, pay for their own equipment and aren't afforded any form of leave from those who engage their services.
However, some businesses who engage these contractors do so and enforce exclusivity of work and vehicle branding, such as NZ Post. FIRST Union will of course argue the drivers are then employees, not contractors.
The union has in the past attempted to get this kind of restriction of exclusivity of service banned through private members Bills, but they've never made it through Parliament. So this time they're lodging directly with the Employment Court.
The result of this would undoubtedly have knock-on effects for other industries and limitations for use of independent contractor agreements, not to mention any remedial actions for these workers against their 'Employers'.
If the Court is required to determine the 'real nature of the relationship' between parties they will look at all relevant matters, and will not treat the title that the parties use to describe the relationship as conclusive.
In other words, just because you and the worker decide to call the worker a contractor, it doesn’t mean that the Courts, (and the IRD) will agree that they are one.
Over the years the Courts have adopted a number of tests to help determine whether the relationship is really an employee/employer relationship, or that of a contractor/principal. We also have compiled such a list for the benefit of our clients. This test list is available in the Library section of our Employers Toolbox for subscribers, or as a free download this month to our readers.
payday filing
All employers will need to switch to payday filing by 1 April 2019.
If you’re a New Zealand employer paying more than $50,000 PAYE and Employer Superannuation Contribution Tax (ESCT) per year, you’ll need to file electronically through payroll software or myIR from 1 April 2019.
If your total PAYE/ESCT is less than $50,000 for the previous year ended 31 March 2018 you can either:
Currently, employers file employee earnings and PAYE information with Inland Revenue every month, regardless of how frequently they pay their employees. Under payday filing, this information will be reported to Inland Revenue every time your employees are paid.
Instead of submitting an employer monthly schedule, you’ll need to submit an employment information schedule after every payday.
Collecting payroll information more regularly will help Inland Revenue offer increased certainty about employees’ tax obligations and entitlements.
If you’re a New Zealand employer paying more than $50,000 PAYE and Employer Superannuation Contribution Tax (ESCT) per year, you’ll need to file electronically through payroll software or myIR from 1 April 2019.
If your total PAYE/ESCT is less than $50,000 for the previous year ended 31 March 2018 you can either:
- file online, or
- by paper returns (but only from April 2019).
Currently, employers file employee earnings and PAYE information with Inland Revenue every month, regardless of how frequently they pay their employees. Under payday filing, this information will be reported to Inland Revenue every time your employees are paid.
Instead of submitting an employer monthly schedule, you’ll need to submit an employment information schedule after every payday.
Collecting payroll information more regularly will help Inland Revenue offer increased certainty about employees’ tax obligations and entitlements.
Payday filing — Inland Revenue
How does payday filing work?There are three ways you can file online:
You may find payday filing easier if you use payroll software, because this allows your payroll information - including salary, wages, PAYE and other deductions - to be automatically sent to Inland Revenue at the same time as you pay your employees, which could save you time.
If you submit employment information directly from your payroll software, you’ll still need to submit an employer deductions form (IR345) and arrange payment. The due dates for paying and submitting the IR345 stay the same.
How does payday filing work?There are three ways you can file online:
- direct from your payroll software
- by file upload in myIR, and
- on-screen in myIR.
You may find payday filing easier if you use payroll software, because this allows your payroll information - including salary, wages, PAYE and other deductions - to be automatically sent to Inland Revenue at the same time as you pay your employees, which could save you time.
If you submit employment information directly from your payroll software, you’ll still need to submit an employer deductions form (IR345) and arrange payment. The due dates for paying and submitting the IR345 stay the same.
valuit - valu in review - investment property news
This informative newsletter is from valuit
Check it out - we've made some exciting changes!
Welcome to the 5th Edition for 2018 of Valu-In-Review! Your newsletter for all things property from around NZ. This month we've changed things up a bit, and added new content that's geared specifically to help you as a property investor learn more, and keep up to date with this industry.
Here at Valuit, we're all about maximising your cash-flow and growing your investment so keep reading to see how we can help you in achieving this.
Here's what we have for you this month:
Valuit will help you achieve more from your property investment. As New Zealand’s most experienced property depreciation experts, we will help you to minimise your tax liabilities, in turn maximising the return you get for your investment, creating greater cash flow.
Market rents
Could you be charging more rent? Find out what the current average rents for your area are right now. Read more
Hot tips and reminders: Insulation
Insulation statements are now compulsory with all new tenancy agreements. Insulation will be compulsory in all rental homes from 1 July 2019.
To find out exactly what you need to do as a landlord, click here
What has the NZ media been saying......in review.
Investors rumbling on in property market
The latest buyer classification data shows that multiple property owners remain a firm presence in the market; with this category securing 38 per cent of sales nationwide in April. Read more
Power imbalance between tenants and their property managers or landlords
Property managers are the bane of many tenants' lives. Read more
Capital valuations 'don't reflect market value', confusing for entry-level investors
Council-issued valuations are confusing and can scare off first-time commercial property investors, a sales director says. Read more
Property sellers rake in $3bn over last three months, according to latest CoreLogic data
House sellers across New Zealand are still cashing in despite some markets cooling off, pocketing $3.1 billion in profit during the first three months of 2018, new figures show. Read more
Winter chill hits New Zealand property market
NZ's property market has flattened and is likely to stay that way for at least the rest of the year, valuation data provider QV says. Read more
NZ capital gains tax would lift rate of home ownership - bank
Introducing a 10 per cent capital gains tax would reduce New Zealand house prices by 10.9 per cent and lead to a higher rate of home ownership, according to a leading bank economist. Read more
Property investors praise Government decision to soften foreign buyers ban
The Government's decision to soften their stance on foreign buyers is being hailed as a win for renters. Read more
Residential property price increases expected
Confidence in New Zealand’s residential property market is now higher than before last year’s election, with house price increases expected in every market surveyed. Read more
Diana Clement: Visitors look for extra details
Letting property to holiday makers and short-term guests is becoming increasingly popular. Read more
Property markets waits nervously for tax changes
It is now safe to say that the brief market resurgence that began in October last year is over. Read more
Brian Fallow: Tax could prick property bubbles
Over the past seven years, NZ has experienced one of the fastest rates of house price inflation in the developed world. Read more
Don't hit the panic button when markets turn down
The human brain is hardwired to avoid pain. That's why the intensity of the hurt from a $100 investment loss is many times that of the pleasure brought by a $100 investment gain. Read more
Proposed Changes to Overseas Investment Act Amendment Bill
The Select Committee has completed its deliberations on the Overseas Investment Act Amendment Bill (Bill) with the publishing of its report on 18 June. Read more
As many as one in five house buyers in NZ may be 'foreign'
Restrictions on foreigners buying NZealand property will depress prices, one economist says – and the effect may be greater than some have predicted. Read more
Opinion: Why renting in Auckland sucks
I had barely unpacked in my first rental when the landlord told me he was selling the house. Read more
Will baby boomers cop property-tax hit to help young Kiwis escape debt?
Acting Prime Minister Winston Peter's "aspirational" target of an average house price equal to around five times the average annual wage may be unachievable, but it reminds me how skewed the market has become in the last few decades – to the next generation's cost. Read more
Depreciation update - the technical stuff.
* Have you or a friend purchased recently? Make sure you are reducing your tax liability! Book an appraisal / enquire here
* Learn something new - Check out our video. We love it, do you?: Depreciation - the basics
* Recent commercial example: Here's what a Commercial Client saved.YOU WILL BE IMPRESSED! Click here to view
Your ultimate directory of "Tools and Resources"
We now provide you with access to some amazing resources for Landlords.
This months focus is on a SMART PHONE APP.
Have you tried.............?
Rent Tracker
RentTracker is an easy to use property management app for landlords and property managers.
Unlike other apps, RentTracker not only organizes your tenant and contractor information, but it also allows you to enter rent payments, expenses, and export financial reports.
Available for APPLE and ANDROID
Click here to view this and other useful APPS.
Top Property Professionals
Did you know we also have a professionals section on our website? This is alist and profile of some of the professionals that we have found to be active in the property investment sector.
Is your accountant, or advisor listed? If not let us know who they are and we will look to add them. Tell us who they are.
Are you a property professional and want to be featured by Valuit? Find out how you can be included in this section. Click here for more information.
Welcome to the 5th Edition for 2018 of Valu-In-Review! Your newsletter for all things property from around NZ. This month we've changed things up a bit, and added new content that's geared specifically to help you as a property investor learn more, and keep up to date with this industry.
Here at Valuit, we're all about maximising your cash-flow and growing your investment so keep reading to see how we can help you in achieving this.
Here's what we have for you this month:
- Are you maximising the rent you get each month?
- Insulation - what you need to know and do.
- Recent property investment news - stay up-to-date with what's happening in NZ.
- Depreciation update - Depreciation, not always a downer!
- Tools and resources - Have you tried these great smart phone APPS?
Valuit will help you achieve more from your property investment. As New Zealand’s most experienced property depreciation experts, we will help you to minimise your tax liabilities, in turn maximising the return you get for your investment, creating greater cash flow.
Market rents
Could you be charging more rent? Find out what the current average rents for your area are right now. Read more
Hot tips and reminders: Insulation
Insulation statements are now compulsory with all new tenancy agreements. Insulation will be compulsory in all rental homes from 1 July 2019.
To find out exactly what you need to do as a landlord, click here
What has the NZ media been saying......in review.
Investors rumbling on in property market
The latest buyer classification data shows that multiple property owners remain a firm presence in the market; with this category securing 38 per cent of sales nationwide in April. Read more
Power imbalance between tenants and their property managers or landlords
Property managers are the bane of many tenants' lives. Read more
Capital valuations 'don't reflect market value', confusing for entry-level investors
Council-issued valuations are confusing and can scare off first-time commercial property investors, a sales director says. Read more
Property sellers rake in $3bn over last three months, according to latest CoreLogic data
House sellers across New Zealand are still cashing in despite some markets cooling off, pocketing $3.1 billion in profit during the first three months of 2018, new figures show. Read more
Winter chill hits New Zealand property market
NZ's property market has flattened and is likely to stay that way for at least the rest of the year, valuation data provider QV says. Read more
NZ capital gains tax would lift rate of home ownership - bank
Introducing a 10 per cent capital gains tax would reduce New Zealand house prices by 10.9 per cent and lead to a higher rate of home ownership, according to a leading bank economist. Read more
Property investors praise Government decision to soften foreign buyers ban
The Government's decision to soften their stance on foreign buyers is being hailed as a win for renters. Read more
Residential property price increases expected
Confidence in New Zealand’s residential property market is now higher than before last year’s election, with house price increases expected in every market surveyed. Read more
Diana Clement: Visitors look for extra details
Letting property to holiday makers and short-term guests is becoming increasingly popular. Read more
Property markets waits nervously for tax changes
It is now safe to say that the brief market resurgence that began in October last year is over. Read more
Brian Fallow: Tax could prick property bubbles
Over the past seven years, NZ has experienced one of the fastest rates of house price inflation in the developed world. Read more
Don't hit the panic button when markets turn down
The human brain is hardwired to avoid pain. That's why the intensity of the hurt from a $100 investment loss is many times that of the pleasure brought by a $100 investment gain. Read more
Proposed Changes to Overseas Investment Act Amendment Bill
The Select Committee has completed its deliberations on the Overseas Investment Act Amendment Bill (Bill) with the publishing of its report on 18 June. Read more
As many as one in five house buyers in NZ may be 'foreign'
Restrictions on foreigners buying NZealand property will depress prices, one economist says – and the effect may be greater than some have predicted. Read more
Opinion: Why renting in Auckland sucks
I had barely unpacked in my first rental when the landlord told me he was selling the house. Read more
Will baby boomers cop property-tax hit to help young Kiwis escape debt?
Acting Prime Minister Winston Peter's "aspirational" target of an average house price equal to around five times the average annual wage may be unachievable, but it reminds me how skewed the market has become in the last few decades – to the next generation's cost. Read more
Depreciation update - the technical stuff.
* Have you or a friend purchased recently? Make sure you are reducing your tax liability! Book an appraisal / enquire here
* Learn something new - Check out our video. We love it, do you?: Depreciation - the basics
* Recent commercial example: Here's what a Commercial Client saved.YOU WILL BE IMPRESSED! Click here to view
Your ultimate directory of "Tools and Resources"
We now provide you with access to some amazing resources for Landlords.
- Smart phone APPS
- Useful Web Links
- Document downloads
This months focus is on a SMART PHONE APP.
Have you tried.............?
Rent Tracker
RentTracker is an easy to use property management app for landlords and property managers.
Unlike other apps, RentTracker not only organizes your tenant and contractor information, but it also allows you to enter rent payments, expenses, and export financial reports.
Available for APPLE and ANDROID
Click here to view this and other useful APPS.
Top Property Professionals
Did you know we also have a professionals section on our website? This is alist and profile of some of the professionals that we have found to be active in the property investment sector.
Is your accountant, or advisor listed? If not let us know who they are and we will look to add them. Tell us who they are.
Are you a property professional and want to be featured by Valuit? Find out how you can be included in this section. Click here for more information.
10 apps that will help your clients to grow their busienss
Once you see how amazing cloud accounting can be, you’ll often ask for useful apps that can integrate with your accounting software to help you achieve more with your time.
This is a list of some of the most useful apps we can recommend for you to improve productivity and document management.
Project Management Apps
Asana
Asana is a simple project management tool designed to help teams organised their workload and get more done. In Asana you can map out steps, assign work, see what’s currently in progress or what still needs to be done, track due dates, and see visually how work is tracking. It’s a great tool to help your team manage their workload and to give you visibility over how project work is tracking.
Try it now
Basecamp
This is a useful app for getting teams together to manage projects. Your clients can keep all their data on one platform and liaise with other team members, clients, and external stakeholders through the platform. Email notifications let team members know when something new has happened, and anything uploaded can be easily searched or discussed in the comment fields.
Try it now.
Expensify
If your client has to deal with several expense reports from their staff every month, then getting an app like Expensify will help them keep track of these for their records. Employees can even take photographs of receipts and match them to their reports, and Expensify integrates with common travel providers to ship travel itineraries direct to the device.
Try it now.
Vend
Hospitality AppsVendVend is point-of-sale software that does more than just process payments – it includes everything you need to run a successful retail or hospitality business. Vend enables you to manage inventory, customer loyalty programs, and ecommerce stores alongside POS functionality. The fact that it works across desktop, tablet and smartphone means you can use Vend to run moving businesses like food trucks and pop-up restaurants with ease.
Try it now.
BarTab
Is your client running a manual ordering system at their bar or restaurant? This nifty little app can help them to save time and drive more sales. Take orders at the table to streamline your whole ordering process and quickly add items and get alerts when stock runs low. Another product from the same company enables the self-service of beer or other drinks.
Try it now.
Foodstorm
Foodstorm enables your client to manage large-scale catering orders in a single web app and enable online ordering and automations to further improve productivity and scalability. If your clients runs a hospitality business that involves catering, then pointing them toward Foodstorm could make a tremendous difference to their business.
Try it now.
Trades and construction Apps
Tradify
Tradify is a simple job management application that can help you manage your quotes, invoices, inventory, vans, and from wherever you are. What makes Tradify so good is that it’s so simple and intuitive that even tradies who aren’t that tech savvy can get the hang of it. The mobile apps for Apple and Android also make it great for logging time and details from site.
Try it now.
Debtor Daddy
Chasing unpaid invoices is one of the biggest headaches for trade businesses. Too often it gets pushed back so often that invoices are completely forgotten, and business suffers as a result. Debtor Daddy is a great tool to chase unpaid invoices automatically, thus freeing up a tradie’s limited free time for their family or other interests.
Try it now.
Professional Services
Practice Ignition
Engage, convert, manage, and bill your clients through Practice Ignition. This clever software streamlines all areas of your professional services business – including proposals, contracts, and letters of engagement. It’s also completely adaptable, so you can use the features you need to ignore those you don’t.
Try it now.
Timely
Timely is an appointment booking software designed to help doctor’s offices, salons, or other clinics streamline their scheduling. As well as managing scheduling, you can sync invoices and payments to Xero to keep track of all your data without double entry.
Try it now.
What kinds of apps are your clients looking for? There’s an exhaustive list of apps for all types of industries on the Xero app marketplace. Prepare a few you recommend for new clients, and they’ll be singing your praises!
Improving your communication and promoting your services is obviously a key to growing your practice – but how is your firm going to cope with all the new business?
Source: Megan Walker-Timu
Contact: www.connectoutsourcing.com
megan.walkertimu@connectoutsourcing.com
nsa on tax - Newsletter
December 2017
Bright-line Test Gone Wrong
Starter for 10 – when is the two year bright-line test, not a two year bright-line test?
Click here to read this newsletter in a pdf format.
Bob the Builder
As with all legislative changes, the devil is in the detail, and sometimes the detail can produce some nasty surprises. This was definitely the case for one client (of NSA) following the introduction of the “concessionary” rules around debt forgiveness earlier in the year.
Click here to read more
Bright-line Test Gone Wrong
Starter for 10 – when is the two year bright-line test, not a two year bright-line test?
Click here to read this newsletter in a pdf format.
Bob the Builder
As with all legislative changes, the devil is in the detail, and sometimes the detail can produce some nasty surprises. This was definitely the case for one client (of NSA) following the introduction of the “concessionary” rules around debt forgiveness earlier in the year.
Click here to read more
Ministry of Business, Innovation and Employment [NZ] www.business.govt.nz
TIPS ON KIWISAVER AND RETIREMENT PLANNING IF YOU ARE AGED 55+
It’s easy to get caught up in the day-to-day running of your business and forget to think about retiring. These tips can help you plan for a stable future — including advice on KiwiSaver as you get closer to dipping into this nest egg.
It’s easy to get caught up in the day-to-day running of your business and forget to think about retiring. These tips can help you plan for a stable future — including advice on KiwiSaver as you get closer to dipping into this nest egg.
why you need to start planning now
19 October 2017
What will you live on when you stop work, or dial back your hours? Your savings, including KiwiSaver? Proceeds from selling your business? Or will NZ Super be enough?“The newly retired have particular challenges on how to manage their nest egg so it lasts,” says David Boyle from the Commission for Financial Capability.
“While many of us keep working in our businesses — or become consultants — way past the age of 65, sooner or later we’re going to wind down and do all those things we always wanted to. And that takes planning,” Boyle says.
“There are many choices to be made that you don’t get any practise for, and — no pressure — you don’t have the chance to recover if you don’t get it right, because you’ve already sold or shut your business. KiwiSaver can help if you draw down your funds gradually throughout the years.”
Thinking about these choices well in advance — and getting sound advice — means you won’t have to make decisions under pressure or while stressed. It’s a great way to safeguard your financial future.
But focusing on the present, rather than the future, is a common trait among small business owners and sole traders. A recent survey for Xero found that although 20 per cent of all New Zealand small business owners are likely to retire or sell their businesses in the next decade, few have put much thought into an exit or succession plan.
Tidal wave of small businesses set to exit in next 10 years (external link) — New Zealand Herald
Retirement planning for small businesses and sole traders
KiwiSaver risks vs returns
Like all investment funds, you need to effectively manage your KiwiSaver, no matter what your age is. If you’re not already in it, you’re missing out on free money from the government — a top-up of $521 a year if you put in at least $20 a week, or $1,043 a year.
But there are new decisions to make about risks vs returns — and how long you want this nest egg to last — the closer you are to slowing down or stopping work.
It’s important to manage your KiwiSaver account according to how soon you’ll need that money.
KiwiSaver funds can be accessed after the age of 65, or when you’ve been in the scheme for five years, whichever comes later. You can stay in KiwiSaver after that for as long as you choose, with no requirement to withdraw all your savings.
Dial up your savings with KiwiSaver
Get good adviceBoyle recommends discussing your options with your KiwiSaver provider or an independent advisor. “There really is no substitute for good financial advice when you’re planning for your retirement, particularly with how your KiwiSaver funds will support your well-being in those years after you’ve worked so hard.”
The Sorted website is another useful source of tips and information. Sorted is tended by the Commission for Financial Capability, tasked with helping New Zealanders get ahead financially.
Stretching our retirement savings (external link) — Sorted
If you need to check if your KiwiSaver fund is right for you, or if you haven’t chosen one yet, try Sorted’s Fund Finder tool. You can search through funds by risk level, and sort by fees, services and investment returns.
KiwiSaver Fund Finder (external link) — Sorted
Getting financial advice
Think about how much NZ Super pays a week.Will it be enough to sustain your lifestyle? Or is there a gap you need to fill? NZ Super currently pays $390 a week for individuals.
Current NZ Super rates (external link) — Sorted
Put your business planning hat on
Retirement is a milestone for you and for your business. Set aside time to think about what you want your future to be like — and whether you want your business to continue once you step away.
As you approach retirement you’ll need to decide if you want to sell your business, pass it on to family members, or simply close the doors. No matter what you choose, you’ll need to have a plan in place to ensure you don’t lose everything you’ve worked so hard to build and save for.
Use our quick-focus business plan template to reflect on your current position, to set your focus and create a to-do list. It’s important to keep your business plan as a living document — don’t leave it to gather dust on a shelf.
Planning for retirement (external link) — Sorted
10-step quick focus business plan [PDF, 88 KB]
Shut, sell or sucession?
Whichever is right for you and your business, think about what steps you need to take to get ready for a smooth transition. Small businesses without plans in place often fail when their owners retire, get sick or die.
Don’t wait for a health scare or 65th birthday to rush you into an ill-planned decision. The best plans are made years in advance when key people — your deputy or business partner, or any family members — have time to discuss and formalise what will happen.
How to write a business plan
Selling upEven if you close your business rather than sell it as a going concern, think about what will happen to its assets, including intellectual property. You’ll want to get a good price for these.
Whether you operate as a sole trader, partnership or company, you can think about selling at any stage, from before launch to approaching retirement. Potential buyers will want to know about:
Selling your business
SuccessionA solid succession plan is essential if you want your business to carry on successfully after you leave it.
You may want to pass management or ownership to your children or a trusted business partner. Or you might want to retain some ownership but take a back seat on day-to-day management.
Whatever you choose, there’s a lot to consider and you may need expert advice. Steps to take include:
Stepping back from your business
Do you have a succession plan for your business?
We want to provide relevant and useful tools, tips and advice to save you time and money. Your feedback will help us understand whether our site delivers the information you need to succeed.
Why you need to start planning now
What will you live on when you stop work, or dial back your hours? Your savings, including KiwiSaver? Proceeds from selling your business? Or will NZ Super be enough?
“The newly retired have particular challenges on how to manage their nest egg so it lasts,” says David Boyle from the Commission for Financial Capability.
“While many of us keep working in our businesses — or become consultants — way past the age of 65, sooner or later we’re going to wind down and do all those things we always wanted to. And that takes planning,” Boyle says.
“There are many choices to be made that you don’t get any practise for, and — no pressure — you don’t have the chance to recover if you don’t get it right, because you’ve already sold or shut your business. KiwiSaver can help if you draw down your funds gradually throughout the years.”
Thinking about these choices well in advance — and getting sound advice — means you won’t have to make decisions under pressure or while stressed. It’s a great way to safeguard your financial future.
But focusing on the present, rather than the future, is a common trait among small business owners and sole traders. A recent survey for Xero found that although 20 per cent of all New Zealand small business owners are likely to retire or sell their businesses in the next decade, few have put much thought into an exit or succession plan.
Tidal wave of small businesses set to exit in next 10 years (external link) — New Zealand Herald
Retirement planning for small businesses and sole traders
KiwiSaver risks vs returns
Like all investment funds, you need to effectively manage your KiwiSaver, no matter what your age is. If you’re not already in it, you’re missing out on free money from the government — a top-up of $521 a year if you put in at least $20 a week, or $1,043 a year.
But there are new decisions to make about risks vs returns — and how long you want this nest egg to last — the closer you are to slowing down or stopping work.
It’s important to manage your KiwiSaver account according to how soon you’ll need that money.
KiwiSaver funds can be accessed after the age of 65, or when you’ve been in the scheme for five years, whichever comes later. You can stay in KiwiSaver after that for as long as you choose, with no requirement to withdraw all your savings.
Dial up your savings with KiwiSaver
Get good adviceBoyle recommends discussing your options with your KiwiSaver provider or an independent advisor. “There really is no substitute for good financial advice when you’re planning for your retirement, particularly with how your KiwiSaver funds will support your well-being in those years after you’ve worked so hard.”
The Sorted website is another useful source of tips and information. Sorted is tended by the Commission for Financial Capability, tasked with helping New Zealanders get ahead financially.
Stretching our retirement savings (external link) — Sorted
If you need to check if your KiwiSaver fund is right for you, or if you haven’t chosen one yet, try Sorted’s Fund Finder tool. You can search through funds by risk level, and sort by fees, services and investment returns.
KiwiSaver Fund Finder (external link) — Sorted
Getting financial advice
Think about how much NZ Super pays a week.Will it be enough to sustain your lifestyle? Or is there a gap you need to fill? NZ Super currently pays $390 a week for individuals.
Current NZ Super rates (external link) — Sorted
Put your business planning hat on
Retirement is a milestone for you and for your business. Set aside time to think about what you want your future to be like — and whether you want your business to continue once you step away.
As you approach retirement you’ll need to decide if you want to sell your business, pass it on to family members, or simply close the doors. No matter what you choose, you’ll need to have a plan in place to ensure you don’t lose everything you’ve worked so hard to build and save for.
Use our quick-focus business plan template to reflect on your current position, to set your focus and create a to-do list. It’s important to keep your business plan as a living document — don’t leave it to gather dust on a shelf.
Planning for retirement (external link) — Sorted
10-step quick focus business plan [PDF, 88 KB]
Shut, sell or sucession?
Whichever is right for you and your business, think about what steps you need to take to get ready for a smooth transition. Small businesses without plans in place often fail when their owners retire, get sick or die.
Don’t wait for a health scare or 65th birthday to rush you into an ill-planned decision. The best plans are made years in advance when key people — your deputy or business partner, or any family members — have time to discuss and formalise what will happen.
How to write a business plan
Selling upEven if you close your business rather than sell it as a going concern, think about what will happen to its assets, including intellectual property. You’ll want to get a good price for these.
Whether you operate as a sole trader, partnership or company, you can think about selling at any stage, from before launch to approaching retirement. Potential buyers will want to know about:
Selling your business
SuccessionA solid succession plan is essential if you want your business to carry on successfully after you leave it.
You may want to pass management or ownership to your children or a trusted business partner. Or you might want to retain some ownership but take a back seat on day-to-day management.
Whatever you choose, there’s a lot to consider and you may need expert advice. Steps to take include:
Stepping back from your business
Do you have a succession plan for your business?
We want to provide relevant and useful tools, tips and advice to save you time and money. Your feedback will help us understand whether our site delivers the information you need to succeed.
Why you need to start planning now
What will you live on when you stop work, or dial back your hours? Your savings, including KiwiSaver? Proceeds from selling your business? Or will NZ Super be enough?
“The newly retired have particular challenges on how to manage their nest egg so it lasts,” says David Boyle from the Commission for Financial Capability.
“While many of us keep working in our businesses — or become consultants — way past the age of 65, sooner or later we’re going to wind down and do all those things we always wanted to. And that takes planning,” Boyle says.
“There are many choices to be made that you don’t get any practise for, and — no pressure — you don’t have the chance to recover if you don’t get it right, because you’ve already sold or shut your business. KiwiSaver can help if you draw down your funds gradually throughout the years.”
Thinking about these choices well in advance — and getting sound advice — means you won’t have to make decisions under pressure or while stressed. It’s a great way to safeguard your financial future.
But focusing on the present, rather than the future, is a common trait among small business owners and sole traders. A recent survey for Xero found that although 20 per cent of all New Zealand small business owners are likely to retire or sell their businesses in the next decade, few have put much thought into an exit or succession plan.
Tidal wave of small businesses set to exit in next 10 years (external link) — New Zealand Herald
Retirement planning for small businesses and sole traders
KiwiSaver risks vs returns
Like all investment funds, you need to effectively manage your KiwiSaver, no matter what your age is. If you’re not already in it, you’re missing out on free money from the government — a top-up of $521 a year if you put in at least $20 a week, or $1,043 a year.
But there are new decisions to make about risks vs returns — and how long you want this nest egg to last — the closer you are to slowing down or stopping work.
It’s important to manage your KiwiSaver account according to how soon you’ll need that money.
KiwiSaver funds can be accessed after the age of 65, or when you’ve been in the scheme for five years, whichever comes later. You can stay in KiwiSaver after that for as long as you choose, with no requirement to withdraw all your savings.
Dial up your savings with KiwiSaver
Get good adviceBoyle recommends discussing your options with your KiwiSaver provider or an independent advisor. “There really is no substitute for good financial advice when you’re planning for your retirement, particularly with how your KiwiSaver funds will support your well-being in those years after you’ve worked so hard.”
The Sorted website is another useful source of tips and information. Sorted is tended by the Commission for Financial Capability, tasked with helping New Zealanders get ahead financially.
Stretching our retirement savings (external link) — Sorted
If you need to check if your KiwiSaver fund is right for you, or if you haven’t chosen one yet, try Sorted’s Fund Finder tool. You can search through funds by risk level, and sort by fees, services and investment returns.
KiwiSaver Fund Finder (external link) — Sorted
Getting financial advice
Think about how much NZ Super pays a week.Will it be enough to sustain your lifestyle? Or is there a gap you need to fill? NZ Super currently pays $390 a week for individuals.
Current NZ Super rates (external link) — Sorted
Put your business planning hat on
Retirement is a milestone for you and for your business. Set aside time to think about what you want your future to be like — and whether you want your business to continue once you step away.
As you approach retirement you’ll need to decide if you want to sell your business, pass it on to family members, or simply close the doors. No matter what you choose, you’ll need to have a plan in place to ensure you don’t lose everything you’ve worked so hard to build and save for.
Use our quick-focus business plan template to reflect on your current position, to set your focus and create a to-do list. It’s important to keep your business plan as a living document — don’t leave it to gather dust on a shelf.
Planning for retirement (external link) — Sorted
10-step quick focus business plan [PDF, 88 KB]
Shut, sell or sucession?
Whichever is right for you and your business, think about what steps you need to take to get ready for a smooth transition. Small businesses without plans in place often fail when their owners retire, get sick or die.
Don’t wait for a health scare or 65th birthday to rush you into an ill-planned decision. The best plans are made years in advance when key people — your deputy or business partner, or any family members — have time to discuss and formalise what will happen.
How to write a business plan
Selling upEven if you close your business rather than sell it as a going concern, think about what will happen to its assets, including intellectual property. You’ll want to get a good price for these.
Whether you operate as a sole trader, partnership or company, you can think about selling at any stage, from before launch to approaching retirement. Potential buyers will want to know about:
Selling your business
SuccessionA solid succession plan is essential if you want your business to carry on successfully after you leave it.
You may want to pass management or ownership to your children or a trusted business partner. Or you might want to retain some ownership but take a back seat on day-to-day management.
Whatever you choose, there’s a lot to consider and you may need expert advice. Steps to take include:
Stepping back from your business
Do you have a succession plan for your business?
We want to provide relevant and useful tools, tips and advice to save you time and money. Your feedback will help us understand whether our site delivers the information you need to succeed.
What will you live on when you stop work, or dial back your hours? Your savings, including KiwiSaver? Proceeds from selling your business? Or will NZ Super be enough?“The newly retired have particular challenges on how to manage their nest egg so it lasts,” says David Boyle from the Commission for Financial Capability.
“While many of us keep working in our businesses — or become consultants — way past the age of 65, sooner or later we’re going to wind down and do all those things we always wanted to. And that takes planning,” Boyle says.
“There are many choices to be made that you don’t get any practise for, and — no pressure — you don’t have the chance to recover if you don’t get it right, because you’ve already sold or shut your business. KiwiSaver can help if you draw down your funds gradually throughout the years.”
Thinking about these choices well in advance — and getting sound advice — means you won’t have to make decisions under pressure or while stressed. It’s a great way to safeguard your financial future.
But focusing on the present, rather than the future, is a common trait among small business owners and sole traders. A recent survey for Xero found that although 20 per cent of all New Zealand small business owners are likely to retire or sell their businesses in the next decade, few have put much thought into an exit or succession plan.
Tidal wave of small businesses set to exit in next 10 years (external link) — New Zealand Herald
Retirement planning for small businesses and sole traders
KiwiSaver risks vs returns
Like all investment funds, you need to effectively manage your KiwiSaver, no matter what your age is. If you’re not already in it, you’re missing out on free money from the government — a top-up of $521 a year if you put in at least $20 a week, or $1,043 a year.
But there are new decisions to make about risks vs returns — and how long you want this nest egg to last — the closer you are to slowing down or stopping work.
It’s important to manage your KiwiSaver account according to how soon you’ll need that money.
- If you plan on using it within the next decade, lower-risk assets like bonds can be a good choice.
- But if you won’t be dipping into it for at least 10 years, you have more time to ride out the ups and downs of the market. This means growth assets like shares and commercial property — potentially higher returns, but also the risk of bigger losses.
KiwiSaver funds can be accessed after the age of 65, or when you’ve been in the scheme for five years, whichever comes later. You can stay in KiwiSaver after that for as long as you choose, with no requirement to withdraw all your savings.
Dial up your savings with KiwiSaver
Get good adviceBoyle recommends discussing your options with your KiwiSaver provider or an independent advisor. “There really is no substitute for good financial advice when you’re planning for your retirement, particularly with how your KiwiSaver funds will support your well-being in those years after you’ve worked so hard.”
The Sorted website is another useful source of tips and information. Sorted is tended by the Commission for Financial Capability, tasked with helping New Zealanders get ahead financially.
Stretching our retirement savings (external link) — Sorted
If you need to check if your KiwiSaver fund is right for you, or if you haven’t chosen one yet, try Sorted’s Fund Finder tool. You can search through funds by risk level, and sort by fees, services and investment returns.
KiwiSaver Fund Finder (external link) — Sorted
Getting financial advice
Think about how much NZ Super pays a week.Will it be enough to sustain your lifestyle? Or is there a gap you need to fill? NZ Super currently pays $390 a week for individuals.
Current NZ Super rates (external link) — Sorted
Put your business planning hat on
Retirement is a milestone for you and for your business. Set aside time to think about what you want your future to be like — and whether you want your business to continue once you step away.
As you approach retirement you’ll need to decide if you want to sell your business, pass it on to family members, or simply close the doors. No matter what you choose, you’ll need to have a plan in place to ensure you don’t lose everything you’ve worked so hard to build and save for.
Use our quick-focus business plan template to reflect on your current position, to set your focus and create a to-do list. It’s important to keep your business plan as a living document — don’t leave it to gather dust on a shelf.
Planning for retirement (external link) — Sorted
10-step quick focus business plan [PDF, 88 KB]
Shut, sell or sucession?
Whichever is right for you and your business, think about what steps you need to take to get ready for a smooth transition. Small businesses without plans in place often fail when their owners retire, get sick or die.
Don’t wait for a health scare or 65th birthday to rush you into an ill-planned decision. The best plans are made years in advance when key people — your deputy or business partner, or any family members — have time to discuss and formalise what will happen.
How to write a business plan
Selling upEven if you close your business rather than sell it as a going concern, think about what will happen to its assets, including intellectual property. You’ll want to get a good price for these.
Whether you operate as a sole trader, partnership or company, you can think about selling at any stage, from before launch to approaching retirement. Potential buyers will want to know about:
- financial position
- strategic plan
- suppliers or other business relationships
- assets, including intellectual property.
Selling your business
SuccessionA solid succession plan is essential if you want your business to carry on successfully after you leave it.
You may want to pass management or ownership to your children or a trusted business partner. Or you might want to retain some ownership but take a back seat on day-to-day management.
Whatever you choose, there’s a lot to consider and you may need expert advice. Steps to take include:
- Talk to your family — even if they don’t plan to take over the business.
- Set goals.
- Know your assets, including intellectual property.
- Have a timeframe.
- Create and/or review a business plan.
Stepping back from your business
Do you have a succession plan for your business?
We want to provide relevant and useful tools, tips and advice to save you time and money. Your feedback will help us understand whether our site delivers the information you need to succeed.
Why you need to start planning now
What will you live on when you stop work, or dial back your hours? Your savings, including KiwiSaver? Proceeds from selling your business? Or will NZ Super be enough?
“The newly retired have particular challenges on how to manage their nest egg so it lasts,” says David Boyle from the Commission for Financial Capability.
“While many of us keep working in our businesses — or become consultants — way past the age of 65, sooner or later we’re going to wind down and do all those things we always wanted to. And that takes planning,” Boyle says.
“There are many choices to be made that you don’t get any practise for, and — no pressure — you don’t have the chance to recover if you don’t get it right, because you’ve already sold or shut your business. KiwiSaver can help if you draw down your funds gradually throughout the years.”
Thinking about these choices well in advance — and getting sound advice — means you won’t have to make decisions under pressure or while stressed. It’s a great way to safeguard your financial future.
But focusing on the present, rather than the future, is a common trait among small business owners and sole traders. A recent survey for Xero found that although 20 per cent of all New Zealand small business owners are likely to retire or sell their businesses in the next decade, few have put much thought into an exit or succession plan.
Tidal wave of small businesses set to exit in next 10 years (external link) — New Zealand Herald
Retirement planning for small businesses and sole traders
KiwiSaver risks vs returns
Like all investment funds, you need to effectively manage your KiwiSaver, no matter what your age is. If you’re not already in it, you’re missing out on free money from the government — a top-up of $521 a year if you put in at least $20 a week, or $1,043 a year.
But there are new decisions to make about risks vs returns — and how long you want this nest egg to last — the closer you are to slowing down or stopping work.
It’s important to manage your KiwiSaver account according to how soon you’ll need that money.
- If you plan on using it within the next decade, lower-risk assets like bonds can be a good choice.
- But if you won’t be dipping into it for at least 10 years, you have more time to ride out the ups and downs of the market. This means growth assets like shares and commercial property — potentially higher returns, but also the risk of bigger losses.
KiwiSaver funds can be accessed after the age of 65, or when you’ve been in the scheme for five years, whichever comes later. You can stay in KiwiSaver after that for as long as you choose, with no requirement to withdraw all your savings.
Dial up your savings with KiwiSaver
Get good adviceBoyle recommends discussing your options with your KiwiSaver provider or an independent advisor. “There really is no substitute for good financial advice when you’re planning for your retirement, particularly with how your KiwiSaver funds will support your well-being in those years after you’ve worked so hard.”
The Sorted website is another useful source of tips and information. Sorted is tended by the Commission for Financial Capability, tasked with helping New Zealanders get ahead financially.
Stretching our retirement savings (external link) — Sorted
If you need to check if your KiwiSaver fund is right for you, or if you haven’t chosen one yet, try Sorted’s Fund Finder tool. You can search through funds by risk level, and sort by fees, services and investment returns.
KiwiSaver Fund Finder (external link) — Sorted
Getting financial advice
Think about how much NZ Super pays a week.Will it be enough to sustain your lifestyle? Or is there a gap you need to fill? NZ Super currently pays $390 a week for individuals.
Current NZ Super rates (external link) — Sorted
Put your business planning hat on
Retirement is a milestone for you and for your business. Set aside time to think about what you want your future to be like — and whether you want your business to continue once you step away.
As you approach retirement you’ll need to decide if you want to sell your business, pass it on to family members, or simply close the doors. No matter what you choose, you’ll need to have a plan in place to ensure you don’t lose everything you’ve worked so hard to build and save for.
Use our quick-focus business plan template to reflect on your current position, to set your focus and create a to-do list. It’s important to keep your business plan as a living document — don’t leave it to gather dust on a shelf.
Planning for retirement (external link) — Sorted
10-step quick focus business plan [PDF, 88 KB]
Shut, sell or sucession?
Whichever is right for you and your business, think about what steps you need to take to get ready for a smooth transition. Small businesses without plans in place often fail when their owners retire, get sick or die.
Don’t wait for a health scare or 65th birthday to rush you into an ill-planned decision. The best plans are made years in advance when key people — your deputy or business partner, or any family members — have time to discuss and formalise what will happen.
How to write a business plan
Selling upEven if you close your business rather than sell it as a going concern, think about what will happen to its assets, including intellectual property. You’ll want to get a good price for these.
Whether you operate as a sole trader, partnership or company, you can think about selling at any stage, from before launch to approaching retirement. Potential buyers will want to know about:
- financial position
- strategic plan
- suppliers or other business relationships
- assets, including intellectual property.
Selling your business
SuccessionA solid succession plan is essential if you want your business to carry on successfully after you leave it.
You may want to pass management or ownership to your children or a trusted business partner. Or you might want to retain some ownership but take a back seat on day-to-day management.
Whatever you choose, there’s a lot to consider and you may need expert advice. Steps to take include:
- Talk to your family — even if they don’t plan to take over the business.
- Set goals.
- Know your assets, including intellectual property.
- Have a timeframe.
- Create and/or review a business plan.
Stepping back from your business
Do you have a succession plan for your business?
We want to provide relevant and useful tools, tips and advice to save you time and money. Your feedback will help us understand whether our site delivers the information you need to succeed.
Why you need to start planning now
What will you live on when you stop work, or dial back your hours? Your savings, including KiwiSaver? Proceeds from selling your business? Or will NZ Super be enough?
“The newly retired have particular challenges on how to manage their nest egg so it lasts,” says David Boyle from the Commission for Financial Capability.
“While many of us keep working in our businesses — or become consultants — way past the age of 65, sooner or later we’re going to wind down and do all those things we always wanted to. And that takes planning,” Boyle says.
“There are many choices to be made that you don’t get any practise for, and — no pressure — you don’t have the chance to recover if you don’t get it right, because you’ve already sold or shut your business. KiwiSaver can help if you draw down your funds gradually throughout the years.”
Thinking about these choices well in advance — and getting sound advice — means you won’t have to make decisions under pressure or while stressed. It’s a great way to safeguard your financial future.
But focusing on the present, rather than the future, is a common trait among small business owners and sole traders. A recent survey for Xero found that although 20 per cent of all New Zealand small business owners are likely to retire or sell their businesses in the next decade, few have put much thought into an exit or succession plan.
Tidal wave of small businesses set to exit in next 10 years (external link) — New Zealand Herald
Retirement planning for small businesses and sole traders
KiwiSaver risks vs returns
Like all investment funds, you need to effectively manage your KiwiSaver, no matter what your age is. If you’re not already in it, you’re missing out on free money from the government — a top-up of $521 a year if you put in at least $20 a week, or $1,043 a year.
But there are new decisions to make about risks vs returns — and how long you want this nest egg to last — the closer you are to slowing down or stopping work.
It’s important to manage your KiwiSaver account according to how soon you’ll need that money.
- If you plan on using it within the next decade, lower-risk assets like bonds can be a good choice.
- But if you won’t be dipping into it for at least 10 years, you have more time to ride out the ups and downs of the market. This means growth assets like shares and commercial property — potentially higher returns, but also the risk of bigger losses.
KiwiSaver funds can be accessed after the age of 65, or when you’ve been in the scheme for five years, whichever comes later. You can stay in KiwiSaver after that for as long as you choose, with no requirement to withdraw all your savings.
Dial up your savings with KiwiSaver
Get good adviceBoyle recommends discussing your options with your KiwiSaver provider or an independent advisor. “There really is no substitute for good financial advice when you’re planning for your retirement, particularly with how your KiwiSaver funds will support your well-being in those years after you’ve worked so hard.”
The Sorted website is another useful source of tips and information. Sorted is tended by the Commission for Financial Capability, tasked with helping New Zealanders get ahead financially.
Stretching our retirement savings (external link) — Sorted
If you need to check if your KiwiSaver fund is right for you, or if you haven’t chosen one yet, try Sorted’s Fund Finder tool. You can search through funds by risk level, and sort by fees, services and investment returns.
KiwiSaver Fund Finder (external link) — Sorted
Getting financial advice
Think about how much NZ Super pays a week.Will it be enough to sustain your lifestyle? Or is there a gap you need to fill? NZ Super currently pays $390 a week for individuals.
Current NZ Super rates (external link) — Sorted
Put your business planning hat on
Retirement is a milestone for you and for your business. Set aside time to think about what you want your future to be like — and whether you want your business to continue once you step away.
As you approach retirement you’ll need to decide if you want to sell your business, pass it on to family members, or simply close the doors. No matter what you choose, you’ll need to have a plan in place to ensure you don’t lose everything you’ve worked so hard to build and save for.
Use our quick-focus business plan template to reflect on your current position, to set your focus and create a to-do list. It’s important to keep your business plan as a living document — don’t leave it to gather dust on a shelf.
Planning for retirement (external link) — Sorted
10-step quick focus business plan [PDF, 88 KB]
Shut, sell or sucession?
Whichever is right for you and your business, think about what steps you need to take to get ready for a smooth transition. Small businesses without plans in place often fail when their owners retire, get sick or die.
Don’t wait for a health scare or 65th birthday to rush you into an ill-planned decision. The best plans are made years in advance when key people — your deputy or business partner, or any family members — have time to discuss and formalise what will happen.
How to write a business plan
Selling upEven if you close your business rather than sell it as a going concern, think about what will happen to its assets, including intellectual property. You’ll want to get a good price for these.
Whether you operate as a sole trader, partnership or company, you can think about selling at any stage, from before launch to approaching retirement. Potential buyers will want to know about:
- financial position
- strategic plan
- suppliers or other business relationships
- assets, including intellectual property.
Selling your business
SuccessionA solid succession plan is essential if you want your business to carry on successfully after you leave it.
You may want to pass management or ownership to your children or a trusted business partner. Or you might want to retain some ownership but take a back seat on day-to-day management.
Whatever you choose, there’s a lot to consider and you may need expert advice. Steps to take include:
- Talk to your family — even if they don’t plan to take over the business.
- Set goals.
- Know your assets, including intellectual property.
- Have a timeframe.
- Create and/or review a business plan.
Stepping back from your business
Do you have a succession plan for your business?
We want to provide relevant and useful tools, tips and advice to save you time and money. Your feedback will help us understand whether our site delivers the information you need to succeed.
IRD's make business easier www.business.govt.nz
contracting - hidden costs and expenses
Broken income: If you’re contracting, you may have to get used to unplanned gaps between the end of one contract and the start of another. Ideally put aside three months’ income in case you don’t have continuous work.
Sick days: It’s a good idea to factor in not being able to work five days a year when you’re too sick to work. Include this in your hourly rate.
Public holidays: When you’re a contractor you may not be able to — or want to — work on public holidays. In New Zealand we have 10 national holidays, eg Easter and Labour Day, and one holiday per province, eg Hawke’s Bay anniversary day. Budget for these as well.
Annual leave: Some contractors budget to use gaps between contracts to take a holiday. If you don’t save a buffer you may find you can’t relax or go away between jobs.
Expenses: You may need to buy or replace equipment like a computer, tools or safety gear. You can claim these back when you do your taxes.
Insurance: Ask yourself what could go wrong at work, and think about types of insurance that might cover you for these risks. You might also want to protect your assets, vehicle or buildings against loss or damage. Liability insurance is useful if you do work for other organisations — it covers you if that organisation sues you or an employee for damaging their property or reputation.
KiwiSaver: It’s a good idea to plan for your retirement. As a contractor you have to set up and pay into KiwiSaver yourself. If you pay in at least $20 a week, or $1,043 a year, you’ll get a $521 top-up from the government. Click on the Button for more...
Sick days: It’s a good idea to factor in not being able to work five days a year when you’re too sick to work. Include this in your hourly rate.
Public holidays: When you’re a contractor you may not be able to — or want to — work on public holidays. In New Zealand we have 10 national holidays, eg Easter and Labour Day, and one holiday per province, eg Hawke’s Bay anniversary day. Budget for these as well.
Annual leave: Some contractors budget to use gaps between contracts to take a holiday. If you don’t save a buffer you may find you can’t relax or go away between jobs.
Expenses: You may need to buy or replace equipment like a computer, tools or safety gear. You can claim these back when you do your taxes.
Insurance: Ask yourself what could go wrong at work, and think about types of insurance that might cover you for these risks. You might also want to protect your assets, vehicle or buildings against loss or damage. Liability insurance is useful if you do work for other organisations — it covers you if that organisation sues you or an employee for damaging their property or reputation.
KiwiSaver: It’s a good idea to plan for your retirement. As a contractor you have to set up and pay into KiwiSaver yourself. If you pay in at least $20 a week, or $1,043 a year, you’ll get a $521 top-up from the government. Click on the Button for more...
paying lump sum bonuses: get the tax right
Lump sum payments include:
How to motivate your staff
Calculating PAYE on lump sumsFollow these steps to work out the PAYE rate to use for a lump sum payment:
For more information - click on the button below....
Taxing lump sum or 'extra pay' payments (external link)
Handling bonuses and benefits
- annual or special bonuses
- cashed-in annual leave
- back pay
- retirement or redundancy payments.
How to motivate your staff
Calculating PAYE on lump sumsFollow these steps to work out the PAYE rate to use for a lump sum payment:
- Work out what your employee has earned (before PAYE) over the past four weeks.
- Multiply this figure by 13.
- Add the lump sum payment to the figure in step two.
- Use the table below to work out what income bracket your employee is in.
- Deduct PAYE from the lump sum payment at the rate shown in the right-hand column for that income bracket.
For more information - click on the button below....
Taxing lump sum or 'extra pay' payments (external link)
Handling bonuses and benefits
landlords: what to put in tenancy agreements
Put it in writingA written tenancy agreement is a great foundation for a stable tenancy — and it’s now a legal requirement. It sets out the rights and responsibilities of both landlord and tenant, reduces the risk of future misunderstandings, and keeps you on the right side of the law.
All new tenancies must have a written agreement —signed by both landlord and tenants — setting out important details, including:
If you add any clauses or conditions, make sure these are in line with tenancy law. It’s fine to say “no pets” or to write down the maximum number of people who can live at the property. But you can’t insist the tenant has the carpets commercially cleaned when they move out.
The easiest way to get your agreement right is to use the template on the Tenancy Services website. To continue reading click on the button below...
Tenancy agreement template (external link) — Tenancy Services
All new tenancies must have a written agreement —signed by both landlord and tenants — setting out important details, including:
- full names and contact addresses
- address of the rental property
- date tenancy begins — and ends, if it’s for a fixed term
- bond to be paid, if any
- rent amount and frequency of payments
- any chattels, eg furniture or appliances, provided by the landlord
- information about insulation in the ceilings, floors, or walls.
If you add any clauses or conditions, make sure these are in line with tenancy law. It’s fine to say “no pets” or to write down the maximum number of people who can live at the property. But you can’t insist the tenant has the carpets commercially cleaned when they move out.
The easiest way to get your agreement right is to use the template on the Tenancy Services website. To continue reading click on the button below...
Tenancy agreement template (external link) — Tenancy Services
Xero's moves get
the accounting crowd excited
- NZ Herald
Click on the button above to watch Rod Drury talk about the new and exciting initiatives announced at Xero's Annual Conference.
Budget 2017
Hi Mark
Finance Minister Steven Joyce delivered his first Government Budget today. This year's Budget contains tax changes in two areas - a package of tax cuts for individuals and families and proposed changes to improve the tax treatment of black hole and feasibility expenditure for businesses. More information, particularly in relation to the proposed changes to feasibility expenditure, will follow in a Tax Tips Alert due out shortly.
Black hole and feasibility expenditure
The Government’s 2017 Budget includes significant proposals to amend the tax treatment of feasibility expenditure and black hole expenditure. Details of these proposals are included in the Government discussion document Black hole and feasibility expenditure published today (the Discussion Document).
With respect to feasibility expenditure, the Budget proposes to increase the availability of deductions for taxpayers incurring such expenditure (essentially narrowing the effect of the Supreme Court’s decision in Trustpower Ltd v Commissioner of Inland Revenue [2016] NZSC 91). In broad terms, the proposals would allow a deduction for feasibility expenditure that is expensed for accounting purposes under IFRS (including any feasibility expenditure on an asset that is capitalised but subsequently abandoned and impaired for accounting purposes).
The proposals would also introduce a new deduction for certain 'black hole' expenditure where expenditure is incurred in relation to an asset that would be depreciable if completed, but where that asset is abandoned before completion. Under current law, this expenditure would not be deductible on the basis that it is capital in nature, and would not give rise to depreciation deductions on the basis that the relevant asset is never completed.
The proposals would allow a deduction for expenditure that would have been included as part of the cost of the depreciable asset, with this deduction being allowed when the asset is abandoned.
The Discussion Document does not specify whether any changes would be retrospective or only applied prospectively and specifically requests submissions on this point.
The Discussion Document describes the current treatment of feasibility expenditure and black hole expenditure as an economic distortion that is an impediment to productivity growth and therefore damaging to the New Zealand economy.
We agree and are broadly supportive of the proposed changes. Given the recognition that the current treatment is harmful to the New Zealand economy, we consider that the proposals should be retrospective in their application.
Submissions are due on 6 July 2017.
Family income package
In addition, the Budget contains a package of tax cuts for individuals and families. These include:
Kind regards,
PwC NZ Tax Tips Team
© 2017 PwC New Zealand. All rights reserved. "PwC" refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
Finance Minister Steven Joyce delivered his first Government Budget today. This year's Budget contains tax changes in two areas - a package of tax cuts for individuals and families and proposed changes to improve the tax treatment of black hole and feasibility expenditure for businesses. More information, particularly in relation to the proposed changes to feasibility expenditure, will follow in a Tax Tips Alert due out shortly.
Black hole and feasibility expenditure
The Government’s 2017 Budget includes significant proposals to amend the tax treatment of feasibility expenditure and black hole expenditure. Details of these proposals are included in the Government discussion document Black hole and feasibility expenditure published today (the Discussion Document).
With respect to feasibility expenditure, the Budget proposes to increase the availability of deductions for taxpayers incurring such expenditure (essentially narrowing the effect of the Supreme Court’s decision in Trustpower Ltd v Commissioner of Inland Revenue [2016] NZSC 91). In broad terms, the proposals would allow a deduction for feasibility expenditure that is expensed for accounting purposes under IFRS (including any feasibility expenditure on an asset that is capitalised but subsequently abandoned and impaired for accounting purposes).
The proposals would also introduce a new deduction for certain 'black hole' expenditure where expenditure is incurred in relation to an asset that would be depreciable if completed, but where that asset is abandoned before completion. Under current law, this expenditure would not be deductible on the basis that it is capital in nature, and would not give rise to depreciation deductions on the basis that the relevant asset is never completed.
The proposals would allow a deduction for expenditure that would have been included as part of the cost of the depreciable asset, with this deduction being allowed when the asset is abandoned.
The Discussion Document does not specify whether any changes would be retrospective or only applied prospectively and specifically requests submissions on this point.
The Discussion Document describes the current treatment of feasibility expenditure and black hole expenditure as an economic distortion that is an impediment to productivity growth and therefore damaging to the New Zealand economy.
We agree and are broadly supportive of the proposed changes. Given the recognition that the current treatment is harmful to the New Zealand economy, we consider that the proposals should be retrospective in their application.
Submissions are due on 6 July 2017.
Family income package
In addition, the Budget contains a package of tax cuts for individuals and families. These include:
- Increasing the $14,000 income tax threshold to $22,000 and the $48,000 tax threshold to $52,000. This should provide a tax cut of $11 per week to people earning $22,000 or more, rising to $20 per week for people earning $52,000 or more.
- Discontinuing the Independent Earner Tax Credit (although those currently claiming this credit will be fully compensated through the tax threshold adjustments described above).
- Increasing Family Tax Credits rates for first children under 16 by $9 a week, and for each subsequent child under 16 by between $18 and $27 a week. The package will also increase the current abatement rate to 25% and reduce the abatement threshold to $35,000.
- Increasing the maximum amounts payable to households under the Accommodation Supplement.
- Increasing the weekly payments for the Accommodation Benefit for eligible Student Allowance recipients.
Kind regards,
PwC NZ Tax Tips Team
© 2017 PwC New Zealand. All rights reserved. "PwC" refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
Beany - Sue de Bievre - what the budget means for business
What's in the budget for business?
Beany CEO, Sue de Bievre, has shared her views on what the budget means for business...
Some highlights;
Overall this budget does deliver some great spend on infrastructure, innovation and the core public sector areas with some nice little tax cuts snuck in as changes to the tax brackets.
It lacks, as the National Party often does, any vision for the future of New Zealand and any real movement from the status quo of farming, logging, mining, and tourism – would have been fantastic to see some real innovative thinking about our future as smart economy, taking on the world in the digital age.
Oh, and maybe, stop giving away our valuable water resource whilst at the same time propping up the farmers with some money for irrigation!
What do you think? Head here to read the full blog and email Sue your thoughts.
Changes to Parental Leave
From 1 June, parents who want to get parental leave payments can choose to first use other types of paid leave they’re entitled to, eg:· annual leave· alternative days· special leave· time off in lieu.They can choose to start their 18-week parental leave payment period once they have taken other types of paid leave — even if this is after the child’s arrival.
Previously the parental leave payment period couldn’t start later than the child’s arrival.
Any eligible working parent can get parental leave payments if they are the permanent primary carer of a child under six.
This applies to employees, including those with non-standard working arrangements such as casual, seasonal, temporary and fixed-term employees, and self-employed people.
Here's a link to a great tool to help you calculate parental leave eligibility, and as always - let us know if you have any queries.
For more visit the website
Beany CEO, Sue de Bievre, has shared her views on what the budget means for business...
Some highlights;
- Tax bracket changes mean more money in the pocket for most. The bottom tax bracket will be increased from $14,000 to $22,000 delivering an extra $11 per week and the $48,000 to $52,000 delivering an extra $20 a week. An average couple will be $41 better off a week.
- Working for Families Tax Credits has an $2 billion increase targeting middle-income families and the accommodation supplement has been increased to reflect increases in rental costs.
- Independent earner tax credit has been scrapped so $10 per week lost to people earning between $24,000-$48,000.
Overall this budget does deliver some great spend on infrastructure, innovation and the core public sector areas with some nice little tax cuts snuck in as changes to the tax brackets.
It lacks, as the National Party often does, any vision for the future of New Zealand and any real movement from the status quo of farming, logging, mining, and tourism – would have been fantastic to see some real innovative thinking about our future as smart economy, taking on the world in the digital age.
Oh, and maybe, stop giving away our valuable water resource whilst at the same time propping up the farmers with some money for irrigation!
What do you think? Head here to read the full blog and email Sue your thoughts.
Changes to Parental Leave
From 1 June, parents who want to get parental leave payments can choose to first use other types of paid leave they’re entitled to, eg:· annual leave· alternative days· special leave· time off in lieu.They can choose to start their 18-week parental leave payment period once they have taken other types of paid leave — even if this is after the child’s arrival.
Previously the parental leave payment period couldn’t start later than the child’s arrival.
Any eligible working parent can get parental leave payments if they are the permanent primary carer of a child under six.
This applies to employees, including those with non-standard working arrangements such as casual, seasonal, temporary and fixed-term employees, and self-employed people.
Here's a link to a great tool to help you calculate parental leave eligibility, and as always - let us know if you have any queries.
For more visit the website
Budget Report - CCH, EY and Bell gully
Bean There, done that: the changing role of accountants
Posted by Colin Timmis - Xero
For a long time, the popular perception of accountants has been that they’re number-crunching, bean-counting robots – there to perform a function and undertake a task, not to provide insights or counsel to the business. Their duties are process-based: they review, rather than analyse; they compute rather than contemplate; and because of these tendencies, they are essentially interchangeable.
This perception isn’t accurate: a qualified, experienced, strategically-minded accountant can be a great asset to a business. But the true purpose of their role was long ago buried beneath repetitive, transactional work.
Luckily for them and the businesses they serve, that’s going to change.
The role of the accountant undergoing changePartly this is due to a growing belief among accountants that their role should mean more than mere compliance. Research from Xero demonstrates that some 42% of South African accountants think they’ll need management consultancy skills to be successful by 2025. Additionally 35% think the same of business management skills, and 28% believe they should act as strategists for growth. In their minds, their role should be far more dynamic than it presently is.
It’s worth mentioning that many in the SME community agree: some 65% of SME owners treat accountants as trusted business advisors, and 56% have asked them for advice on non-financial matters. Nobody wants to pay an accountant for what often amounts to manual work.
Technology and accountingBoth accountants and business owners are right about the changing role of accountants– and technology will realise this vision. Accountants recognise this. The research also indicates that 64% of those surveyed rank being able to offer a broader service as the most important benefit of technology in finance. Some 59% think that having more time to offer consultancy is the chief advantage of these new tools.
It’s easy to see why. Technology can automate some of the more frustrating aspects of daily life as an accountant. Things like reviewing bookkeeper data, poring over receipts, and completing mundane, process-based work will be replaced by the mere press of a button. This frees up time for the accountant to focus on what ought to be the meat of their job; strategy – financial and otherwise.
Indeed, technology may completely change working patterns for accountants. When these professionals don’t have to scan invoices manually, or when they can find and recode transaction lines easily using software, they can effectively provide services on-demand – at once limiting the time they spend on their clients and maximising the way they use it.
The accountants of the future (and the future of accounting)Most importantly, accountants are well-placed to deliver these benefits. Some 73% believe their firm can already provide management consultancy services. A further 47% believe they already act as strategists for growth. Couple this capability with their willingness to upskill and increase their value to their clients, and these professionals can be a real asset to South Africa’s business community.
It falls on these professionals and the businesses they serve to bring this broader, more versatile idea of their capabilities to fruition. If accountants become advisors to their clients instead of bean counters, both will benefit.
For more insight into the future of the South African accounting sector, download the Xero State of Accounts report now.
Popular this weekHow we’ve grown to help our one million subscribers every day
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How this business went from dark days to being almost debt-free
by Iris Yau | 30 March 2017
How Xero helped this bookkeeper make his move to the woods
by Alexandra Heber | 30 March 2017
3 ways you can give your firm a fresh start in 2017
by Sarah Richards | 17 December 2016
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by Keri Gohman | 11 May 2017
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by Rachael Powell | 9 February 2017
For a long time, the popular perception of accountants has been that they’re number-crunching, bean-counting robots – there to perform a function and undertake a task, not to provide insights or counsel to the business. Their duties are process-based: they review, rather than analyse; they compute rather than contemplate; and because of these tendencies, they are essentially interchangeable.
This perception isn’t accurate: a qualified, experienced, strategically-minded accountant can be a great asset to a business. But the true purpose of their role was long ago buried beneath repetitive, transactional work.
Luckily for them and the businesses they serve, that’s going to change.
The role of the accountant undergoing changePartly this is due to a growing belief among accountants that their role should mean more than mere compliance. Research from Xero demonstrates that some 42% of South African accountants think they’ll need management consultancy skills to be successful by 2025. Additionally 35% think the same of business management skills, and 28% believe they should act as strategists for growth. In their minds, their role should be far more dynamic than it presently is.
It’s worth mentioning that many in the SME community agree: some 65% of SME owners treat accountants as trusted business advisors, and 56% have asked them for advice on non-financial matters. Nobody wants to pay an accountant for what often amounts to manual work.
Technology and accountingBoth accountants and business owners are right about the changing role of accountants– and technology will realise this vision. Accountants recognise this. The research also indicates that 64% of those surveyed rank being able to offer a broader service as the most important benefit of technology in finance. Some 59% think that having more time to offer consultancy is the chief advantage of these new tools.
It’s easy to see why. Technology can automate some of the more frustrating aspects of daily life as an accountant. Things like reviewing bookkeeper data, poring over receipts, and completing mundane, process-based work will be replaced by the mere press of a button. This frees up time for the accountant to focus on what ought to be the meat of their job; strategy – financial and otherwise.
Indeed, technology may completely change working patterns for accountants. When these professionals don’t have to scan invoices manually, or when they can find and recode transaction lines easily using software, they can effectively provide services on-demand – at once limiting the time they spend on their clients and maximising the way they use it.
The accountants of the future (and the future of accounting)Most importantly, accountants are well-placed to deliver these benefits. Some 73% believe their firm can already provide management consultancy services. A further 47% believe they already act as strategists for growth. Couple this capability with their willingness to upskill and increase their value to their clients, and these professionals can be a real asset to South Africa’s business community.
It falls on these professionals and the businesses they serve to bring this broader, more versatile idea of their capabilities to fruition. If accountants become advisors to their clients instead of bean counters, both will benefit.
For more insight into the future of the South African accounting sector, download the Xero State of Accounts report now.
Popular this weekHow we’ve grown to help our one million subscribers every day
by Murielle Baker | 30 March 2017
How this business went from dark days to being almost debt-free
by Iris Yau | 30 March 2017
How Xero helped this bookkeeper make his move to the woods
by Alexandra Heber | 30 March 2017
3 ways you can give your firm a fresh start in 2017
by Sarah Richards | 17 December 2016
Xero and Capital One partner to help rewire the small business economy
by Keri Gohman | 11 May 2017
Change the way you work with reports
by Mark Blundell | 26 July 2016
Xero Wins Linkedin’s ‘Bring Your Employer Brand to Life’
by Rachael Powell | 9 February 2017
Remember to use help in - xero - for beautiful accounting videos
Today's Tip for Xero -
Bank Rules can save you lots of time when coding your bank transactions especially for automatic payments, look at the easy to follow "help". March 2017
Bank Rules can save you lots of time when coding your bank transactions especially for automatic payments, look at the easy to follow "help". March 2017
The NZ Economy
Click the link below to read the full story by BNZ's Tony Alexander, and if you'd like to subscribe to this newsletter, click the second link.
Growth, Dairying, and Baby Boomers
We start this week’s Overview with a very quick overview of the state of the NZ economy. We then answer the question of how much the economy suffered as a result of the collapse in dairy prices from the start of 2014. After that we address the misplaced argument that Baby Boomers are to blame for high house prices. Those calling this group greedy fail to grasp the long-term factors driving house prices higher which we have highlighted here in fits and starts since 2008. On page five we offer a list of suggestions for living as they did if you want to save a deposit.
You will find the Weekly Overview at this link.
http://tonyalexander.co.nz/wp-content/uploads/2017/03/WO-March-2-2017.pdf
New subscribers can sign up here.
https://feedback.bnz.co.nz/mail/link/eX2nTug5D2MtTjn6ZhBMzw
We start this week’s Overview with a very quick overview of the state of the NZ economy. We then answer the question of how much the economy suffered as a result of the collapse in dairy prices from the start of 2014. After that we address the misplaced argument that Baby Boomers are to blame for high house prices. Those calling this group greedy fail to grasp the long-term factors driving house prices higher which we have highlighted here in fits and starts since 2008. On page five we offer a list of suggestions for living as they did if you want to save a deposit.
You will find the Weekly Overview at this link.
http://tonyalexander.co.nz/wp-content/uploads/2017/03/WO-March-2-2017.pdf
New subscribers can sign up here.
https://feedback.bnz.co.nz/mail/link/eX2nTug5D2MtTjn6ZhBMzw