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How many beers can I drink on the company?

We’ve been asked this question a few times in the last week; so here goes: The short answer: If beers are consumed away from home, or outside of normal working hours and have a connection to continuing on the business (to earn income) they may be 50% deductible for both GST and income tax purposes. The more technical answer: For a business to claim an expense, that expenditure must be used to earn income, or to carry on a business for the purpose to earn income. Unless you are a beer...

Make it easier with Xero Payroll!

Over June we set-up a number of clients on Xero Payroll. Below we have shared how Xero Payroll can benefit your business and take the hassle out of your payroll.Compliance with NZ Payroll legislationPAYE, ACC, KiwiSaver and student loan calculations are automatically looked after for you and with the ever-increasing complexity of NZ Payroll legislation, it’s imperative to ensure compliance.  Xero Payroll can assist with this hassle. Integration with the IRDAll the reports required by Inla...

Coaches Corner With Jane Evans

This week I will be competing at the World Masters Games as a rower in eight events over five days, racing everything from the women's single scull to a mixed eights race with the only boat I'm not competing in being a pair, a boat I'm yet to master.I'm a relative newcomer to the sport having taken it up three and a half years ago and the benefits of the sport have been enormous in my life. I'm fitter and stronger than I have ever been and in more than just the physical sense.I will enjoy the re...

Why you have tax to pay, but may have no cash…

The difference between cash and profit… an example.Just because business profits are reinvested back into the business, does not change that it has been earned in the first place.For example, a business buys stock to sell to its customers for $300. It sells that stock to its customers for $1,000; a profit of $700 is made and tax at 30% is $210.Sales - $1000Cost of Goods Sold - $300Profit - $700Tax on profit (30%) - $210The business has $1k and then buys more stock. The stock purchase...

The ultimate guide to buying a house with no money… and how to do it!

You may have heard of people buying houses with no money. If you wonder how they do this, have a read of our blog. Below, we outline how the principle of how it is possible to buy a house with no money. While this answers the question of how it is possible, it may or may not necessarily be the right thing to do. All decisions come with potential risks and benefits, and we always recommend you talk with your advisers before making any. To keep things simple, we have not included how potential ren...

6 Things I learnt from Ironman - Tim Doyle

An Ironman is a 3.8km Swim, 180km Bike Ride and 42.2km Marathon, and the New Zealand Ironman was held on March 4th 2017 in Taupo. I finished in 11 hours 42 minutes and 53 seconds.1.  1. Consistency is UndervaluedIn October 2016 I had ran for 90 minutes, and my longest bike ride was 90 mins. Six months later in February with small increases each week I ran for 3 hours non-stop (35km) and had rode for 6 hours (180km) three times. This was achieved through being consistent ...

Provisional Tax - What does it mean?

Last week we covered terminal tax, have a quick recap and understand the difference between provisional tax and terminal tax. What is provisional tax?Provisional tax is income tax that is paid in advance to the IRD in instalments during the tax year. Who must pay it?If last year's tax return shows there is more than $2,500 of residual income tax to pay, provisional tax must be paid for the following tax year. This usually happens when income is earned without having tax deducted during the ...

Terminal Tax Payment due on 7th April - what does it mean?

Why do you have tax to pay on 7th April 2017 Before we get stuck in, business and self- employed people pay provisional tax which is tax paid in advance for the current or next financial year. We will explain this more in next week's blog. What is terminal tax? Terminal tax is the difference between what tax has been paid during the year (as provisional tax, PAYE or withholding tax), and what is actually owed. If too much was paid (eg. as provisional tax) a tax refund is du...

8 Tips to Prepare for the End of Financial Year

If you have a 31 March balance date, the end of the financial year is rapidly approaching. Have a read of our top tips below to prepare for the end of financial year. Review the Year, and Plan Ahead Have you achieved what you wanted to? Have you planned and set goals for the next year? While some of these thoughts and discussion may take place once the financial statements are completed to understand the overall profitability and performance of the business, start thinking about these ...

Coaches Corner With Jane Evans

One of my favorite sayings has long been that by Napoleon Hill, "whatever the mind can conceive and believe, the body can achieve" which is often remembered as I'm riding up a memorable hill on my mountain bike. This quote starts the book I am currently reading "The Answer" by Allan and Barbara Pease.Napoleon Hill's saying is supported by medical science and is the secret of the Reticular Activating System (RAS) which is located in the brain stem of the mammalian brain, so most humans have one. ...

Pay Less Tax - Part 2

As accountants, one of our roles is to create tax efficiency for business owners. We do this, by ensuring a business claims all entitled expenses to reduce profit and therefore pays less tax. One expense that may reduce taxable profit is a home office expense claim. Home office expenses are claimable when a business owner uses part of their home for their business. This could be as an office (either an actual office, or a spare bedroom used as an office), or if the actual business is ran from ho...

Pay Less Tax - Part 1

Table 0.1 – How AgBiz Accountants could save you more than $12k in tax (an extra 10%) EntityProfitTaxTax Savings Individual$120,000$30,520$9,080 Company$120,000$33,600$6,000 Trust$120,000$39,600$- Evans Doyle Way$120,000$27,580$12,050 Everyone pays tax on their income. The rate of tax you pay depends on how much income you earn (for an individual), or what type of business structure you operate (for businesses). This will help you understand how the different rates of tax are ca...

The MYTH Of Tax Deductions

Did you know that a $70 lunch may only give a tax deduction of $6.13? How often have you heard a business owner say "It's ok, it's a business expense and I can claim it for tax"? Do they really understand that a $70 lunch or dinner may only provide a tax deduction of $6.13? Would you spend $70 to only get $6.13 back? Our take home messages are as follows: The tax deduction on any business expenditure is only a percentage of that expenditure, not the full amount of the expenditure.Don't allow 'ta...

Tax Tips - GST Insights. Part Two

So what are the different methods for doing my GST? Following on our GST theme, this blog will explain the difference between 'GST basis' and outline the advantages and disadvantages of each. In a nutshell, you can pay GST when you receive the cash from your customer, or when you issue an invoice to your customer. Either option can be beneficial to your business. You have three options if your turnover is under $2 million: payments basisinvoice basishybrid basis Or two options if your turnover i...

Tax Tips - GST Insights. Part One

Do I need to register for GST? One of the most popular questions often asked from people starting a business is, 'do I need to register for GST?' This article will answer that question. GST is a tax on consumption, on goods and services supplied in New Zealand. This is different from income tax which is a tax on profit. Who must register for GST? You must register for GST if you carry out a taxable activity and: your turnover was $60,000 or more in the last 12 months or will be $60,000 or m...

The Difference Between Income Tax and GST

What is the difference between GST and Income Tax? Income tax is a tax on profit while GST is a tax on consumption. This article will explain the differences and basic compliance requirements of each. 1. Income Tax Everyone who earns taxable income in New Zealand pays income tax. For employees, the employer deducts PAYE and pays the income tax to the IRD on the employee's behalf, while the employee receives a net wage or salary. Business owners must file a tax return each year to the IRD declari...

5 key characteristics which define the entrepreneurial spirit of successful small businesses!

According to a recent survey of 2000 businesses in the US and UK by Xero, here are the 5 key characteristics which define the entrepreneurial spirit of successful small businesses… 1) It's not all work work work! They don't work around the clock. They make time to spend with those important to them and to enjoy hobbies. 2) They don't pretend they have all the answers!Always be learning and if you don't have the answers, it's ok to ask questions. Most even had a mentor who they s...