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Evans Doyle in the Cambridge News

Tim and Jane were recently profiled in the Cambridge News for a people in the business section. They were asked various questions about their business success, what a usual day looks like, advice to business owners, and more. Read the article below (you may need to zoom in due to the text size)....

Cashflow Forecasting

Cashflow forecasting is critical to the survival and growth of any business, without establishing targets for the year you may be flying blind.We find that our most successful clients are those who have set targets each year and monitor their results on a regular basis.  Our team are here to help you to set, monitor and manage financial targets and improve business performance.A cashflow forecast will set monthly financial targets and provide you with a monthly breakdown of all your income ...

Are your casual employees really casual?

Casual employment agreements are often used to support businesses during busy periods. However, there are implications if there are changes resulting in regular work pattern. A true casual employee has: ·         ‘as needed’ shifts with no guaranteed hours and can decline to work·         has no regular work pattern·         no ongoing expectation of employment...

Dividends - An Overview

A dividend is a distribution of profits a company makes to its shareholders. Sometimes, they can be confusing, especially the extra 5% dividend withholding tax (DWT) and the difference between cash and non-cash dividends. This article explains dividends in more detail.What we have noticed is that our most successful clients understand accounting and tax well. They know the rules of the game and then can tweak and adjust their game plan to win. Our aim is to extend this knowledge to our clients s...

2023 Budget: Trust tax rate will increase to 39%

In May, the government released their budget which announced a tax change to the trust tax rate. From 1 April 2024, the trust tax rate will increase from 33% to 39%. It is possible that the increase in the trust tax rate may not go through considering the election later this year (and the limited time to pass legislation beforehand) - watch this space.When the government increased the top individual marginal tax rate to 39% for income above $180k in 2021, the government was advised by ...

Minimum Wage Increase from 1 April 2023

There are four significant changes occurring to payroll from 1 April 2023.1.  Adult minimum wage (over 16 years old) will increase by $1.50 to $22.70 per hour and the starting-out and training minimum wage will increase by $1.20 to $18.16 per hour2. The annual ACC earner levy rate is increasing from 1.46 percent to 1.53 percent 3. The annual ACC earner levy threshold is increasing from $136,544 to $139,3844.  The student loan threshold is increasing to $439 per week...

End of Financial Year Checklist

As we approach the end of the financial year, it's important to start thinking about preparing your financial statements. To ensure that everything is accurate and up-to-date, we recommend that you take the following steps:Remember to complete a stock take. This will help you to determine the value of your inventory at the end of the financial year and will also help you to identify any discrepancies.Ensure that you have an accurate work-in-progress (WIP) report. This will help you to determine ...

Trusts: Deemed Settlor Risks

Trustees of a family trust often consider distributing income to beneficiaries (sometimes those on a lower marginal tax rate). They may not necessarily make a cash payment. This arrangement creates a beneficiary loan between the trust and the beneficiary; the trust owes the money to the beneficiary because they have been paid the income (by way of income distribution for tax purposes) but not withdrawn the cash.There are new tax issues that can arise from beneficiary loan accounts because of the...

Paying Employees When Disaster Strikes

With the recent cyclone and flooding affecting regions throughout the North Island, here are some important points to remember regarding your employees and payroll.  First and foremost, ensure the safety of your employees and yourself. During and after emergencies, honest and open communication is vital to maintaining relationships. Remember your employees may be under additional stress....

GST Accounting Basis: Payments, Invoice, or Hybrid

When registering for GST, taxpayers have a choice to register on an invoice basis, payment basis, or hybrid basis. For businesses that meet the criteria, we usually recommend registering on a payments basis because it is simpler, has less administrative time and costs, and GST payments align with regular cash flow cycles.This article explains the GST payment basis criteria and why we usually recommend this option....

Home Office Claim

A home office claim represents a tax deduction for the portion of your home that you use as an office. It’s calculated as a percentage of your total home expenditure.You would pay for these costs regardless if you are in business or not, so why not make the most of an extra tax deduction to reduce the tax that you pay?Most small and medium businesses use a portion of their home as an office. Make sure that you claim a deduction for these expenses.This article reminds you about calculating the ...

Taxing Subdivisions on Own Home

With rising interest rates, many clients are looking at opportunities to utilise an existing property to develop, make a profit and pay down debt. While the below example looks at a subdivision and construction of two townhouses, other clients are looking at AirBnB for residential rental properties (which are higher yielding but more work) or renting out a spare room at home. We’ve recently come across the below question (name and location changed for privacy reasons). Question Justin bought a...

Significant impacts of removing interest deductibility on residential property

In March 2021, the government announced the removal of interest deductibility on residential rental properties. For properties acquired before 27 March 2021, the removal of the interest deduction is being phased in over the next five years, as outlined below. Date interest incurred Percentage of the interest that can be claimed 1 April 2020 to 31 March 2021 100% 1 April 2021 to 30 September 2021 100% 1 ...

Company Wind-up Process

Once a business sells (or stops trading) or a company sells its property (real estate), we recommend winding up the company. This is important because, otherwise, IRD will continue to expect a tax return for each financial year (even if the company does not trade), and the Companie's Office will require an annual return filed each year. This article outlines the steps required as part of the company windup process. There are other options available (such as more formal liquidation). However, in ...

Personal Services Attribution Rules

Specific income attribution rules apply when an individual provides personal services through an associated entity (such as a company, trust, or partnership). The purpose of these rules (tax legislation) is so that the individual does not avoid a higher income tax rate by diverting income to an associated entity. This article explores the income attribution rules in more detail and outlines when they apply and the exemptions. There may be valid commercial drivers for an individual to use an asso...

Summary of Trusts

A trust can be an efficient vehicle that can provide asset protection, allow for succession planning, and may provide incidental tax savings. Profits are taxed at 33% compared to the top marginal tax rate of 39% for individuals with income over $180k. This article looks at a brief overview of the nature of trusts and trustees. A trust is an arrangement where a person (the Settlor) settles on a person or persons they trust (the trustees) property for the benefit of others (the beneficiaries) on t...

Accounting Principles

Understanding accounting is crucial. It is one of the most important skills for business owners, investors, and creating wealth. High net worth families and our most profitable clients understand accounting and the difference between cash and profit. This article’s purpose is to help you understand one of the core concepts of accounting, accrual accounting. Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs, rather than when cash is rec...

Company Office Annual Returns

Every company in New Zealand is maintained in a company register called the New Zealand Companies Office. This register has a list of every single company in NZ (both private and public), and includes the key details of the company; its name, incorporation date, directors, shareholders, founding documents, shareholding changes, etc. This information is available to the public to view, and search. For example, Air New Zealand Limited (a listed company) details can be found here. This is all publi...

Signed tax returns

We are still waiting on a number of signed tax returns to be returned to us. We cannot file your tax return with IRD until we receive the signed copy back from you. Please urgently return these to us so we can file them with IRD before the due date.Please, can you please email this to Nicky as soon as possible. ...

Preparing for Interest Rate Rises

Interest rates have increased from 2% last year to floating rates of 4.79% as of today. If your current mortgage is coming off a fixed term portion, you could be in for a surprise. No one has a crystal ball, or where rates will be this time next year, or in a few years. The intention of this article is to start thinking about what effect this will have on you. This article will outline some tips you can do to prepare and think about now:...

Superannuation Eligibility is changing

There is a new law coming for those turning 65 years old on or after 1 July 2024. Whether you were born in New Zealand or overseas, it will require people to have been in New Zealand for a minimum of 20 years since the age of 20, instead of the current 10-year minimum.  Something to think about if you are in this category. For more information click here...

Family Tax Credits Increasing

Legislation has been passed and Family Tax credits are increasing from 1 April 2022.   Over 300,000 New Zealand Families will receive extra government assistance via the Family Tax Credit, Best Start Tax Credit and the Minimum Family Tax Credit. Click here for further information. ...

GST Due Dates for 2021/2022

We have listed all GST return and payment dates below. We will be providing regular updates throughout the year, however you may wish to set calendar reminders to ensure these important dates are not missed.  15 Jan - GST return & payment is due for period ending 30 Nov 2021 15 Jan - Provisonal tax payments are due if you have a March balance date 28 Feb - GST return & payment is due for period ending 31 Jan 2022 7 Apr - Terminal tax payments are due if you have a March balan...

AirBnB and your Property

There have recently been significant tax changes to how residential rental properties are taxed. These fundamental changes include ring-fencing of rental losses, removing interest deductibility, and increasing the bright-line test from five to ten years. AirBnB properties are classified as residential land and therefore (most) the recent tax changes do affect AirBnB activity.  Under the definition of residential land, an Air BnB does not qualify as a commercial property as the land used is ...

GST Payment Date extended

GST payment date for 28 October has been extended to 4 November 2021 Taxpayers will have an extra week to file and pay GST and income tax currently due on October 28 this year. This is in response to Inland Revenue's systems shutting down for their final Business Transformation release from 3pm Thursday 21 October until the start of business on Thursday 28 October.See the IRD website for details click here...