We believe in passing on knowledge.
Deductibility of clothing and items relating to personal presentation as business expenses
24/08/2019 by Paul Martin
Unlike our Aussie neighbours, the New Zealand Inland Revenue Department has very strict rules on what you can and can't claim when it comes to clothing and personal presentation expenses. You might think the justification for why you should be able to claim it is legitimate but unless it falls into the below categories, unfortunately you are out of luck.
Below are guidelines on claiming clothing and personal expenses:
Don’t break the (piggy) bank! Why your current account matters, especially if it is overdrawn
29/07/2019 by Paul Martin
Tucked away toward the back of your annual financial statements you will find details of your shareholder current account. It might be in credit or it might be overdrawn, and you might ask does it really matter?
The answer to this question is yes – it does!
We find current accounts is an area that is not well understood, and therefore the consequences of overdrawn balances can come as a shock to clients. Below we have outlined what a current account is and key things you need to know.
Have you considered what would happen if you were subject to an audit by the Inland Revenue Department (IRD)? You may not have ever have considered this, knowing you keep good records and work with us each year to prepare and file your annual tax return. However, even we don't know when the IRD might come sniffing and start asking questions. Often the outcome is that everything is in order, however, getting to this point comes at a cost.
That's why we offer clients the option to purchase Audit Shield Accountancy Insurance.
Understanding Fringe Benefit Tax and when you are liable, especially motor vehicles
25/06/2019 by Paul Martin
Fringe benefit tax (FBT) is a topic that often isn't well understood. What might seem like a generous gesture to an employee may actually see you digging into your pockets to pay extra to the tax man!
To help you better understand this area, below is an overview of the types of activities subject to FBT, with a particular discussion on use of motor vehicles which is the most common scenario our clients face.
This month I want to talk a little about Xero. While most of our business clients use Xero (or MYOB), not everyone that could be taking advantage of Xero currently is. Many smaller sole traders, rental property owners, Family Trusts and self-employed contractors can also benefit from being on Xero.
The most basic Xero subscription is Xero Cashbook, which we can access on behalf of clients for nominal monthly rates. The main benefit of this for you is it provides us with direct feeds of bank and credit card transactions.
All business owners need to be aware of their break-even point - that is, the number of units they need to sell in order to cover their operating costs.
Once you've reached your break-even point, it's time to celebrate: your business is no longer in the red, and you are officially earning a profit.
This article will show you how to calculate your break-even point so you can make wise business decisions that support greater growth.
Thinking about turning your passion into a paying gig? These steps will help you avoid some common mistakes as you set out to earn an income from your favorite pastime.
Do you have what it takes?
Unless you've run a business before, it's easy to get carried away with the idea of how perfect it will be to get paid for doing what you love. Reality check: the stress of needing to earn an income from your hobby can quickly take all the pleasure out of it.
Running a successful business isn't all hobby indulgence. Unless you can afford to hire someone to take care of the bookkeeping, marketing and sales, expect to spend a lot of hours on necessary tasks completely unrelated to your true passion.
Before you start investing in your hobby-to-business idea, take this online quiz to see if running a business is right for you.
Are you concerned about paying your terminal tax bill on 7 April?
Are you concerned about paying your terminal tax bill on 7 April?We understand how terminal tax can sometimes put pressure on your cash flow. And, if you add into the mix that looming provisional tax payment due on 7 May (the final installment for the 2019 year), it can add up to a few sleepless nights, right?
If this describes your situation, stop losing sleep and pick up the phone to us. Let's look at the issue squarely, run the numbers on your options and take prompt action before your tax bill escalates.
Attention: If you are planning on buying or selling property, “bright-line” might catch up with you…….
25/02/2019 by Paul Martin
Like most property owners you have probably heard about the bright-line test but not necessarily understood how and when it could apply. We have been noticing an increase in queries from clients about how this property rule applies to their own situation.
Put simply, bright-line says people who sell a house in New Zealand within a specified number of years of buying it, must pay income tax on any gains, unless it's their main home or another exception applies. Originally this period was two years and since 29 March 2018 this has increased to five years.
The bright-line rule is a clearly defined rule that leaves no room for interpretation. You can think of it as someone drawing a line in the sand. It's clear when you cross that line.
To help you understand and navigate this relatively new area of property tax rules, below are a range of questions and answers as provided by the IRD.
Sound like silly questions? Not any more!
New anti-money laundering legislation is now in place and Chartered Accountants (along with lawyers, banks, real estate agents and other professionals) must meet stringent new rules to verify clients are who they say they are (including fellow company directors, trustees and beneficiaries who are not even our clients), as well as having to hold proof of source of funds for investments and more.
There is too much detail to go into via a short article. This is just to let you know what the new legislation is about and why we might ask for further information when completing future transactions.
For any questions on this new legslation, please contact us and we will happy to discuss it with you.
Recent Posts
- Deductibility of clothing and items relating to personal presentation as business expenses
- Don’t break the (piggy) bank! Why your current account matters, especially if it is overdrawn
- Are you prepared if the IRD audited you?
- Understanding Fringe Benefit Tax and when you are liable, especially motor vehicles
- Save time with Xero
