We would like to take this opportunity to wish you & your families a wonderful, safe Christmas & and every success in the New Year!
AAffleck Dodd O’Meara Ltd will be closing both our Alexandra and Queenstown offices for the year at 11am today, Thursday 22nd December. Our Alexandra office officially reopens on Wednesday 11th January, with our Queenstown branch reopening on Monday 9th January. We look forward to supporting you through another great year in 2017!
Superheroes play a smooth shot for charity
In support of local Queenstown charity The Wakatipu High School Foundation’s 3rd Annual Millbrook Golf Day, Affleck Dodd O’Meara took their team of semi-talented Partners to the green, along with ring-in Mark Pullar of Roost Mortgages, for what turned out to be a successful day all around.
Sand bunkers and water traps at the Millbrook course were no match for our team who enjoyed an action packed day in the sun on December 1st and placed 9th overall, thanks go to Deloitte for sponsoring the prize!
WHS Foundation organised a great day of competitions, prizes and auction items all in support of Wakatipu High School. The Foundation provides resources to inspire learning, enrich teaching and create opportunities for their high school students that would be otherwise unavailable.
15 January 17
Provisional tax instalments, student loan interim payments are due.
GST and employers’ returns and payments due for the
period ending 30 November 2016.
28 January 17
GST returns and payment are due for the taxable
period ending 30 December.
28 February 17
GST returns and payment are due for the taxable
period ending 31 January.
If a due date falls on a weekend, public holiday or provincial anniversary day, IRD can receive your return and payment on the next working day without a penalty being applied.
Have you paid too much TAX?
Are you one of the over one million PAYE employees in New Zealand that, according to the TV advertisements, have overpaid their tax? Aimed at PAYE Employees, the over-payments referred to will be by a few hundred, not a few thousand.
But what about business owners and shareholder employees?
Business tax is a game best left to the tax professionals. If you’re involved in a business you’ll know there are pitfalls a plenty and more to tax than meets the eye, so paying the bare minimum legal requirement is not for the average player.
As annual accounts and tax returns are prepared for companies, make sure your accountant has their finger on the pulse leaving no genuine tax deduction undiscovered. Our team at ADO pull out all the stops to give our clients the best tax deal possible.
If you have any niggles about the tax know-how and assurances of your accountant (and you’re not with us already), then get in touch for some guidance & wise counsel.
Struggling in business?
A few thoughts on how to ‘wipeout’ in a booming economy.
NZ is riding an economic wave. If you’re not enjoying the epic thrill of carving up that barrel, here’s five thoughts emphasising some areas you are likely pretty awesome at…
- Thinking that your clientele are clueless because they have no idea how amazing your service or product is
- Believing that your competitor’s have an inferior product
- Holding on to rigid payment conditions & terms of trade that fit you but nobody else e.g. “credit cards? we don’t accept those”
- Rejecting the idea of upskilling your staff regularly because when you do, they pack up and go
- Being miserly with your advertising budget because consumers will always look for the best products without any marketing investment
A head’s up on employment agreements
Are you keeping up with what’s new?
It is mandatory that every employee you have has a current written employment agreement, so if your existing agreements have been untouched in the filing cabinet for some time then you have until 31st March 2017 to update them. Although this date may seem like months away, we say carpe diem! – There’s no time like the present to get into it! (Don’t forget that all new employees are required to have the newly formatted agreement as well.)
We can suggest these three options to assist on your mission:
- Seek help from a legal professional specialising in employment law,
- Fly solo at www.business.govt.nz and utilise the free online step by step Employment Agreement Builder
- Get in touch with Emily Richards at Human Connections Group, (email@example.com) who are experts in this area
To hire or not to hire..
Tricky decision?.. but potentially a very rewarding choice.
To offer you that extra assurance towards the next step on the path to hiring staff – check out this handy tool which provides an estimate on what your new employee might set you back http://www.business.govt.nz/employeecostcalculator/
If you are charging out staff on an hourly rate, it might come as a surprise to you, when all the costs are accounted for, what the real hourly cost of your employee is – get in touch if you would like some advice around considerations and inclusions when calculating your staff charge-out rates.
Health & Safety
Concerned about personal liability as a company Director?
As you’re probably aware, the Health and Safety at Work Act 2015 was recently introduced and there are sections that are particularly relevant to directors – officers due diligence duty, officers liability and worker engagement and participation requirements.
The team at WorkSafe NZ in conjunction with the Institute of Directors have released a comprehensive Health and Safety Guide: Good Governance for Directors. We recommend that all Directors of any active companies review this guide in light of their own organisational practices to ensure they aren’t needlessly exposing themselves to personal liability: http://www.worksafe.govt.nz/worksafe/information-guidance/all-guidance-items/hswa-good-practice-guides/health-and-safety-guide-good-governance-for-directors/directors-guidelines-on-their-responsibilities
Previously it has been commonplace for closely-held families to be set up with both the husband and wife as directors. As a result of this new HSE legislation, we are now recommending that only those individuals with appropriate knowledge and understanding of the business and in particular the company’s HSE policies are included as directors.
Please contact us if you have any concerns regarding your own liability situation as a result of your directorships.
Know your BEP…& we don’t mean the Black Eyed Peas
Any good at Algebra? BE = FC / GM.
The breakeven point (BEP) of your business is as critical as it sounds. You make a loss if you’re below your BEP. You make no money if you reach your BEP. You make money if you exceed your BEP.
Try this simple example:
- Say you had to pay $20,000 a month in fixed costs whether you sold anything or not e.g. rent, insurance etc.
- Say your gross profit margin (income less direct costs of delivering the product or service you sell) was 40%.
Breakeven = fixed costs/gross percentage margin
Breakeven = $20,000/.40
Breakeven = $50,000
If you sell, deliver and collect $50,000 per month, you have neither lost nor made money. You broke even.
If you lowered your monthly fixed costs to say $17,000 and increased your gross margin to 42%, your breakeven drops to $40,476 and you suddenly make $9523 profit for the month.
Your BEP is critical. Now you can see why.
Reducing tax by Income splitting
Using a Trust for a tax advantage.
This is easiest to understand with an example:
A trust earns $100,000 net taxable income in a year. If the income is held in trust it will be seen as trustee income and taxed at the trust rate which is currently 33% equating to tax of $33,000…
However, if you distribute the income to the beneficiaries it will be taxed at their marginal tax rates which can be substantially lower than 33%.
If the income is split between say 8 beneficiaries each of whom is on a marginal tax rate of 10.5%, the total tax payable will be $10,500 giving a tax savings in the year of $22,500!
Donations from Family Trusts
When and what to claim.
Companies can claim charitable donations as a business expense, so long as the company has made a profit.
Individuals can claim donations so long as the donations do not exceed their gross income before tax…
Trusts cannot claim donations as an expense against their income. However, provided charities are included as beneficiaries of the trust, they can receive a distribution from income.
Children as tax saving Trust beneficiaries
Use your children for tax saving.
How can you split your income to many trust beneficiaries?
Children on low or zero income can be instrumental in reducing a trust’s tax liability. If income is allocated to them it will be at their marginal tax rate, which can be a lot lower than yours.
Something to note however, is that children under the age of 16 are taxed at 33% to prevent the use of young children being used to split income. What does this mean for you? You may just have to wait until your children are over 16 to start to claw back some of the cost of their upbringing!
So long, farewell…
It was a sad day for us at ADO to bid goodbye to Suzanne Gurnell who unfortunately decided to return home to warmer climes in the Waikato. Many of our Queenstown clients have had dealings with Suz over the past couple of years, and we know you will join us in wishing her all the best with her move back to the North Island.
We have been in touch directly with our affected clients to ensure their needs are appropriately managed going forward.
Your financial accounts for 2016 are due soon
have you returned your 2016 Questionnaire to us?
If you haven’t already returned your 2016 Financial Year Questionnaires we would love to receive these in the short term to avoid a mad rush leading up to 31 March – if you need a copy of your Questionnaire please get in touch through our details below.
Grumpy with your accountant?
About this time of the year, business owners get frustrated with the slow turnaround of their annual accounting work and tax returns. And many are on high alert for unexpected invoices.
At ADO we pride ourselves on our efficient turnaround and reasonable fees. Based on industry stats, our charge out rates are 43% below the national average!
If you’re grumpy with us for some reason please contact us and let’s sit down for a chat to compare what we can offer with what you currently get. Or if you know someone who is grumpy with their own accountant, why not get them to reach out to us so we can do the same for them.
Accountants aren’t funny…
I never wanted to believe that my Dad was stealing from his job as a road worker.
But when I got home, all the signs were there.