The IRD is extending support for farmers and growers whose current or future income will be significantly affected by the ongoing drought in several parts of New Zealand. The IRD will exercise discretion in accepting late deposits to the income equalisation scheme, as well as allowing early withdrawals from the scheme. The affected areas are:
Legislation has been introduced in New Zealand that requires all accounting firms to put preventative measures in place to help identify and prevent money laundering under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009. This legislation requires us (along with all other accounting firms) to conduct ‘AML checks’ on all of our
The bright-line test’s main home exemption rules have been amended for residential land acquired on or after 27 March 2021. From that date the exemption rules will not be applied on an all-or-nothing basis for those property purchases, but instead the exemption will apply only for the period during which the property is actually used
It's becoming more common for a residential property to have several owners as this can significantly help with financing the purchase. It does, however, raise questions in regard to the bright-line test when acquiring property from co-owners. Here we look at whether the bright-line test applies in the scenario where a part owner of residential
As part of the government’s proposed changes to claiming interest deductions against residential property income, the interest deductions for rental properties acquired on or after 27th March 2021 (other than for new builds – but yet to be confirmed) will not be permitted from 1st October 2021. If money is borrowed on or after 27th
Does your Dashboard bank account “Balance in Xero” never match your imported statement balance, even when you have no more transactions left to reconcile? The Xero Bank Reconciliation Report can help with that! While Xero shows you a nice green tick and the word “Reconciled” on your Dashboard, your bank account in Xero may
If you have made any donations of $5 or more during the financial year, you may be able to claim these as tax credits. For claiming donations as tax credits: The charity or organisation you donated to must be an approved donee as per the IRD’s ‘Approved Donee Organisations’ list ; The donation must not
Unfortunately, fraud is on the increase and preventing business fraud should be an ongoing priority for all business owners. Business fraud can often be a result of dishonest staff having too much influence or control over a number of key functions of the business. The consequences of fraud or error can be devastating for a
The Government has announced its plans to make the housing marketing more accessible for first home buyers. One key change is the proposed removal of deductions for interest on residential rental properties. The rules will apply to all investment properties other than potentially new builds. These rules have not yet been finalised and the
The government has announced the changes it is introducing to make the property market more accessible for first home buyers. One of these major changes is the bright-line test extension, which is doubling from 5 years to 10 years. The bright-line test taxes profits from the sales of residential property if they are sold within
Many organisations are required either by the law or their foundation documents to have an annual audit or review conducted by an independent auditor. Naturally, these statutory requirements come at a price but there are lots of ways to minimise your audit costs. Here are our top five ways to reduce your audit costs. Choose
We were honoured to be nominated in the 2020 Xero Awards for “New Zealand Large Accounting Partner Of The Year”. This award recognises a Xero accounting partner with more than 40 employees who has been doing great work supporting small New Zealand businesses. We attended the glittering awards ceremony earlier this month in Auckland,
The bright-line test taxes the sales of residential properties which are sold within five years of purchase (or two years of purchase if the purchase occurred between 1st October 2015 and 28th March 2018 under the original bright-line test rules). Here we look at whether the bright-line test applies to the sale of bare land.
Any self-employed individuals such as sole traders, contractors and partners of partnerships, who are in their first year of operating could be eligible for tax discounts by paying their income tax early. In the first year of trading, sole traders, contractors and partners usually do not need to pay their Terminal Tax (year-end tax) for
If you are in business one of the most useful things you can do with your bank accounts is set up a separate account for tax. Setting up a separate bank account and regularly putting money into it will ensure you can pay your tax bills on time and avoid costly penalties and interest. For
ACC is playing their part in helping farmers and rural workers to avoid death or major injuries caused by quad bike accidents. They are offering a $180 (+ GST) cash back on selected quad bike crush protection devices. Accidents from quad bike rollovers are a major contributor to death and injuries in rural workplaces. Crush
I’m sure you’ve heard it before, but its advice worth repeating: every business should have an exit strategy. If 2020 has taught us anything it’s to expect the unexpected – who knew that life’s curve balls could include a worldwide pandemic? Businesses with an exit strategy are undoubtedly better positioned to roll with the punches
Are you confused about the rules regarding deducting low-value assets on rental properties? Let’s take a look at the scenario where rental property owners have made improvements to the property with low-value asset purchases. They have added insulation in the ceiling and installed an extractor fan in the external wall of the bathroom. The government
Mention the word ‘audit’ and the most common reaction is usually trepidation and anxiety. Even when it’s a standard annual compliance audit, it’s hard not to worry about having auditors going through your financials with their proverbial fine-toothed combs and asking uncomfortable questions. But an audit can and should be a positive process that gives
UHY Haines Norton’s Business Improvement Manager Michael Jamieson is often asked how to create a business budget. Here he shares his top three tips for developing a business budget that will help with both planning and control of your business’ finances. A good budget tells you how much you spend running your business, if you
While as individuals COVID-19 has challenged many of us physically, mentally, financially and spiritually, for business owners the challenge of merely staying in business continues to be an ongoing battle. The impact on the travel and hospitality industries has been particularly devastating, and the overwhelming majority of businesses have had to evolve at least to
Here at UHY Haines Norton we use a variety of software packages for different clients and industries that allow better understanding, control and management of their finances. The farming industry has its own unique set of financial challenges and complexities. And because farmers are so busy running their farms each and every day, it can
Every business owner understands how important it is to have healthy cash flow, and this year that has become even more essential as COVID-19 continues to impact on businesses of all sizes. We asked UHY Haines Norton’s Business Improvement Manager Michael Jamieson for his top three tips to improve business cash flow. Review your invoices
If you are planning on taking on a new staff member you might have the option of choosing between hiring an employee and hiring a contractor. It’s important to understand the differences between these two options because your obligations as a business owner will be substantially different. Essentially, an employee works for you, while a
UHY Haines Norton Manager Paul Eckford explains why the Accounting Income Method for provisional tax could be a good option for small businesses struggling with managing cash flow. Provisional tax can be a real burden on cash flow. Normally due in 3 instalments during the year, most small businesses must budget for these payments which
As the COVID-19 pandemic continues to put pressure on the economy, some of our clients are considering options such as restructuring and/or making staff redundant in order to stay afloat. As an employer, if you are in this difficult situation there are proper processes you are obligated to follow. Restructuring is the process of changing
A leading survey of New Zealand businesses found that over 50% have experienced at least one case of fraud. These businesses were of all different sizes, structures and within all industries - the perpetrators of fraud, error and corruption are not discerning, and any New Zealand business could be at risk. Fraudulent Behaviour Is On
UHY Haines Norton Marketing Coordinator Debbie Robson believes that businesses should continue marketing in the current economic climate. Here she shares some ideas for ways that SMEs can promote their business on a tight budget - beginning with reviewing your online presence. In March 2020 New Zealand businesses took an immediate and unprecedented financial hit.
Xero has introduced two useful new features in Xero Expenses to help make managing your expenses easier and more automated. Company Card Reconciliation: employees now have the ability to submit expenses they have paid for using company money. Tracked Mileage: mileage claims can be tracked through an integrated map which accurately calculates distance. For more
Most of the time auditors are perceived as the bad guys because they ask a lot of awkward questions and can charge steep fees. On top of that they can cause you a lot of stress and create an uncertain environment or even fear that things will be found in an audit. Going through an
The new healthy homes standards became law on 1st July 2019. These standards require residential rental properties to meet specified standards across areas including heating, ventilation, insulation and drainage. The deadline for landlords to provide a compliance statement for meeting the healthy homes standards has now been extended from 1st July 2020 to 1st December
A New Zealand Business Number (NZBN) is a unique 13-digit number for all New Zealand businesses, including companies, sole traders, partnerships, registered charities, trusts and government agencies. It is designed to make it easier for businesses to connect and interact with each other as well as government agencies. In recent times, a NZBN has become
Our previous article “Ring-fencing Of Residential Rental Property Losses” explained what these rules are and the circumstances under which they apply. Now we take a look at these residential ring-fencing rules and mixed-use assets. A common mixed-use asset scenario is where a person owns a rental property that is rented out for short-term accommodation as
From time to time there may be a change in circumstances to a rental property that is classed as a “change in use”. For example, a property may be rented out to tenants for part of the financial year, and upon moving out the owner moves in and uses it as their main home. This
Claiming business expenses against your income is a great way to save you money by lowering your tax bill. The number one rule about claiming business deductions is that the expense must be incurred in deriving or earning business income. That's why there isn't a definitive list of claimable business expenses because there must be
Employing remote workers can be a great strategy for growing your business. If the nature of your business does not require hands-on labour, it may be worth considering allowing the flexibility that working remotely provides. And with the continuing spread of coronavirus around the world, businesses are being urged to develop continuity plans to help
UHY Haines Norton Director and Farm Accounting expert Mark Foster reminds farmers why accurate livestock counting is so important for tax purposes. Keeping a handle on your livestock numbers can be an ongoing challenge, and it all comes to a head at the end of the financial year when we want an accurate stock figure
Many of our clients prepare and file their GST returns and payments for their small businesses. As is the case with all taxes, it’s important to calculate your GST correctly - getting it wrong can prove to be an expensive exercise! Here we share some GST mistakes we commonly come across: Not registering for GST
Planning for the financial year end on 31st March now will help make the process easier and quicker. Getting all of the information together that we need to prepare your year-end accounts can take quite a bit of time, but getting organised now can help you to have the right information all ready to go.
Congratulations to 2017 UHY Study Scholarship winner Shona Mani, who has been selected for an internship opportunity at Chartered Accountants Australia and New Zealand (CAANZ). Here Shona shares with us details of the opportunity and her tips for other university students. I would like to thank UHY Haines Norton as their Study Scholarship made my
Once again we check in with some of our past scholarship winners to see how their tertiary journey is going. Reagan Davis, 2016 Winner As I am finishing up my last semester it is hard to believe that I am approaching the end of my Bachelor of Commerce degree. It
It’s hard to believe that Christmas is just around the corner, but here we are in the throes of the festive season and year-end celebrations. Most work places host a Christmas social event for their staff in one form or another, which can be a great way to boost staff morale and show appreciation for
We are excited to announce that the winner of the UHY Study Scholarship 2019 is Steven Philalom from Kelston Boys High School (KBHS). Steven has consistently aimed for academic excellence at KBHS, where he is a Prefect. He has a particular affinity for commerce-related subjects, excelling in Accounting, Economics and Statistics. In addition to a
Business.govt.nz has a convenient tax invoice template that small business owners can use for designing their invoices. Its simple layout ensures that all of the correct information is included for the purposes of both the issuer and the recipient. What Information Should A Tax Invoice Include? Business name. Invoice number. Date the invoice is issued,
A person may elect to apply the residential property loss ring-fencing rules either on a portfolio basis or on a property-by-property basis. Here we discuss and explain how the ring-fencing rules apply under each method. Portfolio Basis Unless a taxpayer elects otherwise, the loss ring-fencing rules will apply on a portfolio basis. This means that
We explain what resident withholding tax is, who it applies to, rates and rules for making payments. What Is Resident Withholding Tax? Resident withholding tax (RWT) is: The initial tax you pay on interest and dividends you earn from your New Zealand bank accounts and investments; Whereas the initial tax you pay on income from
Congratulations to our client Bethells Farmstay for Dogs, who are celebrating their 10th year in business! The idyllic haven for dogs has never been more popular, often booked out a year in advance for the busy holiday periods. Recent purchases of a van (for pick ups and drop offs), and a Ford Ranger remote control
Choosing a pricing strategy can be one of the most important decisions a business owner makes. It is intrinsically linked to income, profitability, sales volume and market share, and can ultimately affect the life of a business. It can be difficult to decide which pricing strategy best fits with your business model: premium pricing, penetration
The new ring-fencing rules of rental loss apply retrospectively from 1 April 2019 for the 2019/2020 and later income years. Inland Revenue issued an official paper entitled “Ring-fencing rental losses” in March 2018 outlining the proposal to ring-fence tax deductions on residential rental properties so that they could not be used to reduce tax on
One of our previous articles, “Running A Business From Home”, discussed some of the pros and cons to running a home-based business, including the need to review your home insurance policy. If you have a home office or any type of business where you are selling a product or service from home, you need to
Family-owned businesses play a fundamental role in the global economy – but there are challenges to ensuring that their success continues from generation to generation. The list of the top 750 family businesses globally released by family capital in 2019 has many familiar names with a long history of family ownership: US company Walmart, founded
We share with you some new Xero updates and features to help you to run your business. Fixed Price Tasks In Projects Xero has added a useful new task type in Projects. It allows small business users to track variable hours on a task, while still charging it out at a fixed price. This will
An organisation can be required to undertake either a financial audit, financial review, or agreed-upon procedure engagement (AUPE) for a variety of reasons, including statutory requirements or to meet the stipulations made in trust deeds, constitutions or charters. When given the choice between an audit, review or AUPE, it’s important to understand the difference and
It’s common for businesses to spend money on entertaining customers as a way of showing appreciation for their custom and encouraging loyalty. However, deciphering whether client entertainment expenses are non-deductible, 50% tax deductible or 100% tax deductible in line with the IRD’s rules can be a real challenge. From the IRD’s perspective, the types of
On 1st July 2019 the government passed the second of three annual increases in fuel tax, resulting in some of the highest petrol prices New Zealand has seen in years. With no end in sight, it is worth knowing that if you use petrol in off road vehicles or machinery for commercial purposes, you could
In May the government introduced a new R&D tax incentive to encourage businesses to spend more on research and development. Because it applies to the 2019/2020 tax year, any R&D expenditure incurred from 1st April 2019 could qualify for the tax incentive if it meets the eligibility criteria. We recommend that businesses document and keep
A GST-registered person who purchases “second-hand goods” in the course of a taxable activity may be able to deduct a proportion of the purchase price as input tax. A deduction may only be made if: The goods are purchased for making taxable supplies; The goods are in New Zealand; The supply is a non-taxable supply,
While many expenses incurred in the course of doing business can be claimed to reduce your income tax, certain expenses are not deductible for tax purposes. These include: Late filing and late payment penalties imposed by the IRD. Costs related to breaking the law, such as speeding tickets or parking fines. Insurance premiums relating to
Location Tracking Many businesses, particularly trade and construction businesses, involve moving around from job to job. Accurately tracking the time spent on individual jobs is essential to help with paying employees, assessing the profitability of individual jobs, and to help with quoting on future jobs. However, manually tracking the time spent on different jobs can
Congratulations to UHY Haines Norton client Gary Taylor CNZM QSO, CEO of the Environmental Defence Society (EDS), who has been awarded a Companion of The New Zealand Order of Merit in the Queen’s 2019 Birthday Honours list. As an experienced environmental policy analyst and consultant, Gary has been honoured in recognition of his contribution to
If your business provides sponsorship to an individual or organisation, it may be tax deductible. Sponsorship is different to ‘advertising’ or ‘donations’. It is defined as when the taxpayer incurring the expenditure expects that his/her business will be promoted in some way, whilst the sponsorship recipient will also be benefited in some way. The IRD’s
Workers all around the world are increasingly favouring short-term jobs, or gigs, in place of more traditional permanent roles. Gig workers who take casual short-term jobs fall into the same category as contractors, free-lancers and self-employed people who must account for their own tax on every job they take. For tax purposes, the same rules
The IRD and other government agencies regularly select individuals and businesses to conduct audits on. They examine your finances to see if you’ve paid the right amount of tax and comply with the applicable tax laws. This may consist of a simple check of your GST registration through to an in-depth examination of your business
There are now four ways to manage provisional tax: The standard uplift method, where three payments are made during your financial year based on your tax bill from the previous year plus 5% (this is the default method). The GST ratio method, where provisional tax is calculated based on your GST supplies and payments align
In recent years there have been as many as 50,000 new businesses starting up in New Zealand each year. Statistics New Zealand reports that while around 80% of business start-ups usually survive their first year, in the longer term often just a quarter survive to celebrate 10 years in business. While no two businesses (or
Renting out your home, rental property or holiday home for a short-term period can be a great way to make some extra income when you’re not personally using those properties but don’t want to lock in long-term renters. Airbnb, Bookabach and other online accommodation companies make it extremely easy to list your property as they
The value of a business is largely determined by profitability and presentation. Although you may not be planning to sell for several years, you can – and should – start getting your business ready for sale now. Profitability Naturally the financial performance of your business will be a major factor in determining its value. You
If you own a rental property or are looking to invest in one, it’s worth understanding the different rental property expenses you may be able to claim to help lower your tax burden. Rental Property Expenses Which Are Tax Deductible Legal fees incurred during the process of purchasing the property. Accounting fees for the ongoing
Do you sell pot plants or homemade jam to friends or at your local weekend market? While this may be just a hobby to you, in the eyes of IRD it could be classed as a business and therefore is eligible to be taxed. Regular sales – however small they may be – can mean
New Zealand is the land of small business owners who have turned the dream of being their own boss into reality. At any given time there are a wide variety of opportunities available for potential purchasers to suit every budget, industry and location. So how do you know if a business for sale is the
If your organisation requires an audit due to industry regulations or because potential investors or other stakeholders require one, it needn’t be a negative, stressful experience. Here at UHY Haines Norton we see first-hand how an audit is actually beneficial as it presents you with the opportunity to improve your organisation. Here we aim to
Established in 2007 as a joint venture of the Rosebank Business Association and the Rotary Club of New Lynn, Pathways to the Future Trust rewards the efforts of young employees who demonstrate talent, leadership and initiative within their employment roles. Recipients are awarded grants towards vocational courses, text books or tools to assist them in
We check in with our past scholarship winners to see how their year at university has been. Reagan Davis, 2016 Winner As I finish my second year at the University of Auckland, it is hard to believe how quickly the time has passed and that next year will be my third and final year of
With an estimated 97% of New Zealand enterprises classed as SMEs and 70% of Kiwi businesses operating as sole traders, small businesses dominate our country’s industries. Many small business owners choose to run their business from home, which can present different benefits and challenges to running a business from separate premises. Here we take a
Understanding Depreciation Fixed assets are long-term assets that a business owns which are expected to be used in the business for longer than one year. They are often used to operate the business, such as machinery, buildings, equipment and vehicles. As you can’t deduct the cost of fixed assets from your taxable income as expenses,
People in small business today, especially start-up business owners, often struggle to balance work and family pressures. A typical scenario involves starting work early in the day, finishing late, spending dinner with family and then working late into the night to complete accounts, pay bills, quote on jobs etc. Is this you? One of the
Is your will your farm succession plan? Unfortunately for many privately-owned farming enterprises, the preparation of their wills is their only attempt to address family succession. According to recent research, only 50% of farming enterprises have started to discuss succession, let alone prepared an effective succession plan. We all know succession is a complex and
“My customers will be with me until the day I die.” “My business is my identity.” “My business is my superannuation.” Sound familiar? It’s called ‘key person reliance’ and can actually be detrimental to your business. A business that relies heavily on its owner is not as valuable as a business that is not reliant
You may notice that our practice is called “UHY Haines Norton Chartered Accountants”, not “UHY Haines Norton Accountants”. Here at UHY Haines Norton there are a total of 26 chartered accountants on our staff – that’s over 2/3 of our professional staff! But what does “Chartered Accountants” mean and what’s the difference between that and
Although you may think of your year-end financial statements as an annual exercise to keep the IRD happy, your statements are actually a valuable resource showing how your business is performing financially. They give you the opportunity to compare financial performance from the previous year and look at ways to improve future performance. Profit and
Being a self-employed contractor presents its own unique benefits and challenges. You can elect to work under your own name as a sole trader, or set yourself up as a company. Benefits Of Being A Contractor As a contractor you are essentially your own boss, and have control over how, when (and sometimes where) to
Your year-end accounts shouldn’t be just an annual exercise that you and your accountant go through to placate the IRD. They do, in fact, offer essential insights into how your business is performing and provide an opportunity to make changes to improve future performance. In this beginner's guide to understanding your balance sheet, we take
The short answer is yes, provided the benefit from the insurance policy is taxable. The real question to ask is: is your income protection insurance taxable? Indemnity or Loss of Earnings Insurance A claim made against an Indemnity or Loss of Earnings policy relates directly to the loss of income and the pay-out is based
If your business carries stock of any kind, good inventory management is important to prevent over-ordering, out-of-stocks and wastage. The key to having enough stock on hand to efficiently service orders lies in actively managing your inventory. We recommend taking a critical look at the amount of cash you have tied up in stock. Taking
Fringe Benefit Tax (FBT) affects many SME owners and yet can be difficult to understand and calculate correctly. In this article we explain exactly what FBT is and how it works. What Is A Fringe Benefit And Why The Tax? A fringe benefit arises when an employer provides a non-cash benefit to an employee, including
We previously explained the various elements in a typical balance sheet. Now in part two of our “Beginner’s Guide To Understanding Your Balance Sheet” articles we take a look at some of the ratios you can calculate to gain valuable insights into the financial position of your business. Assets = Liabilities + Owner's Equity Solvency
Your year-end accounts shouldn’t be just an annual exercise that you and your accountant go through to placate the IRD. They do, in fact, offer essential insights into how your business is performing and provide an opportunity to make changes to improve future performance. In part one of our two-part “Beginner’s Guide To Understanding Your Balance
We previously introduced the concept of the ‘Business Value Gap’ to help in assessing the difference between the value of a business today and what it needs to be at the time of sale. Now UHY Haines Norton’s Business Valuations specialist Kerry Tizard presents a case study showing the Business Value Gap in action. I
UHY Haines Norton Audit Director Bhavin Sanghavi explains the benefits of preparing for an annual audit to make the process run smoothly and maximise the value the audit provides to an organisation. It’s that time of year when most organisations will start preparing for their annual financial audits. Some organisations and their accounting staff may
Creating value in your business is different and more complex than increasing sales. UHY Haines Norton’s Business Valuations specialist Kerry Tizard explains how small business owners can assess the return their business is generating and identify ways to achieve growth. I recently met Steve, a business owner who has started a business providing general IT
