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In This Issue
. Rugby World Cup
. Tax Tracker
. Simplify Record Keeping
. Independent Contractor or
Employee
. The Balance Sheet of Life
Resources
- Tax Dates
- Tax Facts
- IRD Website
Featured Services
Use of Money Interest
Provisional Tax if we get it wrong because you have earned to much is really expensive due to Use of Money interest plus penalties. If your business has increasing profits please ask us if you should pay your tax earlier. The answer may well be yes you should.
Click here to book an appointment to discuss any business or tax problem with Michelle.
ACC Cover
Many invoices issued need an expert to check them. The default levies are often wrong. If you are interested in finding out more click here and contact us with your questions.
Trust Management
If you have any questions about your Trust I suggest you make an appointment for a interview to discuss how the gift duty changes will affect what you do with your Trust.
It is also a great time to set up a Trust and do all the gifting at once.
Contact us
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I am not a rugby fan, usually I prefer scrapbooking with a group of other women to watching a game on TV however, the world cup has seen me spending hours watching the game live. All the good news in this front has been a welcome change from the doom and gloom around as economists discuss the global markets.
In my office here in West Auckland, we have completed almost all of our annual tax processing work and been forced to reduce hours of work enjoyed by staff. We are still covering both offices from 9 - 5 every day but instead of 3 or 4 staff around all the time in each office there may only be 2 or 3 in each office and sometimes even less.
Amongst clients it is a mixed bag, a few clients are doing really well particularly those in the consultancy market or others with large enterprises whom they work for. Most of my landscaping clients, builders, courier drivers, personal trainers and some other self employed tradesman with no staff have been really struggling and several have stopped their business all together.
I have seen almost all my rental clients in person this year due to the new rules regarding company structures. The majority of my clients have chosen to keep their rental properties and ride out the unstable prices in the property market. Many clients have changed to the Qualifying Company structure going forward. In the last 8 months I have only seen two couples looking at purchasing their first rental investment. In 2007 I would have seen this number each week - whether or not they did buy at least there was an interest in trying to do so.
There is a lack of certainty in the marketplace, those of us in business are feeling it. That's why the feel good factor of watching our favourite team winning a Rugby world cup game is very real and to be part of this country at this time is special. |
Tax Tracker
Every day I receive a tax tracker which outlines some of the court cases that involve tax the previous day plus all the draft and new legislation, standards and regulations regarding income tax and GST which is being passed and is now law.
Every day we accountants read this information and lots more so that we keep up to date and can advise you - and you don't have to read it all. When it directly impacts you, you will get a letter or email from us telling you about this - many of you received one about the LAQC legislation. Other smaller news will be discussed in this newsletter and in person with you when we meet.
If you read something in a magazine or newspaper and you are wondering if it affects you, please do not ever hesitate to contact us first and discuss it. We will always do our best to advise how this new law will affect you.
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Simplify Record Keeping
When the government releases a new Act with over 150 provisions and many pages I always consider it a bit of an oxymoron to say things have been simplified. However, it is now legal and legitimate to keep your business records electronically and even offshore (such as online storage) as long as you can access these documents when required for the past 7 years. (This does not mean you can say the bank keeps your bank statements.) However, for those of us who are moving online with more and more of our business - to not have to print and store all those invoices you receive or send is very good news. I would say over the last 10 years the majority of us accountants have been printing less and less. I stopped printing out ledgers for every client about 3 years ago. It seemed such a waste of paper and space, when you can easily store documents. The government has just agreed. |
| Independent Contractor vs Employee How do you know what you are? |
The Employment law area in NZ is huge. Listening to an employment lawyer speak last month he says every day he gets 2 or 3 calls from emotional employees who have just been dismissed and are very aggrieved. You cannot simply sign a document with someone that says they are independent and responsible for their own tax etc.
There are lots of tests and many many issues. Please do not employ people lightly in your business - always check with us and sometimes in addition to the tax implications we will recommend you get legal advice to make sure you are doing things right contractually. |
1. Intention test – looks at the intentions of each party to the agreement as to the nature of the relationship.
· Control test – examines the degree of control the person engaged to perform the services exerts over the manner in which the work is done. A high level of control supports the conclusion that the person engaged to perform the services is an employee.
· Independence test – examines the level of independence the person engaged to perform the services exerts over their work. A high level of independence supports the conclusion that the person engaged to perform the services is an independent contractor.
· Fundamental test – considers whether the person engaged to perform the services is doing so as a person in business on his or her own account. If the answer is “yes”, then this supports the conclusion that the person is an independent contractor; if the answer is “no” this supports the conclusion that the person is an employee.
· Integration test – looks at whether the person engaged to perform the services is integrated into the business that hired him or her. If the person is integrated into the business, this supports the conclusion that he or she is an employee. By contrast, if the person is not integrated into the business, but rather an accessory to it, this supports the conclusion that he or she is an independent contractor.
The balance sheet of life:
Our Birth is our Opening Balance!
Our Death is our Closing Balance!
Our Prejudiced Views are our Liabilities
Our Creative Ideas are our Assets
Heart is our Current Asset
Soul is our Fixed Asset
Brain is our Fixed Deposit
Thinking is our Current Account
Achievements are our Capital
Character & Morals, our Stock-in-Trade
Friends are our General Reserves
Values & Behaviour are our Goodwill
Patience is our Interest Earned
Love is our Dividend
Children are our Bonus Issues
Education is Brands / Patents
Knowledge is our Investment
Experience is our Premium Account
The Aim is to Tally the Balance Sheet Accurately.
The Goal is to get the Best Presented Accounts Award.
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