NZ says Goodbye to Millions of Single-use Plastic Bags

It’s taken 17 years to follow in the footsteps of Bangladesh, the first country to ban single-use plastic bags, but we’re finally there! From 1 July, single-use plastic bags can’t be sold or given away in New Zealand. It’s all part of the Government’s programme to reduce waste and build the foundations for our transition to a ‘circular economy’ where eventually waste will be designed out of the system.

So, what IS a single-use plastic shopping bag?

They’re the plastic bags with handles (made of plastic up to 70 microns in thickness) found at supermarkets, takeaways, and other retailers.

The phase out also applies to heavier boutique-style shopping bags and the ‘emergency’ bags currently offered by some supermarkets as an alternative to a free single-use bag. It includes bags made of degradable plastic (ie, biodegradable, compostable and oxy-degradable) regardless of whether the plastic material is sourced from fossil-fuel, synthetic compounds or from biological sources such as plants.

Which plastic bags are still allowed?

Bin liners, bags for collecting pet waste and barrier bags used when buying meat, fruit and vegetables (unless they have handles).

What can we expect at the checkout?

Manufacturers and retailers have until 1 July to phase out single-use plastic bags completely, or face six-figure fines. Retailers are offering reusable bags, paper shopping bags or even cardboard boxes to help customers adjust. The Government is encouraging shops to move away from any single-use option, including paper.

What can people use instead?

There are loads of different reusable bags on the market, including bags made from heavier-duty plastic, hessian, lightweight nylon, cotton, recycled fabric or jute. Shoppers can also use wheeled trolley bags, backpacks and home-made bags. The trick is remembering them!

Building a Productive Nation

Innovation is seen as the key to assist New Zealand industries in the transition to an economy high in productivity but low in emissions. The challenge is for businesses to be more innovative and New Zealanders to adapt to changing job markets.

The R&D legislation born out of last year’s budget has passed and it’s up to Kiwi businesses to take up opportunities there. The Budget allocates $157m to support the “Commercialisation of Innovation” package of initiatives to invest in research and science. An “Innovative Partnerships Programme” seeks to attract globally leading firms and innovators. “Business Connect” establishes a cross-agency digital platform of business-focused services.

New start-up businesses have been spotlighted as likely to run with some of these initiatives, the Minister for Research, Science and Innovation calling them “the ultimate champions of innovation that often introduce more radical, disruptive innovations than more established firms”.

But how does a start-up expand? The Budget establishes a $300m fund to support venture capital investments taking “mid-size” start-up businesses to the next level. This is designed to stimulate growth and help businesses remain onshore, reducing pressure on companies to sell prematurely to overseas buyers.

The initiatives also fund vocational education and training. These include reforms to boost apprenticeships and trade training, increased subsidies to Tertiary Education Organisations, wage subsidies, and funding for an “Industry 4.0” demonstration network to help businesses embrace smart technologies and data driven solutions.

Tax and the Budget 2019

Further developments with digital services tax and collection of the International Visitor Levy were announced and the Government remains committed to modernising and simplifying the tax system.

Pre-Budget

The major announcement pre-Budget was that Capital Gains Tax is now off the table and that has pretty much overshadowed any tax announcement since. The Government also announced two specific pre-Budget tax measures:

  • GST on telecommunications, and
  • repeal of racing totaliser duty

GST on telecommunications

The Government has announced a proposal to change the GST of telecommunications so that these would be aligned with the treatment of other remote services and based on the residency of the supplier. The main implication of this new proposal concerns roaming services provided by telecommunications providers in that:

  • outbound mobile roaming services to New Zealand residents overseas are proposed to be subject to GST (currently they are zero-rated), and
  • inbound mobile roaming services provided to non-residents in New Zealand would no longer be technically subject to GST.

Repeal of racing totaliser duty

The racing totaliser duty or betting levy will be phased out. It represents 4% of betting profits, amounting to $13.9 million in 2018. This sum will be redistributed to the racing codes and Sport New Zealand, with a proportion set aside to reduce gambling harm.

Meanwhile, the tax policy work programme is still progressing and the next stages of Inland Revenue’s Business Transformation programme look at the administration of student loans, KiwiSaver and child support. We’ll keep you updated.

6 Ways the NZBN will save you Time and Money

Whatever the size or shape of your business, the New Zealand Business Number (NZBN) will make doing business easier, faster and more professional.

Here’s how:

  • Search the NZBN Register and you’ll have details for all the businesses you deal with at your fingertips.
  • Know your suppliers’ NZBNs and process and pay their accounts more quickly.
  • Using your NZBN means you won’t have to repeat your key details to customers and suppliers.
  • It pre-populates online forms with your information to save time.
  • Always deliver goods to the right place by getting alerts when your customers change their physical address.

More than 675,000 Kiwi businesses have their NZBN, do you? Head to the NZBN website.

Tax and Property – Ring-fencing Rental Losses

There’s been some confusion about proposed changes to the tax treatment of rental losses. Many taxpayers have been a bit panicky, under the impression that the changes are already in force.

While it seems to be fairly certain that these changes will come in, until the law passes they are not in operation. The legislation to make this happen is still in process. It is still being debated and may see further changes. We’ll keep you informed about developments.

The proposed new rules are expected to apply from 1 April 2019 for the 2019/20 and later income years. They will not apply to a deduction a person is allowed for a prior income year.

Rental losses can’t be offset against other income

The proposals mean that, for rental properties that make losses, owners will no longer be able to offset those losses against other sources of income such as salary or wages.

However, owners who incur losses on their rental property will be able to carry those forward and use them against future income or profits from that property. Owners with more than one property can also use those losses to offset income from other rental properties.

What property is subject to these rules?

The proposals apply to ‘residential rental property’:

  • land that has a dwelling on it
  • land on which the owner has arranged to build a dwelling, or
  • bare land that may be used to build a dwelling under the relevant operative district plan

What property is NOT subject to these rules?

The proposals do not apply to property that is:

  • used predominantly as business premises, or farmland
  • a person’s main home
  • land subject to the mixed-use assets rules (such as a bach that is sometimes used privately and sometimes rented out)
  • land owned by a widely-held company
  • accommodation provided to employees or other workers because of remote location or equivalent reason
  • land identified as taxable on sale (such as land held in dealing, development, subdivision, and building businesses, and land bought with the intention of resale), provided that:
    – the taxpayer notifies IRD of their rental income and expenditure on a property-by-property basis, or
    – the taxpayer notifies the IRD of their rental income and expenditure on a portfolio basis and all of the properties within the portfolio are on revenue account.

Offsetting rental losses within a portfolio

If you own more than one rental property, under the proposed new rules ring-fencing of deductions applies on a portfolio basis. Essentially that means you can offset deductions for a specific rental property against income from other rental properties in your portfolio. You can also offset losses against income from the sale of residential property if it is taxable (for example under the bright-line test) to the extent of bringing the gain down to zero. After a property is sold, any unused deductions would continue to be ring-fenced and carried forward to be used against future residential income or offset against other residential lands that are taxable. However, if all of the property within the portfolio is sold and was taxable on sale, any unused deductions at that point can be used to offset against other income (including wages or salary).

If you don’t want to proceed on a portfolio basis, you can elect to use a property-by-property basis.

Offsetting rental losses property-by-property

If you want to offset deductions for a specific property against future income or taxable gain from that same property, you must elect to do so. You do this by notifying the IRD in your income tax return that you are applying the ring-fencing rules on a property-by-property basis. The 2019/20 income year is the first year you will be able to do this. For any property acquired after that, the election to use the property-by-property basis must be made in the relevant tax return in the year the property is purchased.

If you use the property-by-property basis, you must set out income and deductions relating to each specific property in your returns to Inland Revenue. When the property is eventually sold, at that point any unused deductions can be used to offset other income (including salary or wages).

Transfer between companies in a wholly-owned group
Where you own multiple companies, and those companies’ assets include residential property, it will be possible to transfer rental losses from one company to another. The deduction would only be able to be used by the transferee company with regard to residential rental income (or the sale of residential land that is taxable). Note that the companies must belong within a wholly owned group.

Interposed entities

Some businesses do run complex entity structures involving companies, trusts or partnerships alongside the actual people at the heart of the business.

The people drafting the ring-fencing proposals saw early on that some investors would try to be clever by separating losses and income into separate business entities.

For instance, where a person takes out a loan to buy shares in a company that then buys a residential property, in theory the person could claim deductions on the interest because the loan relates to investment in shares rather than buying a rental property. The person could then offset those deductions against other income (such as salary or wages).

This loophole for so-called ‘interposed entities’ has been closed with provisions for ‘residential land-rich entities’. The proposed rules for interposed entities apply not only to companies, but also to trusts, partnerships and look-through companies.

Our Recommendation

The proposed new rules are horribly complicated in the fine detail and have some way to go before they are actually law. We will stay in touch with you about it. In the meantime, don’t hesitate to contact us if you:

  • want to discuss likely scenarios for your current rental investments
  • are thinking about buying or selling rental property
  • will be arranging finance or refinancing your rental property

Call us on (06) 878 8824.

Facebook: Why your business needs it (and how to use it!)

Are your ideal customers adults? Then your business needs to be on Facebook because that’s where their eyeballs are.

Time-poor or don’t have a clue where to start? Get some answers with these six most frequently asked questions.

85% of Kiwi adults are on Facebook and using it for at least 30-minutes every day.

1. Why should my business be on Facebook?

Facebook is the most cost effective way to promote your small business right now. It’s basically ‘word of mouth’ on steroids. It’s your chance to tell more people about your services and how you can help them – bringing in more enquiries more often.

2. How much do I need to spend?

You can start small by spending $100 a month on Facebook advertising to boost the number of people who see your posts and set up targeted marketing campaigns. Or just post engaging content regularly, which doesn’t cost a thing.

3. Do I need a Facebook expert or can I do it in-house?

If you don’t have the budget to spare to pay someone to do it for you, do it in-house. Find someone within your business who wants to take ownership of it and get them trained in Facebook Ad Manager. Facebook content needs to come from the beating heart of the business so make sure the person looking after it knows the business, your voice and your customers. But remember, they’ll still need you to be involved to make it authentic. You, and your team, need to appear in the content and help create it.

“Just start posting.”

4. My budget is small, what’s something effective I can do myself?

“Just start posting. The secret to social media marketing is consistency,” says Auckland digital marketing coach Andrew Ferdinando. “If you’re consistently posting engaging content, your audience will grow. There are people who have created an audience from scratch, with zero advertising budget, because they create engaging content.”

5. But I’m not a writer!

You don’t have to be – try Facebook Live. The live video streaming means you can use your phone to record yourself discussing something related to your industry, products or services and you’re done. It’s a powerful medium that doesn’t have to be polished.

6. When will I start to see traction on Facebook?

Look at your Facebook results over a 12 month period – not per campaign or post. “It’s not like a print or magazine advert – the benefit comes from long term content,” says Andrew Ferdinando. “You can get fantastic value from Facebook if you post consistently good content throughout the year.”

If you would like to find out more about Facebook and social media training, contact Jodine McIntyre from Social Smarty: jodine@yoursocialsmarty.com

Today’s Apprentice is Tomorrow’s Foreman

Why apprenticeships work so well

With New Zealand’s construction industry going ballistic, a lot of construction companies are looking to hire new staff. Do they stick with their subbies, bring in qualified builders or take on an apprentice? Stefan Cammell, owner of Cammell Projects in Queenstown believes it’s an employer’s responsibility to upskill the next generation and take on apprentices.

“Taking on an apprentice is an investment in the future of your business and the construction industry”

“Taking on an apprentice is an investment in the future of your business and the construction industry,” says Stefan, who’s been building for 20 years. “It’s a win-win. You’re helping train someone young and motivated and they’re picking up how your business operates, the ethics of your company and your systems. When they become qualified they’re a huge asset to your business.”

What makes a good apprentice?

Cammell Projects’ most recent recruit is 26-year-old Heather Scott-Smith, who joined the crew in May 2018 after responding to a Facebook ad.

“I messaged Stef and said ‘I’m a chick, can I apply for the job?’ and he said ‘of course!’, which was awesome because I’ve had some people treat me differently because I’m female,” says Heather, who’s welcomed the move from her hometown of Dunedin to bustling Queenstown.

“Heather is an example of a great apprentice,” says Stefan, who’s brought on six apprentices over the past nine years. “She’s diligent, listens, takes on board information and works hard. That’s what you need to look for when bringing someone on.”

Two years into a four-year apprenticeship with BCITO (New Zealand’s largest provider of construction trade apprenticeships), Heather loves learning something new every day in a supportive working environment. The hardest part of the job?

“The frustrated look on Stef’s face when I don’t understand what he’s talking about!” she jokes. “It’s great to work for someone who wants to do big jobs not little patch ups. We’re both going in the same direction and I want to work for Stef for many years to come.”

Apprenticeships well worth the time and effort

Stefan says he gets a real kick out of watching his apprentices grow and become skilled but admits it’s more than just teaching the nuts and bolts of carpentry.

“A lot of apprentices are straight out of school so you’re teaching them life skills as much as how to be a builder. You’re teaching them how to turn up to work on time, interact with adults, look after themselves… so it’s a guidance role as well.”

A member of New Zealand Certified Builders, Stefan urges business owners to take the teaching role seriously.

“Apprentice training needs to be treated with respect.”

“Apprentice training needs to be treated with respect. Signing off training units when the apprentice isn’t up to standard isn’t helpful to the apprentice or the industry – it undermines the whole scheme. There’s an onus on the builder to make sure their apprentice is getting the training they need and achieving sign off once competent.”

If you are thinking of employing an apprentice and would this to discuss the impact it may have on your business, call us on (06) 878 8824.

What is your Business doing to attract the next Generation?

Gen Z (born after 1995) are tech-savvy, entrepreneurial, out-of-the-box thinkers – people you want on your team.

Here are four ways to attract and retain New Zealand’s next generation of workers.

1. Tinker with your tech

Gen Z live and breathe technology – they don’t know life without it. You’ll need to enable your people to collaborate and communicate in the cloud and on any device as well as provide video calling using FaceTime or Zoom.

2. Keep it simple when you hire

These digital natives suss everything on their smartphones, including jobs. Keep your job ad short and sweet, make it easy and fast for people to apply and include a short video of your office or a staff testimonial. Invite people to record a one-minute video to introduce themselves and add to their application.

3. Hone in on health

Health and wellness is a top priority but you don’t need a massive budget. From free gym passes, fruit baskets or a healthy lunch shout – staff wellness programmes come in all shapes and sizes.

4. Encourage their entrepreneurial spirit

Gen Z are more likely to look for a piece of the business pie. They understand business ownership and will want to know how their role impacts all facets of your company. Take this seriously and you could be on to a winner.

10 Smart Year-End Tax Tips

The end of the financial year is fast approaching.

Check out our 10 smart year-end tax tips to make sure you are ready come 31 March.

  1. Fill your drawers: Can you stock up on stationery, postage and courier bags before 31 March? Claim now and save.
  2. Staff expenses: If you owe employees holiday pay, bonuses, long service leave or redundancy payments, you can claim for these now – as long as they are paid within 63 days of the balance date.
  3. Can you fix it? If you’ve got any significant maintenance or repairs on the cards, do it before year end and save on tax.
  4. Turn fun into savings: Do you know which entertainment expenses of which you can claim 100%? It’s worth finding out – ask us if you need clarification.
  5. Look at your fixed assets: Do you have any you’re no longer using or don’t plan to use in the future? If so, you may be able to write off the book value.
  6. While you’re at it, check your stock: Look at your stock as well, especially obsolete stock. There may be an opportunity to write some of this off as well – check with us on what could be done in this area.
  7. Income boost: Earned a lot more this year? Consider making a voluntary provisional tax payment.
  8. Logging car use? Remember to jot down your odometer reading at year end and if you’ve kept a logbook of business and personal use, mileage and costs, good work!
  9. Home office: It’s also a good time to review what home office expenses may be available for deduction, especially your home office. We can help with calculating this.
  10. Saving time saves money! Accountants are required to ask for information to comply with anti-money laundering obligations plus the IRD may ask you, via your Accountant, for extra information in relation to your end of year tax. Having your identification and tax documents collated and correct saves your accountant time, which saves you money, so get started this week.

If you have any questions as we approach the end of the financial year, call us anytime on (06) 878 8824.

What’s New in the World of Tax?

It’s important to stay on top of your tax obligations, especially if you don’t have a great team like Epplett & Co. helping you plan and manage your personal and business financial interests.

Here are the latest updates in the world of tax:

Payday filing

We have mentioned this in the past, but don’t forget payday filing for employers is compulsory from 1 April 2019. Please contact us if you need any help with complying with the new process and rules.

No more cheques for IRD

Do you send post-dated cheques for tax payments? It’s time to go digital!

From now on you’ll need to use online banking to make future-dated payments as the IRD no longer accepts post-dated cheques. Plus, if you’re one to put your tax payments in the Inland Revenue’s dropboxes, you’ll now have to head to an IRD office reception area during office hours to do so.

Writing off bad debt?

If you’re expecting a tax break from writing off bad debt, you may also expect to hear from the IRD asking you to prove the debt is, in fact, bad. A new ruling means the IRD could request evidence of any steps you took to recover the debt (before writing it off) and proof there is no reasonable likelihood the debt will be paid. So, get your paperwork in order!

If you have any questions about these updates or would like to discuss your own tax obligations, call us anytime on (06) 878 8824.

Minimum Wage Increase – 1 April 2019

More than 200,000 New Zealanders and their families will benefit from the New Zealand minimum wage increase to $17.70 an hour on 1 April 2019. This is an increase of $1.20.

The starting-out minimum wage and training minimum wage rates will increase from $13.20 to $14.16 per hour (remaining at 80% of the adult minimum wage).

The Government has also set indicative rates of $18.90 from 1 April 2020 and to $20 from 1 April 2021. These rates will be subject to each year’s annual review.

To find out more about the minimum wage increase, head to the Ministry of Business, Innovation and Employment website or call us anytime on (06) 878 8824.

It’s Time to Gear up for Payday Filing

Hundreds of Kiwi business owners are enjoying the benefits of payday filing – are you? If not, you’ll need to be by 1 April when payday filing becomes compulsory. Now’s the time to work out how you’re going to integrate it into your payroll processes and save time on your tax obligations.

Payday filing means you need to:

  • File employment information every payday instead of an Employer monthly schedule (IR348).
  • Provide new and departing employees’ address information, as well as their date of birth – if they have provided it to you.
  • File electronically (from payday compatible software or through myIR) if your annual PAYE/ESCT is $50,000 or more.

Remember, the due date for payment remains the same at the 20th of the month (or 5th and 20th of the month for twice-monthly filers).

How do I payday file?

There are three ways to file electronically – direct from payroll software, file upload from myIR or onscreen via myIR.

How do I shift over to payday filing?

  1. Review your payroll processes and plan and schedule when to shift.
  2. Ask your software provider when they’ll have payday filing compatible software (Xero and MYOB already do).
  3. If you’re using myIR to file, let the IRD know you’re switching to payday filing in myIR.

If you need clarification on payday filing, call us on (06) 878 8824.

Hiring? Look for Traits not Talent.

Soft skills are the personal qualities that make people easy to work with and they are key for business success.

Here are six important soft skills and the best open-ended interview questions you can ask to help find out whether a candidate is right for your business:

Communication

Give me an example of when you had to deal with a difficult team member. What did you do to communicate properly?

Adaptability

Tell me about a time when you were asked to do something for the first time. How did you react? What did you learn?

Culture fit

What three things are most important to you in a job?

Collaboration

Tell me about a time when you had to work with someone who was difficult to get along with. How did you handle interactions with them?

Time management

Describe a time you fell behind schedule. What went wrong and what would you do differently next time?

 

If you would like to discuss your plans for hiring or expanding your team with a trusted advisor, call us on (06) 878 8824.

How Cyber-Secure are you?

Blackmail, extortion and identity theft might sound like something straight out of a blockbuster movie but cyber crime is not only a reality, it’s on the rise and research shows the average Kiwi business isn’t prepared.

Is New Zealand really under threat? We’re so far away!

Unfortunately ‘out of sight, out of mind’ doesn’t apply to cyber criminals. More than a quarter of Kiwi businesses surveyed in 2017 faced a cyber-attack in the previous year, placing us eighth in the league table of 37 countries surveyed.

What can happen if I’m attacked?

Cyber security threats, which include data breach, insider threat, cyber bullying and more, can mean facing larger financial loss from reputational damage, theft of customer details and intellectual property, and infrastructural damage.

How much protection do I need?

It can be as simple as switching on two-step verification on your email but if you rely on sensitive data or store personal information about staff and customers, you’ll need to do more. Being proactive could mean software updates, setting up logs, using cloud services (if you’re not already) and securing devices.

Unfortunately, it’s not a question of ‘if’ but ‘when’ your business will be attacked, so take action to protect your business. To find out the best way to keep your business safe in 2019, give us a call on (06) 878 8824.

The Domestic Violence – Victims’ Protection Bill

Have you heard about the new Domestic Violence – Victims’ Protection Bill?

Here’s what it means for you.

FACT: New Zealand police respond to 270 domestic violence incidents every day and it’s estimated that’s only the tip of the iceberg – with 80% of incidents going unreported.

FACT: Did you know domestic violence already costs New Zealand workplaces at least $368 million a year due to higher turnover and lost productivity? Addressing the problem directly will be better for business and victims of domestic abuse.

Imagine trying to work while juggling court, counselling, and your family’s needs following a domestic violence incident. This is the situation for thousands of Kiwis, but it’s set to improve with the new Domestic Violence – Victims’ Protection Bill coming into effect on 1 April. The law enables people affected by family violence to apply for specific leave and flexible working arrangements to help them keep their jobs during a challenging time.

What does this mean for you?

Local companies such as Countdown, The Warehouse and ANZ already offer domestic violence leave – and it’s time for the rest of the country to follow suit. As an employer, you need to be aware of what leave and flexible working arrangements victims of domestic abuse are entitled to, what you have to do, and how to support your staff.

10 days’ domestic violence leave

Employees will be able to apply for up to 10 days’ domestic violence leave per year to deal with the effects of domestic violence, such as court appearances, doctor visits and looking after children.

  • Employees need six months’ continuous employment to be entitled to this leave and entitlement does not accrue from year to year.
  • Staff don’t need to provide proof they have been affected by domestic violence, but employers can ask for proof before agreeing to the request.
  • If an employee fails, without reasonable excuse, to provide proof, their employer isn’t required to pay for any domestic violence leave.

More flexibility at work

To support staff affected by family violence, you are required to provide flexible working conditions, such as changes to:

  • The location of their workplace
  • Their duties at work
  • The extent of contact details the employee must provide to their employer
  • Any other term of employment that needs variation to enable the employee to deal with the effects of domestic violence.

Stay open-minded and make a plan

Now’s the time to think about how you’ll approach requests for domestic violence leave. It’s a good idea to put together a practical plan to ensure you respect and protect your staff members’ privacy throughout the process. Keep in mind you could get requests for leave for a range of reasons including physical, sexual and psychological abuse, harassment, threats, intimidation and financial abuse.

If you need help putting together a plan, please call us on (06) 878 8824.

Checklist: Can your Business Survive the Holiday Period?

While the Christmas/New Year period is traditionally a slow time of year for business, you still need to meet your expenses.

Ensure your bases are covered before you clock off for the year.

1. Plan ahead

Do a budget to figure out how much you are going to need to cover your overheads. This is especially important if it’s going to be several weeks before you start earning a crust again.

A cashflow forecast will help you identify any issues before they become problems.

2. Get your cashflow in order

You can achieve this by:

  • Prioritising jobs you can complete quickly so you can invoice clients straightaway.
  • Incentivising early payment for completed work by offering a discount.
  • Chasing outstanding invoices.
  • Seeing if you can re-negotiate payment terms with suppliers.
  • Reducing unnecessary spending.

3. Don’t forget taxes

IRD expects GST and provisional tax payments to be made on 15 January 2019. Interest of 8.22% and late payment penalties apply if you don’t.

Here’s a tip: If paying both is going to hurt the bank account, prioritise paying the GST. You can utilise the services of an IRD-approved tax pooling provider such as Tax Management NZ to pay the provisional tax later. They reduce IRD interest by up to 30% and eliminate late payment penalties.

As always, we’re happy to work with you so you have nothing to worry about while you enjoy your summer break. Feel free to give us a call on (06) 878 8824.

Managing Entertainment and Gift Expenses for the Festive Season

How to enjoy all the bells and whistles without the tax headache

Parties and gifts are all part of the festive fun but they can cost a small fortune.

Here’s a list of the rules around entertainment expenses so you know what’s deductible and non-deductible before you fork out for your staff and customers.

  • To claim 100% of your customer gifts, keep it non-food or drink related. Book vouchers, tickets to a sports match or a personalised calendar as these can be claimed in full.
  • Got a staff party planned? Half of your food, drink, entertainment and venue hire can be claimed in your GST and income tax returns.
  • You don’t need to pay Fringe Benefit Tax on entertainment expenses (that come under the 50% deductibility rules) unless it’s being enjoyed by staff outside of their work duties.
  • Heading to Aussie for a fun-filled weekend with your staff? It’s 100% deductible (and they’ll love you for it!)
  • If you’re giving customers and staff food and wine for their efforts you can claim 50% as a business expense.
  • Donating to charity this Christmas? You can deduct 100% of the cost of entertainment you provide to members of the public for charitable purposes.
  • If you’re taking your family (who don’t work for you) out for brunch to thank them for putting up with your long hours… it’s not deductible because it’s not related to generating income for your business.
  • Taking the team out for lunch? Ordering in a Christmas feast? You can claim 50% as a business expense whether you’re out of the office or on-site.
  • Top tip: If you run out of time to organise Christmas gifts for customers, why not surprise them with a ‘Welcome back to work’ prezzie in the New Year?

Remember to keep your invoices and receipts for business entertainment expenses. If you have any questions about what’s deductible and non-deductible, give us a call on (06) 878 8824.

Pre-Christmas Business Health Check

Do your Christmas housekeeping!

The festive season can be a hectic time for businesses. Here is our pre-Christmas checklist to keep things on track during the silly season:

  • Chase up unpaid invoices to encourage payment before Christmas to get cashflow off to a good start for the New Year.
  • Make sure your voicemail message and website mention closing date info and emergency contact details. Who’s responding to work related emails while you’re on holiday?
  • Is payroll all set up for the holidays? Don’t leave it till the last minute and double check your calculations.
  • Shutting the doors over Christmas? Remember to give staff 14 days’ notice.
  • Back up your client and financial data on all IT systems and run any anti-virus updates.
  • Feeling hectic? Make the workplace more relaxed in the lead up to Christmas by decorating the office, organising a Secret Santa, playing festive music or letting staff dress more casually in the final few days.

Holiday Cashflow Blues

Many businesses start to worry about their bank balance around now. The holidays looming recall unpleasant memories of last year. All the regular expenses (wages, rent, suppliers and so on) are still due, but the people who pay you are either away on holiday or slow payers awaiting payment themselves.

Instead of a relaxing break the holidays can be filled with stress. The brutal facts are that December/January are the worst months for slow paying clients.

These are “holiday cashflow blues”.

The classic symptoms:

  1. The staff who monitor and manage cashflow take holidays, leaving you feeling you are flying blind.
  2. You don’t receive expected in-bound cash but must cover regular outbound monthly payments.
  3. Your overdraft isn’t enough to cover all your payments but key bank staff are also unavailable to negotiate an increase.

A clear and concise cashflow strategy is so important to keep your head above water these holidays. It may also improve your business’ cashflow for the whole year ahead.

5 steps from smartAR.com:

How to avoid the cash flow blues this Christmas

  • Issue new invoices early. Some businesses only invoice at end of month. Instead, during Nov/Dec/Jan, try invoicing on a weekly or even daily basis.
  • Offer flexible payment options, including fee funding if possible.
  • Early payment discounts may be cheaper and less hassle than an “unarranged” bank overdraft or high interest credit cards.
  • Call all your debtors. If no one in your business does this (or does it well), consider outsourcing to a dedicated accounts receivable specialist to improve payment speeds.
  • Prepare a 3-month budget before the holidays. If it indicates a cash shortfall, talk to your suppliers and other creditors in advance. They will appreciate the communication instead of unreturned calls and avoidance behaviour.

And… enjoy the beach!

If you would like us to help you with your holiday cashflow blues, get in touch on (06) 878 8824 or via our contact form.

Grow with the (Cash) Flow

Steady cash flow is the fuel that powers your business, but when you’re busy doing a million things at once it can easily slip to the bottom of the priority pile. Here are some tips to keep the cash flowing while you’re growing:

  • Invoice quickly – good debtor management is crucial, so send invoices quickly, ensure your payment terms are clearly outlined and offer discounts for prompt payment.
  • Make it easy – whether you offer mobile, online, credit card or modern POS payment options, make it simple for customers to pay you.
  • Take advantage of technology – ditch the paper and take advantage of cloud accounting.
  • Be one step ahead – use cash flow forecasting to outline your expected income and costs.

If cash flow is king, forecasting is queen – and making informed estimates doesn’t have to be confusing.

Give us a call (06) 878 8824 to chat through your objectives and we’ll help you develop a valuable, detailed and easy to digest profit and cash flow plan so you can confidently stay on track as you grow.