Hugh's Views
Checklist for year end 2009
Independent Earner Premium
Charity Golf Tournament
Help us to help you with Annual Accounts
Can't pay tax on time?
Day at the Lake
Disclaimer
HUGH’S VIEWS
Hard to believe that another year is a quarter gone. Mind you take out all the holidays etc and we really only have two months.
We have been busy though.
Some of you will have received an invitation to complete a Business Needs Analysis questionnaire giving you the opportunity to have a look at your business and where you are at with it. We are just completing reviewing the first “wave” of responses and will be following up on those clients we haven’t heard from. This is a good opportunity to have a self review. Bit like taking your pulse. And of course it doesn’t cost anything to complete. If you haven’t received one and would like to complete the exercise (or if you have misplaced the one you were sent) let Ellen know at reception and she will arrange one to be forwarded.
Central Otago is managing to avoid the worst effects of the downturn, although you will be aware of some job losses in the area. If we put these losses in perspective to our population basis we are doing pretty well although I think there are still some “adjustments” to come. It was pleasing to read last week that the Central Otago District led the way with respect to Economic Growth in the country. I’ll bet not too many people had picked that.
As part of an education process to help clients have a look at their business activities given that we are in for a period of more difficult times, we have put together a presentation “Doing Business in Challenging Times”. The purpose of this is to help business owners recognise the signs of distress in their business and some suggestions on what can be done to assist you through the difficult trading period that we are facing and also to look for opportunities to improve the performance of your business. Probably just as importantly you might be able to recognise some early warnings amongst the people you are trading with. The last thing anyone needs is being dragged down by a bad debt. We are proposing to hold this on Wednesday the 22nd of April at 5.30pm. Please call us, if this is something that you would be interested in attending.
Balance date questionnaires will commence being sent out in early April. This year we intend scheduling ahead for jobs to come in so we get all the information at the start and we can then get each job completed as quickly and efficiently as possible.
If you are struggling with cash flow then it’s a really good idea to get to know your bank manager (if you don’t already know them). Keeping in touch and letting them know that you are going to stretch your arrangement from time to time will get the bank onside with you and trying to help. Ignore your bank at your own peril. Continuing to exceed your arrangement without discussing it will likely get you on their default list which could be the start of a slippery slide!!
Our inaugural Golf Day with Macdonald Crawford, Spicers and Mike Pero was a great success. The weather held together for us and as far as I know everyone enjoyed themselves. We were able to present Colin and Helen Pledger a cheque for $500 to add to the Team Tarras contribution to the Cancer Society’s Relay for Life fundraiser at Cromwell the next day. It was pleasing to see that Team Tarras were the top fund raising team with around $13,000. It was great to be a small part of that.
Hugh
Extension of time arrangements
31 March 2009 is the last day for 2008 tax returns to be filed under extension of time arrangements (EOTs). If your 2008 return is not filed in time you risk losing your EOT and may incur a late filing penalty which could be between $50 and $500.
Holiday pay and bonuses
Employee benefits, like holiday pay and bonuses, owing at 31 March can be claimed if paid by 2 June. Bonuses must be finalized before 31 March to be claimable.
Stock
Stock takes are required unless your stock is less than $5,000 and your turnover is less than $1.3m.
Bad debts
Bad debts must be written off before 31 March to be claimed. Make sure you have clear evidence of steps taken and write off. Accounting entries must also be made.
Tax Rate Changes
From 1 April 2009 the tax rates and thresholds for individuals are as follows:
Thresholds Tax Rate
| $0 - $14,000 | 12.5% |
| $14,001 - $48,000 | 21% |
| $48,001 - $70,000 | 33% |
| $70,001 and over | 38% |
KiwiSaver
From 1 April 2009, the compulsory employee contribution for KiwiSaver has been reduced from 4% to 2%. As a consequence, employer’s contributions were also reduced so that they only had to match the employee contributions to a compulsory maximum of 2%. Employers can continue to match contributions at a higher level but will pay additional tax. Employers will lose their tax credit on compulsory contributions. The $40 fee rebate has also been abolished.
Minimum Wage
From 1 April 2009 the minimum wage increases from $12.00 per hour to $12.50 per hour.
“New Entrant” employees minimum wage increases from $9.60 to $10.00 per hour.
Use of Money Interest (UOMI) - Effective 1 March 2009
Individuals who have a residual tax liability (RIT) of less than $50,000 (increased from $35,000) are not subject to UOMI.
UOMI rates for under and overpayments have dropped to 9.73% and 4.23%, respectively (down 14.24% and 6.66%).
INDEPENDENT EARNER REBATE
A NEW tax rebate has arrived. It is for middle income earners who do not get any form of government assistance.
From 1 April 2009, the Independent Earner Rebate will be $520 per year. Anyone with an income in the range $24,000 to $48,000 will qualify so long as they are not receiving any State assistance, including New Zealand Superannuation and are not entitled to receive Working for Families (WFF).
Their relationship partner must also not be entitled to WFF, but can get the other forms of State assistance including New Zealand Superannuation.
The rebate starts to abate from $44,000 at 13 cents in the dollar and disappears at $48,000.
The rebate will increase to $780 from 1 April 2010.
You might be getting State assistance or be entitled to WFF for part of the year. The rebate is available for every complete month in which you qualify for it.
CHARITY GOLF TOURNAMENT
M&A, Spicers, Macdonald Crawford & Mike Pero held their first Charity Golf Tournament on Friday the 6th of March. The weather was good to us, and throughout the day, we managed to raise a total of $500 to put towards Team Tarras’ fundraising efforts for the Cancer Society’s Relay for Life that was held in Cromwell on the same weekend. Thank you to all who participated. We look forward to doing it all again next year.
HELP US TO HELP YOU WITH ANNUAL ACCOUNTS
WHEN we prepare your annual accounts, two things contribute to the cost – too little information, and too much information.
Too little information
Each time we need to ask for more information, we put the file aside while you look. This adds to the cost of the job. Ideally, we would like to work straight through your assignment and finish it in one session.
This is seldom possible. However, the fewer questions and quicker your response, the more efficiently we can complete our work.
Too much information
A few clients try giving us everything. This often means a time-consuming search through the papers for what we need. When we cannot find what we are looking for, we will often have another look, just in case, before contacting you.
What to do
Provide all the information requested in our questionnaire and no more. Reduce next year’s queries by keeping a note of our requests for more information, which you can refer to.
Our plea
Please do not give us your processed information unless you have first discussed with us what you are going to produce and we have agreed. If the information we are getting does not fit within our office systems, our work often takes much longer and involves more skilled staff.
CAN’T PAY TAX ON TIME?
IF YOU cannot pay your tax on time, you can arrange for payment in instalments. Set up these arrangements with the IRD before the due date for tax. Note the following:
It is better to consult us before approaching the IRD. We will aim to get an arrangement we feel you can live with.
Use of Money Interest will be charged.
A special arrangement to pay tax is not ongoing. It is specific to the instalment you have been unable to pay. Some clients think, so long as they keep paying the instalments, everything will be OK. This is not the case. The IRD will charge you penalties if you fail to pay on time, taxes which are not subject to the arrangement.
Never renege on your agreement. If you can’t stick to it, consult us and we may be able to vary the arrangement.
For larger provisional tax debts, we can put you in touch with a firm which provides medium term loans so your tax is paid on time.
The interest you will have to pay is usually less than you would pay IRD.
TAX CALENDAR
April 7
2008 Terminal Tax (March balance date)
May 7
3rd Instalment 2009 Provisional Tax - (March balance date)
GST for March 2009
May 28
1st Instalment 2009 Provisional Tax - (December balance date)
GST for April 2009
DAY AT THE LAKE
M&A celebrated the start of the year with a family day at the lake. By the look on some of these faces a good time was had by all.
DISCLAIMER
We don’t claim to know it all, so with that in mind here’s what we’re obliged to say; this newsletter has had input from a variety of sources, people and publications. For all input we are grateful. Grateful and careful. Whenever we can, we do our very best to ensure all the information contained in this newsletter is accurate and timely. If there’s something here you plan to place some considerable reliance on and we haven’t made the implications totally clear to you, get in touch and we’ll clarify it for you.