Dellow Financial Services
|Posted on 23 June, 2019 at 0:50||comments (0)|
Start Preparing for 2019 Year End
As the end of the financial year approaches, it always pays to spend a little extra time examining your financial records and considering ways to increase your after tax income.
There is a high chance that you will find a couple of extra savings. It is also a good time of year to reflect on your financial position, and think about goals.
Here are a couple of our top tax tips for preparing for the 2019 end of financial year:
Prior Year 2018 Taxes Are Due
Ensure 2018 tax returns have been filed with the IRD as they are due on 31 March 2019.
Write off bad debts
Businesses with outstanding amounts owed, no matter the size, that are unlikely to be recovered in full should consider writing these off as bad debts. Bad debts can be used as a tax deduction, effectively reducing your taxable income for the relevant year.
By pre-paying for tax deductible expenses before March 31, you will be able to minimise your tax bill. Some categories of business expenses can be pre-paid. Examples include stationery, vehicle registration, and accounting.
Split business income
In some circumstances, it may be possible to minimise your tax liability by redistributing the flow of income from your business. For example, if your partner is a low income earner, it may be advisable for you to split the business income with them. It may also be possible for you to redirect some of your income towards your children. This should be planned prior to your end as there are rules around how this can be done. Please call to discuss.
You are able to claim a deduction for a discount reserve, for example a discount for speedy payments, if your debtors are traditionally entitled to this discount.
Trading stock valuation
Trading stock must be valued using a cost valuation method, unless the market selling value is lower than the cost. It is very important to value your stock at 31 March each year, where the stock is worth less that the cost price this should be recorded.
Bonuses and holiday pay
It is possibly to claim amounts payable to your employees as a deduction for the current financial year, so long as the full amount is paid to the employee within 63 days of the balance date. This may include bonuses and holiday leave paid within 63 days of 31 March.
|Posted on 23 June, 2019 at 0:45||comments (0)|
Spinach are NZ's friendliest business lending specialists. We focus only on business lending and can help with secured loans for just about any situation. Call us today, we won't tie up your family home to get the finance your business needs.
https://spinach.co.nz/business-loans/asset-finance/" target="_blank">Link here
|Posted on 23 June, 2019 at 0:40||comments (0)|
Dellow - GST Tips
Tax minimisation is extremely important to us.
Please review our GST tips and take a minute to consider if you would like a GST review.
1. Registering for GST too early or too late
For a new or small and growing business, deciding when and whether to register for GST can be tricky.
If your customers are private individuals and you register too early, you might be voluntarily giving up thousands of dollars.
If, on the other hand, your customers are GST registered, you could register to get the GST back on your outgoings.
Register too late, and surprise surprise, the Inland Revenue may impose penalties and interest.
2. Claiming GST on overseas transactions and unregistered suppliers
GST can’t be claimed on services and products sourced from overseas suppliers.
Often, these types of errors are unintentional and simply overlooked.
For instance, goods or services purchased through online companies such as MailChimp, iTunes, Facebook, or Google Apps are from overseas suppliers and cannot be claimed.
To be safe, check your invoices and receipts to see if NZ GST has been charged.
Keep in mind as well that many smaller businesses and subcontractors are not registered for GST, which means it cannot be claimed.
3. Buying assets or equipment that may be used for personal purposes
When you’re purchasing assets or equipment for business use, you may claim a GST deduction, but the amount you can claim may vary depending on whether you are a company, sole trader or partnership.
Where the asset is to be used 100 percent for business purposes, it is normally fully deductible regardless of your trading structure.
However, where there is private use, such as with motor vehicles, sole traders and partnerships must make an adjustment to the GST claimed for the expected private use component.
When a company is involved, you can normally claim all the GST, but you will need to pay some GST on every future GST return to compensate the Inland Revenue for that private use.
4. Leasing and hire purchase
If you’re buying assets or equipment using asset finance, getting the GST correct often causes problems.
If you’re taking ownership of the assets or equipment (or if there’s an option to take ownership), you can claim all the GST up front (subject to any private use above).
But if you just have the right to use the assets or equipment for a limited period, the GST is claimable on each payment.
There are all sorts of leasing deals out there, so watch out because when it says it’s a lease, it may not be. Also be aware because sometimes GST only applies to part of the regular payment.
5. Introducing "second-hand/private goods" to your business
When you buy a second-hand item for business, you can generally claim the GST even if the vendor isn’t GST registered.
If you’re the vendor (for instance, if you are selling something to your company or you’re buying from a related party), there are complex rules to prevent you from gaining what Inland Revenue would consider to be an unfair advantage. Deductions are available for these good being introduced to the GST "pool" and should be pursued.
If you prepare your own GST Returns there may be some value in ensuring everything you are entitled to are being claimed.
Recently we have noted several builders, plumbers, and mechanics that appear to have very few tools on their fixed asset schedules.
Often an adjustment is required for existing assets introduced to the business on start up. This can be significant - more here
6. Home Office Expenses
To calculate your GST adjustment you need to work out the percentage of the area that is used for work against the total area of your home.
The table below explains how to calculate an adjustment for home office expenses and provides an example.
Scenario: Erana has an office set aside in her private home. The office is 10 square metres of a 100 square metre house. Therefore, the business percentage is 10%.
The total house expenses including GST for the taxable period were $1,000, including:
insurance (house) $200
Step 1 Work out the value of the business (taxable) use.
$1,000 x 10% = $100
Step 2 Multiply the amount from Step 1 by 3 then divide by 23. This is your GST adjustment. Transfer the totals to Box 13 on your GST return. 100 x 3 divided by 23 = $13.04
|Posted on 23 June, 2019 at 0:35||comments (0)|
Weekly IRD Filing for Employers
Businesses can choose to report payroll information every payday instead of monthly.
Payday filing is compulsory from 1 April 2019.
Dellows has a number of payroll solutions. Our preferred third party provider is https://thankyoupayroll.co.nz/" target="_blank">Thankyou Payroll.
Thankyou payroll is free for businesses with under 3 staff, and $19pm for business with 4 - 10 employees. Thankyou payroll direct debit from your business account, then pay all staff, send payslips, and file and pay the IRD meeting all tax compliance requirements.
Thankyou payroll links to Xero and overall saves a lot of time and is a very well priced solution.
|Posted on 23 June, 2019 at 0:30||comments (0)|
Lets plan in 2019, to realise your financial and business goals, a good place to start is a clear plan. "Now" "Where" and "How" (where are you now.., where to you want to be.., and how are you going to get there..). Assign responsibility "who" will do these things and set a date "when" will they be done.
Dellows has specialised planning software MYOB Profit Optimiser. We can analyse your business, and explore strategies, make forecasts, and set goals, all at the touch of a button. Financial Diagnostics, health checks, and various other add-ons are available to Dellow clients.
https://www.business.govt.nz/search?Search=business+plan&searchlocale=en_NZ&form_source=head&action_results=Go" target="_blank">Link to Additional Resources
|Posted on 30 March, 2019 at 14:35||comments (0)|
We have a great offer available for Sovereign Life Insurance.
Get 10% off the life of your policy with Sovereign Life + one offer.
You can now get 10% off your new Sovereign policy when you take out Sovereign Life Cover with one other new Sovereign TotalCareMax risk-benefit. And this discount will apply for the life of your new policy.
Take advantage of this Sovereign ‘Life + one’ offer today and make sure you have the cover you need for the peace of mind you want — and with the money you save, invest it elsewhere or enjoy spending on life and leisure, family and friends!
This offer will be available until 31 May 2019.
Simply reply to this email and I’ll contact you with an email fact finder, followed by a no obligation quote, so we can discuss the best options for you.
We may be able to reduce ACC Cover via CPX to allowing for contributions to income protection, significant savings, and additional benefits. Airpoints are available @ AP$1 for every $100 spent on premiums.
Kind Regards, James Dellow