If you’re an employer watch out, there are important changes which took place on 1 April 2013.
KiwiSaver Contribution Rate Increase
The minimum contribution rate for employers and employees will increase from 2% to 3% of gross salary or wages from the first pay period starting on or after 1 April 2013. The changes will affect your payroll calculations and the details you enter on your Employer monthly schedule (EMS).
Primary and Secondary Schoolchildren
As part of the Government 2012 Budget, the tax credit for children was repealed from 1 April 2012. This tax credit covered the tax on the first $2,340 of income from employment for employees under 18. If you pay salary/wages or schedular payments to schoolchildren, you must now deduct tax and record their details on your EMS. If your employee or Inland Revenue request you to, you will also need to deduct KiwiSaver employee contributions for existing KiwiSaver members under 18 years of age. You don’t need to make employer contributions.
Employees under 18 are not subject to automatic enrolment.
ML And ML SL Tax Codes Can No Longer Be Used
PAYE should be deducted using the M or M SL rates from 1 April, unless the employee provides a new Tax code declaration (IR 330).
Tax Code Declaration (IR 330).
These have all changed, so throw all the old ones away and order some new ones from the IRD.
Student Loan Repayment Rate Change
The repayment rate for standard student loan deductions will increase from 10 cents to 12 cents.
What This Means for You.
Your old PAYE tables are of no use, so if you’re still in the Dark Ages get some new ones. If you’re using payroll software, this needs updating.
Perhaps it’s time you used an expert to process your payroll, it’s cheaper than you think!
Retirement is the last thing you worry about when you’re young and carefree. However, as the years pass by quicker and quicker, you begin to realise that perhaps you need to put some serious thought into it, especially if you plan to retire at a reasonable age.
But just how are you going to fund your retirement in these days of increased life-expectancy and ever-increasing living costs?
Read the full article on The Pulse
Just like putting a house on the market, selling a business requires careful planning, preparation and presentation, so before you rush off to a business broker or list on Trade Me, stop, think, do some research and (even before you take advice from a decent accountant who’s long been involved in business sales) consider these 8 things.
Read the full article on The Pulse
Many small business owners (even those who’ve been in business for many years) get themselves worked up about GST but it’s generally pretty simple here in NZ providing you keep good business records.
The thing to remember about GST is that it’s NOT your money, it is merely additional monies you’ve collected from your customers and have temporary care of. In return for this duty, you are permitted to claim the GST added to your purchases and costs. How good is that? You are being paid to collect the GST!
Of course that’s easier to accept for those of us who issue sales invoices and then add GST to the value that we’re billing for. For those who charge a GST-inclusive price like retailers and cafe owners it becomes easier to get confused and think that the GST belongs to them, especially when the selling price of the goods or services is set by market forces and would be the same whether you were GST-registered or not.
In other countries (like the UK and India) GST is called VAT or Value Added Tax, the reason being that you are only being taxed on the value you add as the goods and services pass through your business or get created. I think this is a better name as it better explains how it works.
GST is becoming popular across the world as governments love it – easier to collect, hard to avoid, and unlike Income Tax it’s hidden in the cost of what you’re buying.
Business owners complain about their GST bills, but in general, the higher your GST bills, the better, as this means your sales are high in relation to your costs (unless or course say your wage bill is out of control).
With only a very few exceptions you have to add GST to virtually everything you sell and can claim GST on virtually everything you buy or every service you use. The main exceptions on the sales side are:
- Rents on residential property
- Land transactions (but watch out for the necessary conditions)
- The sale of a business as a going concern (likewise watch out for the required conditions)
On the outgoings side watch out for:
- Bank fees and interest
- Suppliers who are not GST registered.
Now there are some complicated areas, like for example on entertaining where its 50% claimable, assets used privately or where you sell both GST-able and non-GST-able items, so you will need to seek help with these.
Going back to good business records, many and varied are the ways that people try and account for GST. These range from third-hand corrupt spreadsheets which don’t add up, to adding up the ins and outs on their bank statements to using 10 year old accounting software which still calculates the GST at 12.5% but there’s no substitute for some simple to use, cheap accounting software. The software I find business owners get to grips with quickest is Banklink – no accounting knowledge required, very cheap, and very easy to use.
The end of financial year brings a lot of extra work as well as some potential trouble if you don’t go about it the right way. To avoid that trouble, there are 6 things that you can do now to ensure a smooth end of year for you and your accountant.
Read the full article on The Pulse
With the end of tax year just around the corner, here a few things that you can do now to minimise your bill and a few things that you absolutely need to know before you start working on that return.
As we know fashion is a huge driver for change, both in our personal lives and in business. Consider, for example, iPads, which became a must-have business travel accessory even though, in comparison with a laptop, they are very much deficient as a useful business tool if you actually want or need to do some work whilst you’re away. There is also cloud accounting software which, whilst very useful in the right circumstances, does have some downsides in comparison with Desktop software.
The plus side of cloud accounting, in bigger firms (assuming all your software is in the cloud) you may be able to do away with your server or servers, and for businesses of any size there are no problems with back-ups or updates and you are able to access data and work anywhere where there is internet and as well as being able to share access in different locations. On the down side, you will normally pay more, it may be slower, your internet connection may be poor (or non-existent) and the software may not include many of the features we take for granted with traditional desktop software e.g. inventory systems, which has been constantly developed and improved over many years.
It was very interesting then when MYOB launched their new version of AccountRight Live at the end of last year which enables you to work both on and off-line with the system “synching” when you go back on-line (so that any changes made on whilst off-line are adopted on-line). And of course it wasn’t just being cloud-enabled that was a huge advance with AccountRight Live as it also introduced automated bank feeds into the mainstream MYOB accounting software for the first time, an extremely useful and necessary feature and well overdue.
Rather than me talk about this more, there is an excellent post on the MYOB blog, which explains in depth how it all works. So congratulations to MYOB for an innovative solution and let’s hope any initial teething problems are quickly resolved. Sometimes change is useful and not just driven by fashion!