TOTALACCOUNTING Chartered Accountants

Accounting                               Taxation                                   Business Advice and Development Assistance                                        

 P.O. Box 10 , Clive         133 Main Rd, Clive           Tel. (06) 8700952          Fax. (06) 8700955 

Email murray@totalaccounting.co.nz                                  Website www.totalaccounting.co.nz

 
EMAIL NEWSLETTER APRIL 2016
 

Welcome again to the TotalAccounting Newsletter in which we discuss current taxation and business matters. We trust you find it informative.  

 

NEW CLIENTS

We are happy to accept new clients.  We would be happy to assist colleagues and acquaintances as new clients.

 

INDEX

  1. Did you miss the 7 April Payment Deadline?

  2. ACC Levies

 

DID YOU MISS THE 7 APRIL PAYMENT DEADLINE?

Did you have an Income Tax, Working for Families Tax Credits, or Student Loan Bill to pay for the 2014/15 tax year?

By linking with TotalAccounting and if you have not lost extension of time  your payment was due by 7 April 2016.

Stop more penalties and interest from adding up - pay today!        Pay your bill now

If you have an Income Tax, Working for Families Tax Credit or student loan bill to pay for last tax year, but don't have an extension through a tax agent, your bill was due on 7 February.

Why do I have to pay? What if I don't pay my bill on time? How do I avoid a bill next year?
There are a few common reasons why you might have an end-of-year bill to pay.

If you don't pay your bill on time penalties and/or interest will start adding up.

We have a few options available if you're finding it difficult to pay your bill.

There are a few things you can do to avoid another bill next year.
Find out more > Find out more > Find out more >

 

ACC LEVIES

ACC Levies fund claims for injuries suffered by all New Zealanders. Small business owners pay an ACC Work Levy every year. It’s used to fund ACC claims for work-related injuries. Employers are also responsible for deducting your employees’ ACC Earners’ Levy from their wages. This is used to fund non-work related injuries.

 

 What you pay for your Employees

If you have employees, IRD will deduct ACC Earners’ Levies from their wages as part of their PAYE payments. This Levy covers people for injuries that happen outside of work and not on the road, e.g.  while playing sport or at home.

The amount deducted is based on how much your employees earn.

 Current Levy rates — ACC

Tips and advice on PAYE

Employee Cost Calculator — check the less obvious costs of hiring staff, including ACC Levies

 

What your Business pays

All businesses pay Levies to ACC to cover the cost of work-related injuries. Businesses  pay for:

  • ACC Workplace cover — the Work Levy
  • the residual portion of the Work Levy — to cover the cost of workplace and non-work long-term injuries
  • the Working Safer Levy — this is collected on behalf of the Ministry of Business, Innovation and Employment (MBIE) to support WorkSafe NZ’s activities.

Businesses will receive a provisional invoice with an estimated Levy and a year-end adjustment.
 

How it's calculated

How much your business pays depends on:

  • your business description — this is assigned an ACC classification unit
  • how much you pay your employees
  • your claims history — the number of work-related injury claims your business has made.

You can work out how much your levy is likely to be using  ACC levy calculator.
 

Classification Units

These are used to set levy rates for different industries with different levels of risk.    ACC assigns your business a classification unit based on your Business Industry Classification (BIC) code. This is a code every business and self-employed person chooses, based on their main work activity, when registering for GST or submitting a tax return.

Find your BIC code — Business Industry Classification Code
 

Liable Earnings

Liable Earnings are the part of your payroll that levies are payable on. Things like holiday pay and overtime are liable earnings — but redundancy and retirement payments are not. How much your liable earnings are depends on how much you pay your employees.

 Liable Earnings — IRD

 

 What you pay if you’re self-employed

If you’re not an employer, you’ll be invoiced for ACC levies once a year. You’ll pay for:

  • ACC Workplace cover — the Work Levy
  • the residual portion of the Work Levy — to cover the cost of long-term workplace and non-work injuries
  • non-work injury cover — the Earners’ Levy
  • the Working Safer Levy — this is collected on behalf of MBIE to support WorkSafe NZ’s activities.

This is a percentage of your annual income.

 ACC levies if you’re self-employed — ACC

 Current levy rates — ACC

 

 How to reduce your ACC Work Levy

ACC has an experience rating programme that takes your claims history into account when it calculates your Work Levy.  If you have a lower than average injury rate, with a better than average rehabilitation or return to work rate, you may receive a discount.

 How to pay less - ACC

 Your Invoice

You’ll usually get your first ACC levy Invoice after the end of your first year in business. After that, you’ll be invoiced once a year, usually in July for businesses or August for the self-employed.

You'll get:

  • Provisional Levy Invoice for the current year — this is an estimate based on your previous year’s liable earnings and any wages or salaries you expect to pay in the coming year.
  • Levy adjustment for the previous year — if you paid less than you should have for the previous year, ACC will send you an Invoice for the difference. If you paid more, you’ll get a credit applied to your account.

If your circumstances change, eg your main work activity changes or you stop trading, ask ACC to reassess your levy calculation. Fill in an  ACC4618 form and send it to ACC as soon as possible.

You’ll need to pay your Levy by the due date on the invoice — even if you’re waiting for a reassessment.

 How to pay

You can pay:

  • online via internet banking
  • online via credit card (a service fee applies)
  • by direct debit, as a one-off payment or in installments
  • by posting a cheque
  • by cash, cheque or Eftpos at any PostShop.

 Pay your ACC levy — ACC

 

Common pitfalls

Avoid these common levy pitfalls:

  • Not budgeting for your Work Levy. Use ACC’s levy calculators to get an estimate — it’s worth regularly setting money aside in a savings account to help cover the cost.
  • Not paying your Invoice by the due date — you’ll be charged interest and may face a penalty for late payment.
 

 

TOTALACCOUNTING KNOWLEDGE CENTRE AND ARTICLES ABOUT TAXATION AND BUSINESS IN GENERAL PRESS HERE FOR BUSINESS STARTUP KNOWLEDGE CENTRE PRESS HERE
FOR INFORMATION ABOUT COMPANY INCORPORATION PRESS HERE FOR PREVIOUS MONTH EMAIL NEWSLETTERS PRESS HERE

FOR PROPERTY INVESTMENT AND TAX INFORMATION PRESS HERE

FOR FRANCHISE INVESTMENT AND TAX INFORMATION PRESS HERE


The information provided in this email newsletter is for informational purposes only.   TotalAccounting accepts no responsibility for the opinions and information expressed in the information provided and it is provided "as is" without warranty of any kind.    The user assumes the entire risk as to the accuracy and use of this document.   Readers are asked to seek professional advice pertaining to their own circumstances.    The TotalAccounting email newsletter may be copied and distributed subject to the following conditions:
  • All text must be copied without modification and all pages must be included.
  • This document must not be distributed for profit.    

 

If we can assist further, please email TotalAccounting as follows:

 CONTACT TOTALACCOUNTING BY EMAIL BY CLICKING ON THIS LINK

BACK TO HOME PAGE

ACC levies

ACC levies fund claims for injuries suffered by all New Zealanders. As a small business owner, you’ll pay an ACC Work Levy every year. It’s used to fund ACC claims for work-related injuries. You’re also responsible for deducting your employees’ ACC Earners’ levy from their wages. This is used to fund non-work related injuries.

On this page:

 

What you pay for your employees

If you have employees, you’ll deduct ACC Earners’ Levies from their wages as part of their PAYE payments. This levy covers people for injuries that happen outside of work and not on the road, eg while playing sport or at home.

The amount deducted is based on how much your employees earn.

 Current levy rates — ACC

Tips and advice on PAYE

Employee Cost Calculator — check the less obvious costs of hiring staff, including ACC levies

 

What your business pays

All businesses pay levies to ACC to cover the cost of work-related injuries. You'll pay for:

  • ACC workplace cover — the Work levy
  • the residual portion of the Work levy — to cover the cost of workplace and non-work long-term injuries
  • the Working Safer Levy — this is collected on behalf of the Ministry of Business, Innovation and Employment (MBIE) to support WorkSafe NZ’s activities.

You’ll receive a provisional invoice with an estimated levy and a year-end adjustment.
 

How it's calculated

How much your business pays depends on:

  • your business description — this is assigned an ACC classification unit
  • how much you pay your employees
  • your claims history — the number of work-related injury claims your business has made.

You can work out how much your levy is likely to be using  ACC levy calculator.
 

Classification units

These are used to set levy rates for different industries with different levels of risk.

ACC assigns your business a classification unit based on your Business Industry Classification (BIC) code. This is a code every business and self-employed person chooses, based on their main work activity, when registering for GST or submitting a tax return.

Find your BIC code — Business Industry Classification Code
 

Liable earnings

Liable earnings are the part of your payroll that levies are payable on. Things like holiday pay and overtime are liable earnings — but redundancy and retirement payments are not. How much your liable earnings are depends on how much you pay your employees.

 Liable earnings — Inland Revenue

 

What you pay if you’re self-employed

If you’re not an employer, you’ll be invoiced for ACC levies once a year. You’ll pay for:

  • ACC workplace cover — the Work levy
  • the residual portion of the Work levy — to cover the cost of long-term workplace and non-work injuries
  • non-work injury cover — the Earners’ levy
  • the Working Safer levy — this is collected on behalf of MBIE to support WorkSafe NZ’s activities.

This is a percentage of your annual income — currently $1.26 for every $100.

 ACC levies if you’re self-employed — ACC

 Current levy rates — ACC

 

How to reduce your ACC Work levy

ACC has an experience rating programme that takes your claims history into account when it calculates your Work levy. If you have a lower than average injury rate, with a better than average rehabilitation or return to work rate, you may receive a discount.

 How to pay less - ACC

 

Your invoice

You’ll usually get your first ACC levy invoice after the end of your first year in business. After that, you’ll be invoiced once a year, usually in July for businesses or August for the self-employed.

You'll get:

  • Provisional levy invoice for the current year — this is an estimate based on your previous year’s liable earnings and any wages or salaries you expect to pay in the coming year.
  • Levy adjustment for the previous year — if you paid less than you should have for the previous year, ACC will send you an invoice for the difference. If you paid more, you’ll get a credit applied to your account.

If your circumstances change, eg your main work activity changes or you stop trading, ask ACC to reassess your levy calculation. Fill in an  ACC4618 form and send it to ACC as soon as possible.

You’ll need to pay your levy by the due date on the invoice — even if you’re waiting for a reassessment.

 

How to pay

You can pay:

  • online via internet banking
  • online via credit card (a service fee applies)
  • by direct debit, as a one-off payment or in installments
  • by posting a cheque
  • by cash, cheque or Eftpos at any PostShop.

 Pay your ACC levy — ACC

 

[image] cross Common pitfalls

Avoid these common levy pitfalls:

  • Not budgeting for your Work levy. Use ACC’s levy calculators to get an estimate — it’s worth regularly setting money aside in a savings account to help cover the cost.
  • Not paying your invoice by the due date — you’ll be charged interest and may face a penalty for late payment.