to the first edition of the email newsletter produced by McLean and Co,
Chartered Accountants, Clive, Hawkes Bay and provided to clients and interested
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business information and advice
and Co. is a home based chartered accountancy practice based in Clive, Hawkes
Bay. Readers are invited to peruse the practice website www.mcleanandco.co.nz,
which lists services provided, gives contact details and indicates how to become
a client, contains an extensive base of articles on business and taxation
matters, and has links to other websites that may assist your business.
Being a small firm itself, McLean and Co. strives to provide a
personal and professional service largely to a self employed person and small
business client base.
Business and Taxation Articles
in the minimum wage rates
of Year Tax Bill- if you cant pay it
moves to Single Billing
Classification for Partners
Claiming of Rebates
the Right Word
BUSINESS AND TAXATION ARTICLES
McLean and Co. website contains an extensive number of articles prepared by
McLean and Co. relating to taxation and business matters. Here
are a selection that will be of interest:
chances of surviving in business are said to be double if you have regular
accounting reports. The bigger your business the more often
you need to analyse its profit. By monitoring the progress of
the business, you can correct adverse trends early.
trouble deciding which expenses are 50% deductible and which are 100%.
It pays to check the detail in IRD Publication IR268. Here are a few
to customers which are food and drink
customers or staff at your office
corporate box at a sports venue
expenses incurred getting to and from a staff party
and drink when out of town entertaining a client
business lunches for clients
expenditure incurred overseas
and drink for your staff either as normal morning or afternoon teas or
and drink for employees while travelling overseas.
IN THE MINIMUM WAGE RATES
government has increased the adult minimim wage rate by 3.9% to $8.00 an hour in
a move it says is in line with annual wage growth. This rate
rises 30 cents from the current $7.70 an hour. The youth
minimum wage rate, applying to 16 and 17 year olds, will increase from $5.40 to
$6.40. The larger increase in youth rates reflects an earlier
decision to increase the youth minimum wage rate from 70% to 80% of the adult
estimated that the increase in the adult minimum wage will affect 5,500 adult
workers while the increase in the youth minimum wage rates is estimated to
affect about 6,900 16 and 17 year olds.
changes will come into effect from on 18 March 2002.
OF YEAR TAX BILL- IF YOU CANT PAY IT
the final day to pay your end-of-year tax bill is 7 February 2002, or if you
have a tax agent and an extension of time, 7 April 2002. Every
year some taxpayers are charged late payment penalties because they havent been
able to pay their full tax bill by the due date. If you think paying
your end-of-year tax bill might be a problem, the following are some simple ways
to plan ahead and pay by the due date:
can arrange automatic payments by phoning INFO express on 0800 257 773 and
ordering an Automatic Payment Authority (IR586) form.
Simply fill it on and give it to your bank. Remember, to avoid a
late filing penalty, your tax bill needs to be completely paid off before
the due date.
can make payments at any time, right up to the due date, by posting a cheque
to P.O. Box 39050, Wellington Mail Centre. Ensure that you
attach a pay in slip or a note with your payment and include your IRD
number, the tax type and the period you want the payment credited to.
in person, by cash or cheque only, at any branch of Westpac Trust.
may be able to pay your tax bill by arranging an automatic deduction from
your wages. Your wages will need the payee details information
on the IR586 form procured from IRD.
If Youre Unable To Pay in Full by the Due Date
IRD on the numbers below to discuss making a pre-emptive instalment arrangement.
By contacting IRD early, you will minimise the amount of penalties and interest
that will be charged:
Income Tax, Family Assistance and General Enquiries
0800 162 684
Income Tax, Student Loan and General Enquiries
0800 162 685
you'd like to know more about any of these options, you can order a copy of Debt
Options Information Sheet at IRD by phoning INFOexpress on 0800 257 773
(remember to have your IRD Number handy)
MOVES TO SINGLE BILLING
1 April 2002 ACC will collect Residual Claims Levies directly from clients,
taking over the role from IRD. Customers will now only have to
deal with ACC on ACC- related matters. Residual Claims Levies
are charged to employers and self-employed to cover the ongoing cost of
treatment and rehabilitation for people injured in work and non-work from 1992
to 1 July 1999, and non-work injuries sustained before 1992.
This change is one resulting from the passing of the Injury Prevention,
Rehabilitation and Compensation Act. This means
employers and self-employed business will receive one invoice from ACC for all
premiums and levies. One annual payment only will be
IRD's role in collecting residual claims levies changing on 1 April 2002, ACC
will collect all premiums and levies as part of its annual invoicing process for
employers and self-employed people. ACC will collect:
for ACC cover for the current period (eg 1 April 2002-31 March 2003), and
Claims and Earner's Account Levies for the previous period (e.g. 1 April
2001-31 March 2002)
change means that both premiums and levies will be invoiced at the same time by
ACC: employers from July 2002 and self-employed from November
Does this Mean for Employers?
will not be required to file an IR68A return on 31 May 2002 or future years.
will provide ACC with earnings information from your employer's monthly PAYE
invoicing for both premiums and levies will begin from July 2002.
Does this Mean for Self-Employed People?
will not be required to calculate levies in your 2002 and future years tax.
will provide ACC with relevant earnings data from your return which will
allow ACC to calculate your liable earnings.
invoicing for both premiums and levies will begin from November 2002.
will receive one invoice.
people with ACC CoverPlus Extra will receive a separate invoice for residual
claims levies from November 2002.
Does this Mean for Close Companies where Shareholder Remuneration Not Subject to
PAYE is Paid
company will not be required to calculate ACC premiums and levies in 2002
and future year's IR4 company tax returns.
will provide ACC with details of shareholder-employee remuneration not
subject to PAYE.
invoicing for both premiums and levies will begin from July 2002.
The company will receive one invoice.
What Stays the Same?
|Residual Claims and Earner's
Account Levies will continue to be collected in arrears e.g levies for the
income year ended 31 March 2002 will be collected during the 2002 calender
|IRD will still collect the
employee Earner premium for salary and wages earners (including Earners
Account Levy) through PAYE deductions.
|All Residual Claims Levies
due on earnings to 31 March 2001 must be paid to IRD.
|IRD will manage collection
of outstanding levies due for the years up to and including 31 March 2001.
This includes returns that have not been completed or have outstanding
CLASSIFICATION FOR PARTNERS
IRD has changed the way that
individual partners in a partnership are able to classify themselves for
residual claims levy purposes. Previously all partners were
required to use the classification that reflected the business activity of the
partnership. From the 2001 income year, individual partners are
able to classify themselves according to the activity personally performed for
Readers will remember the
unfairness of restricting rebate claims to within six months after balance
Taxpayers from 2002 and beyond
have eight years to make rebate claims. This means taxpayers who
missed out on claims in the 1999-2000 year can make claims in relation to
charitable donations and housekeeping or childcare expenses this year.
USE THE RIGHT
With reference to non-business
taxpayers, if you ask IRD for a Personal Tax Summary, you will receive details
of your income and your tax and if there is money owing you will have to pay
If, on the other hand, you ask
for a Summary of Earnings plus a Personal Tax Worksheet, you will receive the
same information with no obligation to pay the tax if any.