McLEAN AND CO.

Accounting          Taxation         Business Advice and Development Assistance           Audits                             

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

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

 
 
EMAIL NEWSLETTER  MAY 2006
 

Welcome again to the McLean and Co. Newsletter in which we discuss current taxation and business matters. We trust you find it informative.  Any feedback would be welcomed.

McLean 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.  Enquiries are welcomed.

 

NEW CLIENTS

We are happy to accept new clients.  Please contact ourselves at the contact points highlighted above if we can assist you in your accounting and taxation requirements. Our website lists information required for this in the following link:

www.mcleanandco.co.nz/Documentationrequired.htm

 

INDEX

  1. School Children's Wages Earnings.

  2. Due Dates for GST Returns

  3. Tax Payments- Your Options During Financial Difficuly

  4. New Coinage- Important Dates

  5. ACC Levies

  6. Record Keeping of Wages

  7. 9 Personality Types of Entrepreneurs

 

 

SCHOOL CHILDREN'S WAGES EARNINGS

An increase in the child rebate from 1 April 2006 now allows primary or secondary schoolchildren to earn up to $2340 a year ($45 a week) before PAYE or withholding tax needs to be deducted.  If you employ primary or secondary schoolchilren, and they earn (or are expected to earn) $2340 or more a year from all emplyoyers, you will need to deduct PAYE or withholding tax from the payments you make to them.

Schoolchildren who earn less than $45 a week, or who expect to earn less than $2340 from all employers, do not have to complete a Tax Code Declaration (IR330).  You don't need to deduct PAYE or Withholding Tax from payments you make to them or include them on your Employer Monthly Schedule (IR348).  However, you still have to keep wage records for them.

Schoolchildren who earn more than $45 a week, or expect to earn more than $2340 a year from all employers need to complete a Tax Code Declaration (IR330).  You need to deduct PAYE or Withholding Tax from the payments you make to them and keep wage records.

 

DUE DATES FOR GST RETURNS

IRD quote the due date to send the GST form in and make payment to them.  The due date is the last working day of the month, not the last calender day of the month.   Your return is also due on the last working day before a weekend or public holiday.  There is one exception- if your GST Return has a due date on 31 December, it will actually be due on 15 January of the next year.

 

TAX PAYMENTS- YOUR OPTIONS DURING FINANCIAL DIFICULTY

The best way to make your tax payments is to plan ahead for them so you can pay the full amount on time. 

There are a range of options available for paying amounts due. If you are unable to pay the full amount due on time, you should contact IRD as soon as possible. You do not have to wait until the due date for payment has passed.

IRD will discuss your current circumstances and help you determine the best option for dealing with the amount due.  IRD will look at your current situation, your payment history and your ability to meet future obligations.  When looking at your individual case IRD will follow established guidelines.

Options for payment are:
Payment in full
An instalment arrangement where you repay an agreed amount over time
Writing off an agreed amount if IRD determine that full payment would cause you serious hardship
A combination of an instalment arrangement and a serious hardship write-off.

IRD may need further information from you to determine the best options for you.

 

If you think you can't pay by the due date

Contact IRD before the due date to let them know about your financial difficulties. Penalties and interest apply to tax bills that are unpaid by the due date but, if your financial situation prevents you from paying on time, IRD may for example set up an arrangement where you pay the amount owing in instalments. If you contact IRD and make a formal arrangement before the due date, as long as you meet all of IRD obligations under the arrangement you will only be charged one late payment penalty of 1%.  No further penalties will be charged.

Note that even with an arrangement you are still charged interest on the tax owing.  So you may wish to consider borrowing money from elsewhere so that you can pay the tax bill by the due date.

 

If the due date has passed and you have an unpaid Tax Bill

If you make an arrangement after the due date, any penalties already charged will stand.   If you meet all of your obligations under the arrangement, no further penalties will be charged, however, use of money interest continues to be charged.

 

Negotiation Period

In some instances when you contact IRD to discuss your payment options, IRD may need further information from you to determine the best option for you. This may require you to phone IRD back, complete a form or file a return. You will be given a specific timeframe to provide the information that IRD need. During this time, IRD will not impose further late payment penalties or take new debt recovery actions. Late payment penalties and recovery actions will recommence only if a conclusion is not reached before the end of the negotiated timeframe. The use of money interest continues to be charged during the period of negotiation.

 

To discuss payment options, you can contact IRD on freephone 0800 227 771 or, if you are in business or have a student loan, on freephone 0800 377 771.

 

Child Support Taxpayers

The best way to avoid debt is to pay the full amount you owe, on time, every month. But if you get behind in your payments or think you are going to have trouble paying on time, phone IRD on 0800 221 221.

IRD will talk to you about ways to pay off your debt. The quickest way to clear the debt is to pay the total amount in one sum. Other options are to pay a partial amount of the total, or to pay off the debt over time by entering into an arrangement with IRD.   IRD will help you to work out what's possible for you.

IRD can write off paying parents' penalties in some situations but cannot write off unpaid assessed amounts.

Custodians who have a debt to pay should call IRD on 0800 221 221 to discuss their situation. IRD may be able to write off custodians' debt in some cases.

 

NEW COINAGE- IMPORTANT DATES


The following dates should be noted in regards to the introduction of new coinage:

31 July 2006
New coins issued into general circulation, and 5 cent coin starts to be taken out of circulation

August – October
Both old and new coins will be accepted, with the old coins being progressively taken out of circulation.

1 November 2006
Old coins no longer accepted at shops and businesses.

 

 

ACC LEVIES

Levies are the payments you make to ACC for your personal injury cover.
You have to pay these levies each year:
•  ACC CoverPlus or CoverPlus Extra levies for your work-related injury cover
•  Residual Claim Levies for the ongoing costs of work injuries that happened before 1 July 1999, and non-work injuries that happened before 1 July 1992
•  Earner levies to pay for your non-work-related injury cover
•  Earners’ Residual levies for the ongoing costs of non-work-related injuries that happened from 1 July 1992 to 30 June 1999
•  Health and Safety in Employment levy, collected on behalf of the Department of Labour to fund Occupational Safety and Health.

 

ACC CoverPlus and CoverPlus Extra Levies

These levies pay for the current and future costs of work-related injury claims that occur in the levy year - 1 April to 31 March.
Not everyone pays the same rate for their levies, and the rates can change from year to year.

 

ACC- Why are there different rates?

Different industries pay different rates. Some not only make a higher number of ACC claims, but also have a higher risk of serious harm injuries.
To reflect this, ACC groups employers with similar business activities and risks of workplace injury into “classification units”.
To set the levy rates for your classification unit, each year ACC reviews:
•  The cost of workplace injuries for your classification unit
•  The total liable earnings for your classification unit.

 

How are your Levies calculated?

Your ACC CoverPlus levy is calculated on:
•  Your latest liable earnings from self-employment
•  The classification unit rate for your business activity.
 

Your ACC CoverPlus Extra levy is calculated on:

•  The level of cover you agree with ACC
•  The classification unit rate for your business activity
•  Your age.

 

How can you find out what your Levies will be?

If you have ACC CoverPlus, between March and May ACC Corporation  will send you an indication of what your levies will be for the coming year, based on your previous year’s business information.

 

RECORD KEEPING OF WAGES

Good record keeping protects the employer in the case of a dispute and ensures that an employee's entitlements are correctly met.

The Holidays Act 2003 makes a  requirement to maintain a holiday and leave record in addition to the requirement to maintain a wage and time record. This record may be written or electronic.

You must ensure that all the following information is recorded in a manner that enables the employee to verify entitlements:

the name of the employee
the date employment commenced
the days on which an employee works, if the information is relevant to entitlement or payment under the Holidays Act
the date the employee last became entitled to annual holidays
the employee's current entitlement to annual holidays
the employee's current entitlement to sick leave
the dates any annual holiday, sick or bereavement leave was taken
the amount of payment for any annual holidays, sick leave and bereavement leave taken
the dates of and payment for any public holiday worked
the number of hours worked on any public holiday
the date on which the employee became entitled to any alternative holiday for any public holiday worked
the dates and payment of any public holiday or alternative holiday on which the employee did not work, but for which the employee had an entitlement to payment
the cash value of board and lodgings provided
the cash value of any alternative holidays that the employee has surrendered for payment
the date of termination
the amount of pay for holidays on termination

It would also be useful for employers to record the date on which employees become entitled to sick and bereavement leave, to avoid any dispute over whether the employee is entitled to this leave.

 

 

9 PERSONALITY TYPES OF ENTREPRENEURS

Starting and growing your own business requires many skills to be successful.  

Your business personality type are the traits and characteristics of your personality that blend with the needs of the business. 

There are 9 key types of personality and understanding each will help you enjoy your business more and provide your company with what it needs to grow. 

 

The 9 Personality Types of Entrepreneurs

1. The Improver: If you operate your business predominately in the improver mode, you are focused on using your company as a means to improve the world. Your overarching motto is: morally correct companies will be rewarded working on a noble cause. Improvers have an unwavering ability to run their business with high integrity and ethics.

Personality Alert: Be aware of your tendency to be a perfectionist and over-critical of employees and customers.

2. The Advisor: This business personality type will provide an extremely high level of assistance and advice to customers. The advisor's motto is: the customer is right and we must do everything to please them. Companies built by advisors become customer focused.

Personality Alert: Advisors can become totally focused on the needs of their business and customers that they may ignore their own needs and ultimately burn out.

3. The Superstar: Here the business is centered around the charisma and high energy of the Superstar CEO. This personality often will cause you to build your business around your own personal brand.

Personality Alert: Can be too competitive and workaholics.

4. The Artist: This business personality is the reserved but highly creative type. Often found in businesses demanding creativity such as web design and ad agencies. As an artist type you’ll tend to build your business around the unique talents and creativities you have.

Personality Alert: You may be overly sensitive to your customer’s responses even if the feedback is constructive. Let go the negative self-image.

5. The Visionary: A business built by a Visionary will often be based on the future vision and thoughts of the founder. You will have a high degree of curiosity to understand the world around you and will set-up plans to avoid the landmines.

Personality Alert: Visionaries can be too focused on the dream with little focus on reality. Action must proceed vision.

6. The Analyst: If you run a business as an Analyst, your company is focus on fixing problems in a systematic way. Often the basis for science, engineering or computer firms.    Analyst companies excel at problem solving.

Personality Alert: Be aware of analysis paralysis. Work on trusting others.

7. The Fireball: A business owned and operated by a Fireball is full of life, energy and optimism. Your company is life-energizing and makes customers feel the company has a get it done attitude in a fun playful manner.

Personality Alert: You may over commit your teams and act to impulsively. Balance your impulsiveness with business planning.

8. The Hero: You have an incredible will and ability to lead the world and your business through any challenge. You are the essence of entrepreneurship and can assemble great companies.

Personality Alert: Over promising and using force full tactics to get your way will not work long term. To be successful, trust your leadership skills to help others find their way.

9. The Healer: If you are a Healer, you provide nurturing and harmony to your business. You have an uncanny ability to survive and persist with an inner calm.

Personality Alert: Because of your caring, healing attitude toward your business, you may avoid outside realities and use wishful thinking. Use scenario planning to prepare for turmoil.

 

Each business personality type can succeed in the business environment.

 

FOR PREVIOUS MONTH EMAIL NEWSLETTERS PRESS HERE

 

FOR McLEAN AND CO KNOWLEDGE CENTRE AND INFORMATION ON THE FOLLOWING TAXATION AND BUSINESS SUBJECTS PRESS HERE
ACCOUNTING HOT TOPICAL ITEMS
BUSINESS AND PERSONAL PLANNING OBTAINING A BUSINESS LOAN
STARTING UP IN BUSINESS RENTAL PROPERTY
COMPANIES  TAXATION
FRANCHISES ACCIDENT COMPENSATION LEVIES

 

 

The information provided in this email newsletter is for informational purposes only.   McLean and Co. accept 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 McLean and Co. 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 McLean and Co as follows:

 CONTACT McLEAN AND CO. BY EMAIL BY CLICKING ON THIS LINK

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