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In Melbourne, Australia at Xerocon 2017 taking in the product changes and chatting with over 70 App partners that interface with Xero. It’s been incredible to see the enhancements not only within Xero that are on the horizon, but also the additional features within the partner App providers.
The All Accounted For team will be working our way through the potential benefits that could be delivered to our clients over the next few weeks. However here’s a quick summary of what we’ve picked up from Xero:
- Enhancements to expense claims – significant changes to the process, mobile apps that staff can use to make claims, easier payments process that can be made with payroll, etc.
- Projects – Xero has released a job management system as part of the Xero system. Its functionality is at a starting level currently, but it will be enhanced over the coming months. It would be of most benefit to professional service businesses with a handful of employees at this stage.
- User Role Changes – more flexibility around the level of access for users invited into a Xero file.
- Payment Gateways – Now the ability to add payment gateways such as Stripe to your Xero entity, meaning your clients can pay by credit card, but also you can pass on the transaction fees.
- Bank Rules for Transfers – The ability to now set bank rules so that transfer are always transferred to the correct bank account.
- Upcoming enhancements – More predictive functionality for invoices and bills, enhancements with fixed assets and improved ability to interact with us through Xero Discuss (which is currently limited to bank reconciliation).
From the App partners we are looking closely at the following Apps as having benefits for our clients:
- NowInfinity – Allowing better management of Company and Trust legal documentation and compliance obligations.
- Tradify – Ability to manage staff for trades based businesses.
And of course we continue to work with our recommended Apps SmartPayroll (best payroll provided in NZ), Workflowmax (job management), Spotlight Reporting (reporting), Vend (Point of Sale System) and Timely (appointment management and invoicing).If you want to know anything more about the changes or the Xero App partners, please contact anyone from the All Accounted For team.
Changes at All Accounted For
Just a quick note to update our valued clients about recent team members changes at All Accounted For.
As many of you will be aware, Suzanne Donoghue-Hunt, our previous Office Administrator headed home to the Yorkshire district of the UK 3 weeks ago to assist with caring for her allying Dad.
Stepping in to fill the void left by Suzanne is our new saviour, Kirsten Bell. Kirsten (firstname.lastname@example.org) has recently returned from New Zealand after spending a few years in Edinburgh. Kirsten is already having a positive impact on the team and should also have a positive impact on our golf team (keen golfer).
Kirsten will be able to help out with any of those day to day queries you might have.
Business Services Manager
On Friday, Dylan Guitry, one of our three Business Services Managers, has moved on, heading north. Dylan had been a member of the team since 2014.
While we wish him well, he was a Chiefs supporter! So we’ve taken the opportunity to replace him with a Hurricanes supporter. Viktor Zgomba, born and breed kiwi living in Lower Hutt, will join the team as our replacement Business Service Manager from the 4th of July 2017.
Viktor has been providing public practice accounting services for 10 years, with a strong background in providing services across property, retail and the not for profit sectors.
Sarah Toner & Allison Henderson, our two other Business Services Managers, having been with us since 2011 & 2012, are holding the fort. So if you have any queries that you would have usually sent through to Dylan, please email or call Sarah (email@example.com), Allison (firstname.lastname@example.org) or myself (email@example.com) and we will be more happy to resolve your queries. Between the three of us, we across all the current circumstance of clients that were looked after by Dylan.
We look forward to introducing Viktor to you all in early July 2017.
Graduate Accountant Intern
A couple of weeks ago, Jude Di Giacomo joined us from the town of Glen Mills, Pennsylvania, USA on a 10 week international intern scholarship. Part of Jude’s study at Susquehanna University involves international travel to understand accounting approaches in other countries.
We have introduced Jude to Xero and our GST system. Online accounting is still a relatively novel idea for small business in the US. While Xero has clients in the USA, most of those clients are in California, with growth just starting on the east coast in New York.
Jude is enjoying the kiwi culture. Having taken him to first rugby game, he understands what a religion it is here in NZ. He’s loving the cold weather, though not as much snow as back home (keen skier).
Year end is upon us once again – where did the last 12 months go? So it’s time to start thinking about pulling those additional bits of paperwork together, so we can complete your 2017 accounts.
Please find attached a link to our 2017 annual questionnaires, located on our website. Please take the time to read through the relevant checklists, as they are an important part of the year-end process. It helps you:
- Identify and provide the additional information we need to prepare your accounts.
- Minimise the queries from us during the preparation of your accounts.
Accounts and tax returns are generally completed more quickly when we receive all the information at the start. When a job is put down because you are waiting for something, it’s always difficult to get back to it straight away. It’s the same for us.
Common missing information that causes delays
There are common items that are missed by clients each year. Any missing information increases the time taken to complete the annual accounts and tax returns, and generally increases the costs as well. The below items are the more commonly missed items each year, please give them careful attention:
Home Office expenses – More often than not we need to follow up with clients for their home office expenses. It’s worth remembering that most clients would incur a similar level of home expenses, regardless of whether they were operating an office at home. Home Office expenses therefore offer a legitimate way of reducing your tax obligations. For every $1,000 dollars of expenses, $330 will be saved in income tax, with another $330 in provisional tax saved for next year.
It usually doesn’t take long to complete. A couple of quick phones calls or emails to your utility providers to obtain a list of the last 12 months transactions (though generally you can log into a utility providers client areas) and a copy of the banks year-end mortgage statement showing interest costs is all that’s involved.
Personal tax return information – Despite complete the Company/Trust/Partnership accounts, we are often unable to complete personal tax returns as we have not received all documents. Examples include, not receiving interest/dividend information, income protection insurance information and donations. These are usually minor pieces of information that have a big impact on us being able to advise a client’s final tax position will be.
In addition, for those not using the Sales and Purchases functionality of Xero, don’t forget to send us a list of outstanding invoices owed to you and owed by you at 31 March 2017. Also stocktake lists for those clients with more than $10,000 in stock.
If you require any assistance or have any questions around the above or the questionnaires, please do not hesitate to contact the team.
The All Accounted For team.
Contractor Tax Changes
The IRD has changed some of the rules around withholding tax for contractors that kick in from 1st April 2017.
The largest of these changes is the inclusion of labour hire only companies to withhold tax from payments to their contractor clients. Labour hire arrangements are increasing common now and a classic example is IT contractors providing services to a business with a recruitment company (the labour hire business) collecting the income from the business, deducting a small commission or fee and then paying the contractor. Another change to contractor rules is that the labour hire business tax rules apply whether the contractor contracts individually or through a company structure.
The standard rate for labour hire business arrangements is 20%. Contractors must complete a IR330C and provide to their recruitment company, otherwise the tax is deducted at 45%. If this applies to you, your recruitment company would likely have been in contact with you about this already.
In exceptional cases, you can apply for a 0% rate via a Special Tax Code application if the 20% rate is not appropriate for your circumstances.
In non-labour hire arrangements contracts, a Certificate Of Exemption can be applied for if the prescribed tax rate for your business activity is not appropriate.
Other changes include the variation of the withholding tax rate to suit the contractor’s needs. This is subject to the minimum 10% rate for residents and 15% for non-residents that apply irrespective of which business activity you come under, so you can essentially elect a rate between 10 – 100%.
If you would like to discuss how this affects you, please give the team a call.
Spotlight Reporting is a cloud based system that syncs with Xero and other systems such as Quickbooks Online, Workflow Max, Google Analytics as well as manually entered data such as non-financial information. Drawing on this information and using the Spotlight Report tool, we can provide custom made, highly visual performance reports to businesses enabling stakeholders to make better decisions and improved accountability.
These management reports are taken to the next level when targets and forecast numbers are included, so actual results can be tracked against these during the year.
Samples of some of these reports are below.
If you would like to discuss how these reports could help your business, please give the team a call and we can tailor a report pack to your needs.
Brief Tax Update
In the ever changing world of taxation there are some proposed changes on the horizon that may affect you. These changes are part of Inland Revenue’s attempt to simplify tax compliance.
The threshold for incurring use of money interest (UOMI) on residual income tax is increasing from $50k to $60k and will now also apply to non-individuals (companies and trusts) as well as individuals.
In addition to this, UOMI will not be charged on the first two provisional tax payments when you are using the standard uplift method. This will reduce interest costs for many taxpayers.
It is also proposed to allow businesses to pay provisional tax through their accounting software by using the Accounting Income Method (AIM). This will mean that provisional tax payments are more closely based on the actual income earned by the company (in the same way as PAYE is calculated on salary and wages).
Another proposal would allow companies to pay tax on behalf of shareholder employees, which would mean that the employees would not be subject to provisional tax.
GST on overseas services
From 1 October 2016, non-resident businesses that meet certain GST requirements will be required to charge and return GST on any remote services they supply to customers who reside in New Zealand. This includes businesses providing online services such as online gaming, gambling, video streaming and music streaming services.
Residential Land withholding tax (RLWT)
As we have previously advised there are new information requirements around land transactions and a new tax on profits from property sales if they meet the ‘bright-line’ test. In addition to these there is a proposed Residential land withholding tax.
If an offshore person sells land within two years of purchase, and it is not the main family home, then they will be liable for RLWT. This will apply even if the sale is not subject to tax under the bright line test.
The definition of offshore person is quite broad especially in relation to trusts so we recommend that you discuss any property sales with the team at AAF beforehand. This tax applies from 1 July 2016.
Withholding tax for Contractors
Currently withholding tax is deducted from contractors’ income at specific rates based on the type of work. It is proposed that in the future contractors will be able to elect their own withholding rate (above certain minimum levels). There will also be an option to opt-in to this regime if a contractor is not currently covered.
It is proposed that IRD will no longer charge 1% monthly incremental penalty on future tax debt (late payment penalties and interest may still apply).
Here at All Accounted For we are constantly seeking out new ways to simplify processes for our clients. The latest trial has been to tackle the ease and speed at which clients can sign their documents on-line, for returning to us.
We have been trialling ‘RightSignature’ with a few of our clients, with the feedback being extremely positive. As a result we are looking to roll out the application to all clients from early July 2016.
WHAT TO EXPECT
When there are documents for you to sign, you will receive an email from All Accounted For Limited via RightSignature with a ‘REVIEW & SIGN DOCUMENT’ request. For the month of July 2016, we will also send an email directly from the office advising that a RightSignature signature request will be following.
Once you click on ‘REVIEW & SIGN DOCUMENT’ your document(s) will appear. The yellow band at the top of the document will instruct you on what you need to do and what pages need a signature and date.
HOW TO SIGN YOUR DOCUMENT(S) VIA RIGHTSIGNATURE
To enter your signature you have a number of choices:
If you wish to sign using your mouse click on the box that says ‘Signature Here..’ as this will bring up a larger area. Holding down the left side of you mouse, write your signature. If not happy with the result you can ‘Clear Signature’ and start again. Like everything it does get easier with practice.
Other options for signing are offered by moving your mouse over the area at the bottom of the documents – marked with X. Clicking on the tab ‘Other Signature Options’ will give you the choice of:
Type-to-Sign – Type in your name and ‘Choose a Font’ and ‘Preview’. If you are not happy with the way your signature looks click the signature and it will be cleared.
Sign via Mobile – If you are viewing your emails on your phone you can sign using your finger and again you can clear and try again if not happy with your signature’s appearance.
Once you are happy with how your signature looks click ‘Submit Signature’ it will be applied to all boxes requiring your signature and if there are no other areas to be completed it will be emailed immediately back to us. Note that once you submit your signature, you will not be able to edit the signature.
If you need to enter the date click on the date box and a calendar will appear.
Once your document has been submitted you will receive two emails from RightSignature. The first giving you the option to view the document online and the second email will send you a PDF copy of the signed document.
ALTERNATIVE SIGNING OPTION
If you do not wish to use RightSignature, then simply email us if you receive a document signing request and we will email the documents for you to print, sign, scan and return via email.
For more information or if you have any questions get in touch with The All Accounted For team on 04 970-1182 or email firstname.lastname@example.org
Written by Suzanne Donoghue-Hunt
Are you lying awake at night thinking about unpaid terminal or provisional tax or worrying how you are going to pay your upcoming tax? It’s important that taxes are paid on time to avoid late payment penalties and use of money interest which can escalate quickly.
Putting money aside through the year is the best way to manage your tax obligations, however if you are already behind, it can appear to be an impossible task.
We work with Tax Management New Zealand (TMNZ), a Company that can assist with paying off older debt or to finance upcoming tax commitments. TMNZ interest rates (at around 5%) are significantly cheaper than the Inland Revenues (currently 9.21%) and you won’t have any late payment penalties to pay.
For example if you had owed $10,000 provisional tax on each of the following dates 28 August 2014, 15 January 2015, 7 May 2015, but did not make the payments, then you would save around $874 in use of money interest, as well as $6,728 in late payment penalties if you financed through TMNZ.
TMNZ has flexible payment options meaning you can pay off your debt over a number of months to assist with cashflow.
Give us a call at the office to discuss utilising TMNZ to get you back on the right path, before the Inland Revenue contacts you!
Written by Sarah Toner