Keep up-to-date with us and what's happening in the business world |
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- 2023 Annual Accounts Questionnaires - Reminder: Minimum Wage To Rise In Line With Inflation From April 1 - Financial Support for Businesses Affected by Cyclone Gabrielle - Xero Tip of the Month - Sync Xero Reports & Budgets to Google Sheets - Question of the Month: Tax treatment of payment to staff to help with impact of Cyclone
- IRD Upcoming Tax Payment Dates |
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With less than a week remaining until the end of the financial year (1 April 2022 to 31 March 2023), now is the time to start pulling together those additional bits of information so that we can complete your 2023 annual accounts and tax returns.
Our 2023 questionnaires can now be accessed via our website by clicking the button below. We would appreciate it if you could please take the time to read through the questions and worksheets that are relevant for both your personal and business accounts. Once you have gathered and collected all the required information to attach, please email your completed questionnaires through to the team at advice@aafl.nz. The right information helps us to help you:
Having all the necessary information helps us look closely at your accounts and ensure you’re not paying too much tax. For instance, if we don’t know about your expenses, we won’t be able to offset them against your income, so you’ll pay more tax than required.
On the flipside, you may also have paid too much provisional tax during the year if your business had a tough time. Getting all your information together means we can apply for a refund if you’ve overpaid and adjust your provisional tax depending on your circumstances.
The sooner we have all of this information, the sooner we can complete your accounts and notify you of your tax position. It’s also helpful to have your annual accounts completed so you can analyse how your business performed. You can compare it to previous years and think about what’s working, and what isn’t, so you can make better decisions for the year ahead. For clients utilising Xero, we are likely to need the following key information: - A list of stock on hand at 31 March 2023 (if over $10,000);
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Copies of loan statements at 31 March 2023;
- Copies of invoices for any large asset purchases (IE: new vehicles, etc.); and
- Completion of the Use of Home Office template or list home office expenses.
We will require additional information detailed on the Non-Xero questionnaire for clients not utilizing Xero. |
Questions? We can help:
We’re happy to provide you with an update on how we’re getting along, so feel free to ask at any time. If you require any assistance, or have any questions around the above points or the questionnaires, please do not hesitate to give us a call on 04-970-1182. |
REMINDER: MINIMUM WAGE TO RISE IN LINE WITH INFLATION FROM APRIL 1 |
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A reminder that the minimum wage will go up from April 1 2023, to $22.70 - a 7% increase from $21.20. The Starting-Out and Training minimum wage rates will be maintained at 80% of the adult minimum wage.
It's important to get your ducks in a row before this changes comes into effect. This includes: -Advising your minimum wage team members of the increase
-Checking your payroll systems and processes -Updating your employment agreements if relevant -Updating your business budget. |
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Costs are increasing
Even if you don’t employ one of the 175,000 Kiwis who earn minimum wage, this may impact your business. Wages rise steadily over time, and employees who missed out on a pay rise this year will probably expect one next, if your business has been thriving.
In addition to the rising cost of labour, inflation is forecast to put upward pressure on everyday items. That will likely increase your general running costs and the price of materials. Petrol prices are up, for instance, and supply chain issues have driven up the cost of many imported products.
Time to review your pricing
Is it time to put your prices up? Ideally, your business should increase costs by a tiny amount each year, rather than by a big jump every five years, for instance. Small increases help prevent price shocks for customers, and keep your business in line with the rest of the market.
Can you also cut costs?
If you don’t think increasing your prices is an option, or you still need to make more of a change, you may need to cut back your spending. We look at your business line by line, so we can help you identify areas where you might be able to trim the fat.
Need to review your pricing? Our team are here for you; we have a number of pricing tools available for clients to utilise. Get in touch, we are here to help. |
CYCLONE GABRIELLE: FINANCIAL SUPPORT FOR BUSINESSES |
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If your business has been impacted by Cyclone Gabrielle, you may be able to get support from your bank and/or the Government.
Here are some of the packages available to businesses across New Zealand: $2,500 cash support available from Westpac
Westpac’s small business customers can apply for a $2,500 cash grant from the Small Business Flood Relief Fund. This also applies to businesses hit by the earlier Auckland floods. Visit the Westpac website and apply now. |
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$2,000 cash support available from ASB
ASB’s business and personal customers can apply for a one-off $2,000 cash payment for support. You’ll need to supply some evidence of the impact that Cyclone Gabrielle, or the recent flooding, have had on your operations. You can find out more and apply at the ASB website. Support packages from other banks
Other major banks – including ANZ, BNZ, and Kiwibank – are offering businesses temporary overdrafts, zero-fee loan restructuring, interest only periods on loans, payment deferrals and other support. Get in touch with your bank to see what’s on offer.
Civil Defence payments
Anyone who has been displaced or can’t work due to Cyclone Gabrielle can apply for a Civil Defence payment. Eligibility is limited, so check the website for more information. Flood recovery payments for Auckland businesses
Individuals, marae and community groups affected by this year’s extreme weather events in Auckland can apply for a grant from the Auckland Council Emergency Relief Fund. You can find out more and apply here. Inland Revenue waives late payment penalties
Inland Revenue has announced it will waive late payment penalties for businesses unable to file or pay tax on time due to the recent extreme weather. More information here.
Support from your industry Many industry groups have emergency support information available on their websites:
Dairy NZ Retail NZ Hospitality NZ
Restaurant NZ Horticulture NZ The Ministry for Primary Industries (MPI) has announced inital funding of $4 million to mobilise and co-ordinate recovery efforts for farmers, growers, whenua Māori owners and rural communities.
We can help with securing funding and support
If you need assistance in demonstrating the impact of the weather events on your business, we can help. We can also complete funding applications on your behalf, and talk to the Inland Revenue about support for your tax situation. Get in touch, we’re here to help. |
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XERO TIP OF THE MONTH - SYNC XERO REPORTS & BUDGETS TO GOOGLE SHEETS |
By syncing your Xero account with a Google email account, you can export your Xero Reports and Budgets to Google Sheets! This will allow you to modify, save, and share your document by inviting others to view these documents in Google as read-only files, even if they don't have a Gmail account.
To export a Xero Report or Budget: 1. Log into your Xero and go to the Report or Budget that you would like to export.
2. To the right of that document, click the menu icon. You will be prompted to select an export method; select Google Sheets. 3. You will be prompted to log into your Gmail account if you have not already done so. Each time you launch a Google Sheets session, you must confirm that Xero is a trusted site. 4. Once you have exported your document into Google Sheets, you can edit, save or share it. |
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QUESTION: An employer has staff who are impacted by the recent Gabrielle Cyclone event in Hawkes Bay region.
The employer’s board of directors has decided to pay each employee $1,000 to support their family.
Is the payment subject to PAYE? Is there a special tax relief scheme available? ANSWER:
A gift made to an employee that relates to the employment or service of the employee, rather than to any personal relationship between the employee and the giver, is normally treated as assessable income.
Whether a payment is a gift is essentially a question of fact. While this sort of payment is usually of a voluntary nature, it arises because services have been performed.
The following amounts, derived by a person in connection with their employment or service, are income of the person: - salary or wages or an allowance, bonus, extra pay, or gratuity
- expenditure on account of an employee that is expenditure on account of the person
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the value of accommodation received in connection with employment or service
- a benefit received under an employee share scheme
- directors’ fees
- compensation for loss of employment or service
- any other benefit in money.
- See s CE 1 of the Income Tax Act 2007.
An “extra pay” (referred to in the list above) is a payment that— - is made to a person in connection with their employment, and
- is not a payment regularly included in salary or wages payable to the person for a pay period, and
- is not overtime pay; and
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is made in 1 lump sum or in 2 or more instalments.
An extra pay includes a payment made in connection with a person’s employment as a bonus, gratuity, or share of profits.
The support payment in this scenario appears to be "extra pay." It is likely to be deemed made in connection with the recipient's employment. While the payment is voluntary, it has arisen because of the existing employment relationship. Accordingly, the payment is likely to be subject to PAYE.
While the Government has issued some specific tax relief for taxpayers adversely impacted by Cyclone Gabrielle, this does not extend to employer support payments made to employees. |
IRD UPCOMING TAX PAYMENT DATES |
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