Keep up-to-date with us and what's happening in the business world |
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- 5 Ways to Reduce Your Stress as a Business Owner
- Important Notices - Following up on Invoice Payment in a Down Economy - Xero Tip of the Month: Making the Most of Dual Screens
- Audit Shield Insurance - Protect Yourself from a Tax Audit - Tax Question of the Month: Offset of Bright-Line Profit Against Bright-Line Loss
- Welcome to the Team: Chanelle Doole - Farewell to Sarah Toner - IRD Upcoming Tax Payment Dates |
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Small and medium-sized enterprises (SMEs) make up 97% of all businesses in New Zealand.
As the owner of an SME, you’re doing your bit to provide employment, aid the economy and put Aotearoa on the map in an increasingly globalised world. But running your own business can be incredibly stressful!
New research from RFI Global research, commissioned by Prospa, shows that seven in ten New Zealand SMEs are feeling stressed and burnt out. On the whole, this stress comes down to economic pressures, cashflow worries and the time commitments of being an owner. So, what can you do to remove some of the pressure and avoid business burnout?
Practical Ways to Ease Your Business Stress: Let’s look at some simple ways to bring those anxiety and stress levels down:
Ease those financial worries: You can’t change external factors like the economy, but you can get deeper into cashflow forecasting, spend management and cost-cutting exercises to put your cashflow and revenue in a more positive position.
Look for a business mentor: Partnering with an experienced business mentor can work wonders for both your business knowledge and your mental health. Mentors can share their experiences of the lean times, and what they did to overcome the challenges. Take time away from the business: You can’t have your business brain turned on 24/7. Schedule time away from the business to improve your work/life balance. Time away can be hugely beneficial, allowing you to come back refreshed and motivated.
Focus on your own health and wellbeing: The long hours of running a business are not always conducive to healthy living, both for your physical and mental health. Try to eat and drink healthily, and also make time for exercise, social activities and a greater focus on relaxation, mindfulness and your personal wellbeing.
Work closely with your accountant: You don’t have to shoulder those cashflow worries alone! We can work closely with you to keep your cashflow in a more positive position, while also providing wider financial, advisory and business support. Talk to us about about dialling down those stress levels: To run a healthy business, you need to be fit, healthy and in a good place personally. Constantly pushing yourself can quickly lead to burnout – and that’s a recipe for disaster! We understand the pressure you can feel as a business owner. So, we’re here to help take on some of the load, whether it’s strategic business advice, cashflow forecasting or introducing you to the right mentor from our business networks. |
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Reminder: Cryptocurrency Tax Records
The Inland Revenue is now intensifying its efforts on targeting cryptocurrency users who are actively dealing in cryptoassets but have not declared the income from them in their tax returns.
Whether you're holding, trading, mining, staking, lending, or otherwise investing crypto assets, your gains are likely to be taxable, so it's important that you are aware of the tax implications.
By contacting us and informing us of your cryptocurrencies, we can help you get on top of your tax obligations early, so you don't end up with an unexpected tax bill further down the line, saving you valuable money, stress, and time.
If you have any cryptocurrencies that you have not yet advised us of, please get in touch with our team today at 04 970 1182
FamilyBoost: Claim Now for ECE Fees Invoiced 1 July - 30 September
FamilyBoost is a new childcare payment to help eligible households pay for the cost of early childhood education (ECE). Starting from 1 July 2024, If you're eligible, you will be able to claim up to 25% of your weekly childcare fees, or a maximum of $975 every 3-months.
Eligibility for FamilyBoost depends on several factors, including who cares for your children, your household income, and the type of childcare you use. You may be eligible for FamilyBoost if: -
You are the caregiver of a child or children aged 5 and under,
- You have a household income of less than $180,000 a year,
- You have fees from a licensed ECE provider, and
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You are a tax resident of New Zealand
Registration and claim process:
You can register for FamilyBoost through MyIR, Inland Revenue's online portal. This is a straightforward, one-time registration process. Once registered, you will be able to upload your invoices and submit your FamilyBoost claim for the quarter covering July 1 to September 30 directly in MyIR.
For more information about FamilyBoost, click the button below. |
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FOLLOWING UP ON INVOICE PAYMENT IN A DOWN ECONOMY |
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It can feel challenging to chase up payment of invoices when the economy has been down, but it is important to keep cash flowing into your business so you can cover expenses and meet your obligations to others.
As with all dealings in more difficult times, some empathy and a lot of open communication can go a long way.
The following tips are useful to keep in mind when asking for payment. |
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Communication - Connecting with your customers is important. Try to make it personal to their situation rather than a one-size-fits-all email. Connecting on a more personal level shows you value them and are conscious of the impacts that the current situation may be having on them. The empathy you show now will also be remembered when the economy recovers. Be proactive - early communication will help you stay on top of cash flow and will also alert you if you need to account for late payments.
Offer Flexible Payment Options - for customers who can’t pay in full, consider breaking invoices into multiple payments with payment terms moved to a longer timeframe. Set up a credit card facility to give customers other options for payment. After all, the easier you can make it for them to pay you, the quicker you will get paid. If you don’t have payment services set up in your accounting software, we can help you do this. Offering a discount for early payment might provide the incentive, for customers who can settle, to pay your invoice before others.
Total Outstanding - Make sure you keep track of how much customers are in arrears. While you can continue to allow credit, you want to make sure you're not creating too much risk. Allowing continual extensions to payment while also letting more to be added to their total amount outstanding can create a cashflow crunch. Get in touch if you want help to better track your cash flow.
Keeping cash flow going is vital for your business so the earlier you communicate with customers the better. |
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XERO TIP OF THE MONTH: MAKING THE MOST OF DUAL SCREENS
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One of the most significant upgrades you can make for work efficiency is your screen setup. Xero bookkeeping and accounting are doable on a single screen, but tasks become much easier when you try out the dual-screen setup.
Using two monitors instead of one while using Xero can increase your productivity exponentially. You can have your accounting documents up on one monitor, and have Xero running on another. By working on both monitors at the same time, you will no longer have to tab in and out of applications to check reports and budgets, as you can now simply glance over to the other monitor to check instead. Dual screen setups are becoming increasingly common in many workplaces as it gives the user a greater amount of screen space to work with, which can lead to an increase in productivity and prevent their desktop from becoming cluttered with windows and instances of other software. |
AUDIT SHIELD INSURANCE - PROTECT YOURSELF FROM A TAX AUDIT |
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Have you got your Audit Shield policy sorted this year? Get the piece of mind with tax audit insurance for your business.
Audit Shield is a solution that provides clients with cost-effective protection and assistance against the substantial cost that may be incurred should the Inland Revenue or other NZ government revenue authorities conduct a random audit, investigation or review of lodged returns. While we highly recommend Audit Shield to our clients, we understand that every client and their business needs are different. Whether or not you choose to opt-in for Audit Shield will depend on your specific circumstance and appetite for risk.
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If you are unsure whether Audit Shield is right for you and your business or have any queries, you can give the AAF team a call to discuss further. To accept or decline this offer, please let us know by sending us an email at: admin@aafl.nz |
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TAX QUESTION OF THE MONTH: |
QUESTION: A company purchased two residential rental properties. Property A was purchased in December 2021 and Property B in March 2022. Later, the company sold both properties. Property A was sold in February 2024 and Property B in October 2023.
The disposal of Property A resulted in a profit of $50,000 while the disposal of Property B resulted in a loss of $42,000. Both properties are subject to tax under the bright-line test. Under the bright-line rules, can the company offset the loss of $42,000 from Property B against the $50,000 profit from Property A?
ANSWER:
Losses arising under the bright-line test are ring-fenced and can only be used to offset taxable income arising from land sales. In this case, the company can offset its loss of $42,000 from the sale of Property B against the profit of $50,000 from the sale of Property A. As the gain from Property A exceeds the loss from Property B, a full deduction of $42,000 will be allowed against the gain of $50,000.
If the company had only sold Property B during the 2024 income year, it would not have been able to claim the loss on disposal in the 2024 income year. Instead, the company would be required to carry the excess deduction forward to an income year in which it derived either “bright-line income” or “net income from land”. However, as the profit from the sale of Property A arose under the bright-line test during the 2024 income year, the company can offset this profit against the net loss from Property B.
As a result of the ability to offset the loss from the sale of Property B, the overall taxable amount from the application of the bright-line test is $8,000 ($50,000 - $42,000).
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WELCOME TO THE TEAM: CHANELLE DOOLE
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| Introducing the newest member of our team: Chanelle Doole!
After an exciting six-month adventure abroad, Chanelle has returned home to Wellington and stepped into the role of Personal Assistant to our Director, Ben Duflou.
With a strong background in business administration and valuable experience as an executive secretary at a law firm, Chanelle brings a wealth of skills to our team. Her expertise in organisation, administration, and multitasking will be instrumental in supporting our goals and ensuring smooth operations. We’re thrilled to have Chanelle on board and look forward to the positive impact she will undoubtedly make! |
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We have unfirtunately bid farewell to Sarah Toner, Associate Director, as she embarked on an exciting new chapter in her career.
For the past 13 years, Sarah has been an integral part of our team, demonstrating exceptional expertise, unwavering dedication, and a client-first approach in every endeavor.
Her significant contributions have been invaluable, and her absence will be deeply felt by both the team and undoubtedly many of the clients she has worked with over the years.
We feel incredibly fortunate to have had Sarah with us for so long, and we’re excited to see all the amazing things that she will accomplish in this next chapter of her career. Best wishes on your new journey, Sarah! |
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IRD UPCOMING TAX PAYMENT DATES |
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