Introduction To dismiss someone, employers must have a significant reason for the dismissal and also dismiss the worker using a fair and proper process. Even if you have a good reason for dismissing someone, if you do not follow the correct procedures, you may be found to have unjustifiably dismissed that employee. The employee may…
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Skills Testing
Planning During the planning and preparation phase of your recruitment exercise, when you undertake a position analysis and identify the skills required to do the job, consider whether you will want to use skills testing at some stage of the recruitment process. Where it’s relevant to the position, we recommend that you carry out skills…
Companies
What is a Company? A company is a legal entity that is separate from the people who own it (the shareholders). Every company is registered at the New Zealand Companies Office. This is a business unit within the Ministry of Economic Development. Certain information regarding such things as ownership of a company is available to…
Client databases
Introduction A robust and detailed client database is an important tool for any business. There are many types of databases that a business may use depending on the type of business and the computer applications available. Contents This guide contains the following topics: Database basics Types of database What to record Maintenance…
Business Valuations
There is no topic about which greater differences of informed opinion may exist than the value of a business or shares in a private company. The value of a business is naturally influenced by the willingness of a vendor to sell and a purchaser to buy. It is usually assumed that fair value is a…
Business Systemisation
Introduction Good systems are key in the successful day-to-day operation of businesses. Having robust systems in place makes it easier for a business to expand or set up multiple locations. It also makes it easier for a business owner to work on, rather than in, their business. Contents This guide contains the…
Business Structures
Introduction Small businesses can be operated by the utilisation of a number of different entities. This guide contains the following topics: Sole Trader Partnership Family Trust Company If you intend to start a small business, discuss it with your chartered accountant and solicitor before business operations commence, prior to signing any contracts. It is…
Business appraisals preparation
Systematic Approach to a Business Appraisal 1. Assess What You Are Buying Goodwill Plant & Equipment Fixtures & Fittings Stock and Work in Progress Debtors Franchise Rights Training Licenses Liabilities Other Assets Business Structure 2. Financial Assessment Historical Accounts (3 years) Analysis of Significant Expenses Ratio Analysis Review Income Components Look Behind the…
Building an Employment Agreement
Legal status and requirements Under the Employment Relations Act (ERA) you must supply a written agreement to your new employee and they must sign it to indicate acceptance of your terms and conditions of employment. Until it is signed, it remains a draft Employment Agreement. The employer signs it before sending it out with a…
Branding & Promotions
Introduction Your branding and promotional efforts make up a large part of your marketing and are important to get right. This guide focuses on the subject of branding and promotional efforts which promote your business in general. Specific parts of your promotions such as advertising and direct marketing will be dealt with in further guides,…
Behavioural profiling
Introduction Behavioural profiling is a valuable tool, which has transformed individuals as well as businesses worldwide. It is a tool used to identify behavioural style by measuring attributes or qualities of a person and aspects of his or her personality. It can be used in many contexts, both in the workplace and elsewhere. Behavioural profiling…
Advertising
Introduction Advertising is the way you let the general public know about your business and your events. As well as general advertising to promote your business, it is highly likely you will need specialised advertising to let people know about specials, sales and events. Advertising is your call to action. Contents This guide contains…
ACC levies
Introduction ACC provides personal injury cover for all New Zealand citizens, residents and temporary visitors to New Zealand. ACC uses a risk-based classification system where business activities are grouped so the costs of work injuries are fairly distributed among similar businesses. ACC sets levies for each group by comparing costs of previous claims with total…
Writing a business plan
Why write a business plan? Writing the plan helps you think about what you are doing: The plan sets out your strategy and action plan over the next one to three years, or sometimes longer. As part of the process you set concrete objectives and plan how you will achieve them. Writing the plan helps…
What can I claim?
The Inland Revenue Department collects tax in accordance with several Acts including:- Income Tax Act GST Act It also collects and distributes Child Support. Sometimes you can “make a claim”, which is acceptable for one Act but not for another. e.g. The GST incurred in setting up a company can be claimed, but the cost…
Your Annual Accounts
The notes below have been prepared to assist you to minimise the cost of our work. Due to the complex nature of tax law and the penalties for mistakes, this firm will only accept responsibility for tax advice supplied by its principals. Business questionnaire Please ensure this is completed and signed. If you have…
Trusts
What is a trust? Many centuries ago an adventurer was travelling to a distant land. He said to a friend, “Here is my money, use it to look after my family while I am away”. The adventurer (Settlor) had created a family trust. The friend had become a trustee. The family were the beneficiaries. When…
The numbers don't lie
At a recent presentation the speaker commented that “the numbers don’t lie!” That statement certainly got my attention. But is it true? While numbers themselves may not lie, they can certainly mislead – intentionally or unintentionally. A businessman once introduced himself by stating that in his previous business he had increased annual revenue by 250%…
Annual Stock Valuation - Small Businesses
Definitions A “small business” for tax purposes is one (combined with its associated persons) which has a turnover of less than $3 million per year. Associated person rules apply. This means, for example, a person having an interest in two companies must add the turnovers to see whether the total is still less than $3million.…
Annual Stock Valuation - Big Businesses
References Figures in brackets refer to the section in the Income Tax Act. Definitions: A “big business” for tax purposes is one or an associated group with a turnover of more than $3 million per year. Associated person rules apply. This means, for example, a person having an interest in two companies must add…
Residential Rental Property
Before you start Structures There are four options. Sole ownership Partnership Company Trust The following options apply to married or de facto couples: Sole Ownership It could be desirable for the partner who has the higher income to own the property if the project is expected to make losses. In this way, the advantage…
PAYE
These notes assume you have only a few employees. When PAYE deductions exceed $100,000 per year ($500,000 from 1 April 2009) the rules change. Who is an employee? If someone comes to you and says they are self employed, even if they are registered for GST, you must still check to see if you…
Home Office
Where a business is operated from home there is the ability to claim as a tax deduction the expenses which relate to the proportion of the home used for business purposes. For example, if a bedroom is set aside as an office for your 4Life business and the area of this room is 10% of…
A brief guide to GST
GST returns are a fertile area for mistakes. To flesh out your knowledge, refer to IRD publication IR 375. When the term “goods” is used in this information sheet, read “Goods and/or services”. GST Speak It is important to get used to the terminology. Mistakes arise from misunderstandings when people use their own words.…
Things to consider when buying a business
Income How much is the total income to owners, including any company profit? Ask for five years’ accounts Have these accounts been prepared by a qualified accountant? If not, how do you know how the figures have been put together? If not supplied, insist on having the balance sheets. They provide a wealth of information…
Asking your bank for a loan
If you require finance for your business look at the problem from the bank manager’s point of view. If you were in his/her shoes you would want the following. The borrower Information about the borrower including management skills and experience in the industry. This is no time for modesty. You are trying to persuade…
Entertainment Expenses
To help determine whether expenditure is 50% deductible or 100% deductible, look for a reasonable amount of personal benefit from the entertainment. If this exists, it is likely the expense will fall into the 50% group. Entertainment is not deductible at all unless it is incurred for business purposes. Keeping the evidence IRD expects…
Advertising
Writing the advertisement Advertising is only one of many ways to market your business. It is probably the most expensive and often the least effective. You do not need to advertise to make your business grow. The Body Shop is said to have never advertised. Advertising ranges from the newspaper, magazines, television and radio to…
87 Ways To Cut Down Your Taxes
Disclaimer This document is provided only on the basis of being an aid to understanding tax and levy issues. BDS Chartered Accountants Ltd do not undertake or guarantee this material is a complete solution to all or any issues encountered by the purchaser. Users of this material are expected to seek professional advice before acting…
Four top time-saving tips
Not enough time in the day to get everything done? Try these tips to keep calm and increase productivity. Having a huge to-do list can lead to task paralysis. Not everything is your #1 priority. Put three things on your list to hone your focus, and do those first. Checking emails every 10-minutes? It’s…
Rental losses ring-fenced from 1 April 2019
The new law on ring-fencing rental losses is now in force, which means: In most cases ring-fenced deductions will be carried forward and can only be used against residential rental or sale of property income in future years. Property investors will, in most cases, no longer be able to reduce their tax liability by offsetting…
10 inspirational podcasts for business owners
Spend a bit of time commuting or travelling for work? Podcasts are the new radio. Here are 10 free series that will educate and entertain whether you’re going long distance on a sales trip or stuck in city traffic. Find them on the author’s website, Spotify or iTunes. TED Talks are super popular and there are thousands to…
Protection with patents and trade marks
If you’ve got a new invention, are launching a brand or marketing a new stream of business, it’s important to consider whether you need a patent or trade mark. Both take at least six months to process in New Zealand, so the sooner you do your homework, the better. A patent is granted for…
Pay your taxes by cheque?
Five new ways to do it. If you normally write a cheque to pay for your taxes, it’s time to decide how you will pay in the future. As of 1 March 2020, Inland Revenue will no longer be accepting cheques. By the end of the last financial year (June 2019), only around 5% of…
R&D – is it for me?
Are you looking to take your business to the next level? Introduce new revenue streams? Dig deeper into the science or technology …
Five simple ways to finish the year
Is less stress at the top of your Christmas list? For the sake of your sanity and the best interests of your business, follow these steps to remain calm and collected as the year comes to a close. Outsource! Look at everything you need to do before 25 December. Is it doable without losing the…
Getting holiday pay right
Do you have staff taking leave over Christmas? Are systems in place to make sure everyone gets what they’re entitled to? Even if someone else handles your payroll, you are responsible for making sure holiday pay and leave payments are handled correctly. Remember: Whether your staff work full-time, part-time, casual, on-call, or shift work, they’re…
New Trusts Act 2019:
What you need to do If you’re protecting your family property in a trust, there may be changes you need to make before the new Trusts Act comes into force in January 2021. The changes to the Trusts Act (the first in more than 60 years!) aim to make trust law more efficient and accessible,…
New GST on low-value imported goods
Overseas businesses selling goods valued at $1,000 or less online to New Zealanders are now required to register for, collect …
Business health check
Cash flow is essential at this time of year, so if chasing late payments makes you feel uncomfortable, outsource those phone calls …
How to Advertise for your Business
Here are some basic guidelines to follow when doing advertising. Writing the advertisement Advertising is only one of many ways to market your business. It is probably the most expensive and often the least effective. You do not need to advertise to make your business grow. The Body Shop is said to have never…
Why closing the gender pay gap is good for business
On average, Kiwi women earn 9.2% less than men While the gender pay gap is smaller than a decade ago, a collection of top New Zealand business people are working hard to reduce it further. CEOs and Chairs from companies such as IBM, Saatchi and Saatchi, PwC and Vector have joined Champions for Change. Together,…
Work. Sleep. Eat. Repeat?
Find a better balance with these helpful hacks Working harder is not always smarter. Burnout is common among business owners and staff who are pushed to the limits. Ultimately, it’s not good for business or your personal life to be burning the candle at both ends. But how on earth are you expected to fit…
The busy person’s guide to stress-free performance reviews
How well are your staff performing? Do they love their job? Performance reviews, an open two-way conversation held once or twice a year, are a great way to find out. While you’re not legally bound to do appraisals, they’re a great tool to keep your business running smoothly. Open communication lines earlyWhether you have five…
Property sales on IRD radar
Buying or selling a home? You’ll now need to provide your IRD number as part of the transaction process. The change will allow IRD to know who’s flipping owner-occupier homes on a regular basis, and better enforce the existing law that ensures people pay tax on the profit. The move won’t impact the rules…
Business health check
Get familiar with the flexible work legislation and take ideas from the Flexible Tool Kit. Take a good look at your business metrics and cash flow and if things aren’t looking as flash as you’d like, or expected, give your accountant a call for advice. Check out the Headspace app for short, easy meditations on…
What is your business doing to attract the next generation?
Gen Z (born after 1995) are tech-savvy, entrepreneurial, out-of-the-box thinkers – people you want on your team. Here are …
Facebook: Why your business needs it
Are your ideal customers adults? Then your business needs to be on Facebook because that’s where their eyeballs are. Time-poor …
Today’s apprentice is tomorrow’s foreman
Why apprenticeships work so well With New Zealand’s construction industry going ballistic, a lot of construction companies …
Own residential property? Take note!
In an effort to level the playing field between property investors and home buyers, a new law ring-fencing rental losses looks set to come into effect on 1 April 2019. It means you’ll no longer be able to offset tax losses from your residential properties against other income (e.g. salary or wages, or business income).…