Gilmore Taylor Associates Ltd Blog

 

Changes to online returns

From April next year you'll start filing employer returns in our updated online services. There will be changes to how you upload information, and how the services look.

We'll have more information about what you can expect before the end of the year.

Payday reporting

The Government has proposed changing when you file employer returns. The proposal is to file returns based on your pay cycle instead of the calendar month.

You'll have time after your payday to file the returns - they won't be due on the payday. The payment due dates for your PAYE and other deductions won't change.

There are benefits to payday reporting.

  • You'll be able to file returns when the information is at hand - instead of holding on to it for later.
  • We'll have more up-to-date information to work out tax and entitlements more accurately. We want to make sure everyone pays and receives the right amounts during the year.

If the proposals become law, payday reporting will be voluntary from April 2018 and required from April 2019.

Other proposals include:

  • lowering the threshold for when you must file online, and
  • removing the payroll subsidy.

 

Sharing information to combat global tax evasion

It's important everyone pays the right amount of tax. That's why the New Zealand Government has signed up to the Automatic Exchange of Information (AEOI) - an international initiative to combat global tax evasion.

We're one of 100 countries who've committed to share information about foreign tax residents with financial accounts in New Zealand. In return, we will receive information about New Zealanders with overseas financial accounts.

This means your financial institution may ask you about your tax residency.

Unsure about your tax residency? Find out how your tax residency is determined below.

https://www.ird.govt.nz/international/residency/personal?id=201706SharedInfo

 

 

Plan for calving – includes talking to workers about the risks

Farmers preparing for calving should also be thinking about effective ways to keep workers safe and well, said Work Safe's Agriculture Sector Lead Al McCone.

"Calving is a challenging time in terms of health and safety and there's a lot to think about from setting up calving sheds and putting together calving kits, to managing hygiene and planning staff rosters.

"On the safety side, slips, trips, falls and kick injuries are high safety risk factors during calving. Cattle should only be handled by suitably experienced people who know the hazards and how to avoid them.

"Planning by identifying the risks and working out how to manage them will ensure the farm keeps operating efficiently. Have a team meeting before calving starts and develop a plan together to handle the risks and to ensure people also eat well, keep hydrated and have sufficient breaks." Mr McCone said.

Mr McCone said fatigue is a risk in busy periods.

"Workers need to ensure they get good rest and maintain a work life balance. While fatigue can cause or worsen physical and mental health problems, it can also affect work performance and lead to accidents."

To reduce on-farm fatigue, review work rosters and hours, and encourage workers to get adequate rest and exercise, and maintain a healthy diet to sustain them when busy.

"Hygiene must be a major focus too. A bucket of water, soap and towel in the shed doesn't cut it. Workers need a clean place to wash hands and faces. That should include running water, liquid soap and a hygienic way to dry their hands, such as paper towels."

Diseases that can be transmitted from animals to humans include campylobacter, cryptosporidiosis, E. coli, leptospirosis, listeriosis, milker's nodules, ringworm, salmonella and streptococcus. Farm workers can become ill through small cuts or abrasions, by getting animal blood, urine or faeces splashed in eyes, nose or mouth, or through cross contamination via hands.

"Workers should all have appropriate personal protective equipment (PPE). Hands should be covered so suitable disposable gloves should be provided. Waterless alcohol-based hand rubs can sanitise visibly clean hands," Mr McCone said.

Workers should take off their stock-handling PPE on leaving the cattle shed, and wash before eating drinking or smoking.

"Everyone being involved in the planning process is essential. Make sure everyone knows their role, what the risks are and the best ways to mitigate them. By working with your team to establish and communicate a safety and wellness plan, you'll limit the risk of staff sickness or injury at such a key time," says Mr McCone.

 For more information, visit www.saferfarms.org.nz

ACC motor vehicle levies

ACC motor vehicle levies

From the 1 July 2017 the average annual ACC motor vehicle account levy, which includes the annual licence levy and the petrol levy will be reduced from $130.26 to $113.94 per vehicle. This is a reduction of 12.5%.

The new motor vehicle levy rates apply for the next two years, and will save motorists more than $113 million over two years.

Motorists will pay a lower ACC petrol levy when they fill up at the pump, a 13% reduction from 6.9 cents to 6 cents a litre.

The motor vehicle levies cover the costs of accidents on public roads involving vehicles. 

Electric vehicles and plug-in hybrid electric vehicles will be classed with petrol driven vehicles and will pay the same lower levy. Previously these vehicles were classed as 'non-petrol' and paid all of their ACC levy through vehicle licensing fees, similar to diesel-powered vehicles.

Motor vehicle owners, can find out what the ACC levy portion of their car registration will be.

Annual licence levies for motorcycles will remain at current levels.

If you received a rego reminder before 12 July 2017, a change to the Accident Compensation (Motor Vehicle Account Levies) Regulations 2017 may affect you. The change corrects an error with the levy rates affecting the ACC component of the licence. You'll be charged the right amount from 12 July, but this may be different than what's shown on your rego reminder.

If you have and questions about this change, please contact our team.

Phone 09 470-1820

Email: accounting@gilmoretaylor.co.nz

 

 

CASH is not profit - and vice versa

The purpose of a business is to make money, and that means you have to know the difference between profit and cashflow.

Net profit is what you have left after you deduct all your business expenses from all your revenue. You change net profit only by changing the things that affect revenue and expenses.

For example, if:

  • You renegotiate with your suppliers, you may get stock cheaper, or carry less inventory
  • Your staff engage with customers better, you can learn more about what they do and don't like - and get more business
  • You can roster staff differently, you may be able to run your business more efficiently

Cashflow comes from various sources. However, it also covers operating expenses, taxes, equipment purchases, repayments, distributions, and so on.

Note that a profitable business does not always have good cashflow. And a business with good cashflow is not always profitable. For example, you can have good cashflow, and loss-making expenses.

To work out how fast you can grow your business, you need to look at your projected cashflow. We can advise you on  this.

 

 

Keep cash crowned as king

 

 

If you want to succeed in business, understand that Cash is King. Your business can't survive without cash.

The following six takeaways are essential for business success:

  1. Protect your cash position, by knowing what it is. Build a cash flow statement and always keep it up to date. If you foresee shortfall, start at once to fix it. 
  2. Create a cash buffer as an insurance against unexpected difficulties.
  3. Protect your cash position against revenue shocks, by maintaining a balance equivalent to at least two months of operating expenses
  4.  Be realistic with revenue expectations. Take action now if it looks like sales are not going to get you to breakeven.      
  5. Credit checking upfront will reduce the risk of customer non-payment. Follow up with clear payment terms agreed in writing. Communicate regularly with customers. And automate where possible.
  6. Every dollar you spend reduces cash reserves. The best way to protect your cash is to create a budget for the spend you know you need, and stick to it.  

      

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ACC- new digital servie

ACC Have just launched a new digital service for their small to medium business customers to manage their ACC levies online.

For more information or to create a log in, follow the link below:

https://www.acc.co.nz/myacc-for-business

Who is an officer?

A good read - article by HRINZ

There has been equal parts fanfare and scaremongering following the introduction of the Health and Safety at Work Act 2015, which took effect on 4 April 2016.  One of the key changes from the previous legislation is the focus on the top table of organisations, particularly the obligations and liabilities of directors and chief executives.  This has resulted in a lot of uncertainty and questions, and reportedly led to Peter Jackson resigning as a director of Weta Workshop.

The Act establishes a number of "duty holders" each of which is required to perform their statutory duties in order to ensure workplace health and safety.

The primary duty holder is the person conducting a business or undertaking ("PCBU").  The PCBU will typically be a legal entity, such as a company or partnership.

An "officer" of a PCBU has a duty to exercise "due diligence" to ensure that the PCBU complies with its duties.  The Act sets out the reasonable steps that an officer must take in order to satisfy the due diligence duty.

Under the previous legislation, the officers, directors, or agents of a body corporate or Crown organisation only became liable if they had directed, authorised, assented to, acquiesced in, or participated in the failure of the body corporate or Crown organisation.  In essence, officers under the previous legislation had secondary liability.  Under the new Act, officers have primary liability – an officer could be found guilty of having failed to exercise his or her duty of due diligence regardless of whether the PCBU has failed to meet any of its obligations.  The implications of such a failure are also now much higher: a term of imprisonment of up to 5 years, or a fine of up to $600,000 for the most serious offence.

It is therefore important for organisations to take steps to identify who are its officers, and for senior executives to understand their obligations, including at the point they are recruited.  However, the process involved is not altogether easy.

Some people can be readily excluded from the officer classification.  Consistent with the fact that duties under the Act cannot be transferred, or contracted out of, someone who merely advises, or makes recommendations to an officer is not, themselves, an officer.  Helpfully, WorkSafe has also advised on their website that the mere inclusion of the word "officer" in a job title (e.g. a Police Officer) does not result in officer status.

Equally, some people can be readily included in the officer classification.  The first part of the officer definition in the Act defines officers by reference to the PCBU.  For example, if the PCBU is a company, any person who is a director of that company will be an officer; or if the PCBU is a partnership, any person who is a partner will be an officer.  Chief Executives will also be included by virtue of their specific inclusion in the second part of the definition.

It is the second part of the definition, however, that gives rise to difficulty in identifying a PCBU's officers.  It states that an officer includes:

…any other person occupying a position in relation to the business or undertaking that allows the person to exercise significant influence over the management of the business or undertaking.

There is a lot of room for argument as to the meaning of the words "exercise significant influence" and they have not yet been tested in the courts. 

Some guidance can be derived from Parliament's intentions in respect of the definition.  The Transport and Industrial Relations Committee, in its report on the Health and Safety Reform Bill, which recommended changes to the definition, stated that:

The designation 'officer' should be confined to people in very senior governance roles, such as directors and chief executives.  (Emphasis added).

WorkSafe says that "officers have a duty because they make policy and investment decisions that can affect workers' health and safety."

A recent decision of the Industrial Court of the Australian Capital Territory (McKie v Al-Hasani and Kenoss Contractors Pty Ltd (in liq) [2015] ACTIC 1) considered a different definition of officer, but is nevertheless of interest.  In concluding that a project manager was not an officer, the Court placed significant weight on the distinction between "operational" roles, which are not officers, and "organisational" roles, which are.

All of the guidance indicates that officers will be a reasonably narrow band of people at the top of an organisation.  However, care needs to be taken in conducting the classification exercise.  It is also important to remember that an internal decision as to who is an officer will not ultimately trump the statutory definition.  Accordingly, where there is doubt, it may be preferable to have everyone at your organisation's top table acting as though they are officers because the consequences of getting it wrong could be significant.  

Budget 2017

Parental leave changes - July 2017

New parental leave rules

When: 1 June 2017.

What: Parents who want to get parental leave payments can choose to first use other types of paid leave they're entitled to, eg:

  • annual leave
  • alternative days
  • special leave
  • time off in lieu.

They can choose to start their 18-week parental leave payment period once they have taken other types of paid leave - even if this is after the child's arrival.

Previously the parental leave payment period couldn't start later than the child's arrival.

Any eligible working parent can get parental leave payments if they are the permanent primary carer of a child under six.

This applies to employees, including those with non-standard working arrangements such as casual, seasonal, temporary and fixed-term employees, and self-employed people.

Premature babies

When: 1 June 2017.

What: If a working parent is applying for or getting parental leave payments and their baby arrives before the end of 36 weeks' pregnancy, they can get:

  • preterm baby payments for up to 13 weeks
  • parental leave payments when they go back on parental leave - if it's no later than the original expected due date.

If they go back to work for a period between the preterm baby being born and the original expected due date of the baby - other than for their keeping in touch hours - they will lose any remaining entitlement to preterm payments.

But they'll still be entitled to up to 18 weeks' parental leave payments - or however many weeks are remaining - if they've stopped work before the original expected due date and if the baby hadn't been born prematurely.