Gilmore Taylor Associates Ltd Blog

Phone and email scams

Phone and Email Scams

 

 

 

We are receiving reports of phone scams relating to money owed to the IRD, see the recent story in the New Zealand Herald about similar cases:

 

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12048638

 

Another example of recent scams on the IRD website below:

 

The automated message is in a New Zealand accent and asks the caller for their name and IRD number. It states: "This is the Police, you owe money to Inland Revenue. If you don't pay you will be arrested. Please call 04 889 0505." This is not the New Zealand Police.

 

Please remember that government agencies will never call you to ask for your bank account or credit card details. If you receive a call like this and have any doubts about its legitimacy, double check their details or simply hang up the phone.

 

Anyone who believes they are a victim of any crime, in person or online, should report the matter to their local Police.

 

Fake forms supposedly from the IRD

 

There are several different phishing emails reported recently. Most contain links in them that take you to fake forms that are trying to make you believe they belong to IRD.  One email is asking for you to reply to it with personal and credit card details.

 

These emails are sent from a variety of addresses.  If you have clicked on the form and submitted any personal or credit card data please contact your bank immediately. We also recommend you contact IDcare at www.idcare.org or phone 0800 201 415.

 

 

Business owners who keep good books sleep easy

Keeping good business records can lead to a good night's sleep is the main message in Inland Revenue's latest campaign targeting the hospitality industry.

Hospitality is considered a high risk industry group as part of Inland Revenue's long running hidden economy programme to identify undeclared income.

Customer Segment Lead Richard Philp says there's a disproportionately high number of overdue GST, income tax and PAYE payments from traders in the restaurant, café, bar and takeaway food sectors.

"Commonly we find those operators who fall behind on their tax obligations also have poor business records.

"We see things like unrecorded sales, staff wages off the books and discrepancies between supplies bought and goods sold.

"Failing to keep good records can lead to some difficult conversations about tax but luckily we're here to help."

Both the business.govt.nz and Inland Revenue websites are full of valuable information on how to run a successful business including keeping good records, time management and basic tax responsibilities.

"It's easy to let paperwork go, especially in the hospitality business where everyone is constantly under pressure," Mr Philp says. "But having good systems in place can make life much easier when it comes to filing GST and tax returns.

"There are software packages on the market to help businesses of any size to log income and expenses – and the purchase of them is tax deductible.

"Even a simple spreadsheet can work just as well."

Maintaining good books not only helps with tax obligations but also provides a more accurate view of cash flow, allows greater access to finance and ensures a business is correctly valued.

Mr Philp says the vast majority of hospitality businesses are paying the right amount of tax and have great bookkeeping practices but there are some which create unwanted stress for themselves by not being on top of such an important aspect of their business.

"Knowing the books are all in good order takes a huge weight off a business owner's shoulders and is worth it to sleep easy at night."

 

 

Supporting the New Zealand small business economy

There is no denying that small businesses are the backbone of New Zealand. They make up 97 percent of our businesses and contribute to almost a third of our GDP. Some might say it's our entrepreneurial spirit, others, our DIY nature – if we want something, we get on and do it. Regardless of what drives it though, it's clear that the survival and growth of small businesses in New Zealand is essential to a strong economy.

We've been working with small businesses for more than a decade now. Each day we throw ourselves into better understanding the challenges and opportunities they face, with the sole purpose of having a positive impact on the world by growing small businesses.

It's from this passion that Xero Small Business Insights was born. Built on a trusted and robust data set which has been drawn from our 300,000 plus subscribers and created from the desire to better understand and to help champion the small business cause.

Here's a look at how it works and the revolutionary insight we expect it to provide.

How it works

Xero Small Business Insights provides a snapshot of the sector's health, updated monthly. It's metrics – which are based on anonymised, aggregated data from hundreds of thousands of our subscribers – provide insights into five key areas of small business health. The result is a picture of business conditions that's more comprehensive than most private surveys, which often have a far smaller sample size, and more frequently updated than other New Zealand data on small business.

What it shows us

Xero Small Business Insights centres on five key pillars – cash flow, getting paid, hiring people, trading overseas and cloud adoption. These metrics can help decision makers better understand the opportunities and challenges small businesses face, whether that's looking at the best month to hire staff, or the average number of days it takes for them to get paid (spoiler alert, it still takes too long).

Our expectation is that month on month, we will be able to see relevant business trends in real-time, as and when they happen.

Why it's important

It's our hope that this data will serve to inform policymakers, large enterprises and even small businesses themselves, allowing them to make better decisions to support both the small business economy and the wider New Zealand economy.

Our independent economist, Cameron Bagrie also highlights the importance of this data:

"Xero Small Business Insights represents a big step forward in the availability and potential use of information to add value and provide intelligent customer insights on small business trends. It harnesses the collective financial information of a big chunk of the New Zealand economy and over time, Xero Small Business Insights has the potential to be one of the most powerful gauges of economic and financial trends across the New Zealand economy."

This article was prepared by Xero using Xero Small Business Insights data, for the purpose of informing and developing policies to promote small business in New Zealand. It contains general information only and should not be taken as taxation, financial, investment or legal advice. Xero recommends that readers always obtain specific and detailed professional advice about any business decisions.

 

Types of employee

 

 

Types of employee:

There are several types of employee.

Permanent employees (full or part-time)

These are the most common type of employee. Permanent employees have the full set of employment rights and responsibilities.

Employees have to meet certain criteria to qualify for some employment entitlements, such as parental leave, parental leave payments, annual holidays, sick leave and bereavement leave. There may be small differences between full-time or part-time employees because of their work patterns.

Fixed-term employees (full or part-time)

A fixed-term (temporary) employee's employment will end on a specified date or when a particular event occurs. A fixed-term employee might be someone who is brought in to replace another employee on parental leave, to cover a seasonal peak or to complete a project.

There must be a genuine reason based on reasonable grounds for the fixed term and the employee must be told about this reason.

Seasonal employees

Seasonal employment is generally a type of fixed-term employment where the employment agreement says that the work will finish at the end of the season. It's commonly used in the fruit, vegetable, fishing and meat industries, for example, in a job picking apples when they ripen, after the work is completed (when all the apples are picked) the employer doesn't need the workers and the fixed term ends. In some situations, seasonal employment can become a rolling fixed-term employment in which the employee is re-hired at the start of every season.

Part-time and full-time employees

Whether you're considered to be part-time or full-time depends on how many hours you have to work. Employment legislation doesn't define what full-time or part-time work is, but full-time work is often considered to be around 35 to 40 hours a week. For statistical purposes, Statistics New Zealand (external link) defines full-time as working 30 hours or more per week. You have exactly the same employment rights and responsibilities if you're a part-time or full-time employee.

A full-time permanent employee might be someone working 9am to 5pm, five days a week. An example of a part-time permanent employee is someone who regularly works the same 3 days a week for eight hours each day, for a total of 24 hours a week.

Casual employees

'Casual employee' isn't defined in employment legislation, but the term is usually used to refer to a situation where the employee has no guaranteed hours of work, no regular pattern of work, and no ongoing expectation of employment. The employer doesn't have to offer work to the employee, and the employee doesn't have to accept work if it's offered. The employee works as and when it suits both them and the employer. This can sometimes happen because it's hard for the employer to predict when the work needs to be done, or when the work needs to be done quickly. Each time the employee accepts an offer of work it is treated as a new period of employment.

If you are employed to do casual work, the arrangement must be made clear in your employment agreement.

Employment rights and responsibilities also apply to casual employees, but the way in which annual holidays, sick and bereavement leave are applied can vary for these employees.

 

GST loophole closed to offshore companies

The Government is to close a loophole that gives offshore companies an advantage by not requiring them to collect GST on all goods sold to local consumers.

"Domestic businesses have long called for greater fairness in the treatment of low-value goods from offshore retailers," says Revenue and Small Business Minister Stuart Nash. "Foreign companies are not required to collect GST on goods under $400. We are now calling for feedback on a system to register these suppliers for GST."

"There are more than 26,000 small businesses employing more than 62,000 people in the retail sector. Many are in competition with foreign firms who enjoy this tax break. Local firms compete on an uneven playing field. Large multinationals sell exactly the same product into our market without collecting GST.

"Small businesses such as bookshops have convincingly argued they are penalised by a system which is badly out of date. It's particularly difficult for very small shops outside the main centres. Some Kiwi firms are doubly disadvantaged, as online retailers who sell into Australia will soon pay GST to the Australian Tax Office," Mr Nash says.

"GST has always been payable on low-value goods but it is not cost effective for Customs to collect it when it is $60 or less," says Customs Minister Meka Whaitiri.

"GST is collected at the border for goods over $400. We propose making offshore suppliers collect GST on low value goods at the moment of sale, and in turn, buyers of these goods will no longer pay Customs tariffs or border security and biosecurity fees. This will simplify compliance and administration costs at the border. This supports the focus of Customs to make cross-border transactions easier without compromising the need to keep out illicit substances and materials," says Ms Whaitiri.

"GST has been collected on services and digital products from offshore, such as streamed movies and music, since 2016. This extends that to goods," says Mr Nash.

"I acknowledge the work of the previous Government which agreed to a GST Discussion Document in July 2017. It forms the basis of the document released today. The former Revenue Minister Judith Collins got the ball rolling on this and it is a pleasure to complete her work. This is an example of an issue with cross party support.

"I also thank the Tax Working Group for its advice to proceed with the proposal. It is consistent with our GST framework, which is broad-based, low-rate, and applies to goods and services traded across borders and consumed here," Mr Nash says.

 

 

One week left to have your say on the future of tax

New Zealanders have a week left to submit their ideas on the future of tax.

The Tax Working Group's public consultation closes on Monday 30 April after eight weeks of gathering thoughts on the structure, balance and fairness of the tax system.

The public's feedback will be used to influence an interim report to Ministers due in September. A final report of recommendations is due in February 2019.

Group Chair Sir Michael Cullen says the response to this consultation so far has been excellent.

"There has been a steady flow of people visiting the website and going through the information.

"The quick polls have been popular with more than 10,000 responses so far and it's encouraging that a good proportion of those votes have been followed up with a submission."

Sir Michael says it's important that anyone with a strong opinion on the future of tax takes the time to make a submission.

"No decisions have been made and the Group has a great deal of work to do before coming up with any recommendations.

"It's rare to have an opportunity to influence the future of tax so I would encourage anyone who has been thinking about making a submission to get on to the website and have their say before the window closes.

"All New Zealanders have a stake in the design of a future tax system so it's important that we hear as many different perspectives as possible."

Making a submission is easy at https://taxworkinggroup.govt.nz. Submissions close on Monday 30 April.

 

 

Brief IR shutdown for major system upgrades

Inland Revenue's customer services will be unavailable for just over four days this week as it rolls out the next stage of its programme to transform the tax system.

myIR will be switched off from Thursday afternoon at 3pm until Tuesday 17 April at 8am so the latest round of changes can be made.

Inland Revenue contact centres and front of house services will also be closed but customers will still be able to pay accounts using online banking as usual.

Deputy Commissioner Transformation Greg James says the timing for the shutdown has been carefully selected after working with a number of heavy users of myIR to find the most convenient time.

"Moving these tax types and the associated data over to our new computer system is no small task so we're taking the system offline to allow a smooth transition."

ir-File, used by businesses to submit Employer Monthly Schedules will be unavailable from midnight on Wednesday.

http://www.ird.govt.nz

New services coming for myIR

Business customers will notice the biggest changes when they log in on Tuesday with the introduction of a new `My Business' section in myIR. It will include the ability to file, pay and amend GST as well as fringe benefit tax and gaming machine duty.

A new provisional tax option has also been introduced this month. It's called AIM or the Accounting Income Method and ensures small businesses will only have to pay provisional tax when they are making a profit.   "We are building up a set of products that are all designed to make tax simpler," says Mr James. "AIM will be a cash flow game changer while the new `My Business' section brings more tax types online and all in the one place."

Almost 14,000 people have attended either online presentations or a series of seminars around the country to preview the improvements.

Extra seminars were put on in some places just to meet the demand of customers and tax agents wanting to know how the changes will affect them.

"There has been a series of dress rehearsals in recent weeks to prepare for the migration of data on to the new system and over the last year every aspect of `My Business' has been heavily user tested to ensure customers have the best possible experience when they log back in on April 17," Mr James says.

Find out more about the changes for businesses at www.ird.govt.nz/mybusiness

 

Cryptocurrency investors reminded of their tax obligations

Cryptocurrencies are treated like property for tax purposes in new Inland Revenue guidance published today.

Bitcoin, Ethereum, Ripple and Litecoin are some of the well-known examples of cryptocurrencies, which is essentially money that exists only in digital form.

The currency is usually encrypted using Blockchain technology that regulates the generation of new units and verifies fund transfers. It operates independently of any central bank and can be transferred without going through a bank.

Inland Revenue Customer Segment Leader Tony Morris, who oversees this work programme, says trading in cryptocurrencies may happen in a digital realm but tax obligations still apply in New Zealand.

"Inland Revenue has responded to requests for guidance by issuing some common questions and answers on our website so that everyone knows their responsibilities.

"Just like with property - when you acquire cryptocurrency for the purpose of selling or exchanging it, the proceeds you make from selling it are taxable.

"The purpose is hard to argue here since with Bitcoin and other cryptocurrencies, generally the only time they produce an income is when they change hands."

Tax is also applied when one cryptocurrency is swapped for another. You don't need to cash out to dollars to create a tax obligation.

Likewise, if you receive a cryptocurrency as payment for goods or services, this is considered business income and is taxable.

Tax rules for foreign exchange don't apply when it comes to cryptocurrencies.

"It's important to keep good records of your transactions as this information will be useful when filing a tax return," says Mr Morris.

"Let Inland Revenue know if you think you haven't got your past tax returns right so that it can be corrected.

"Operating in the digital world doesn't absolve you from your tax obligations. It also doesn't mean your activity is untraceable."

Read the guidance here: www.ird.govt.nz/cryptocurrency

 

 

3, 2, 1… blast off to NZ payroll end-of-financial year

Launching a star into orbit, splitting the atom, climbing Mt Everest, and building a successful business: they're all things that can take a lot of time and energy. Luckily, payroll in Xero makes processing end of year so easy that you'll have plenty of both left over to work on your own pet projects.

Things that make your life easier

  • Xero takes care of changes to the annual ACC earner levy threshold – it's going up to $126,286 – and the student loan threshold – which is increasing to $374 a week – for you.
  • From 1 April 2018, you'll be able to select an ESS tax code when processing employee share scheme (ESS) benefits through payroll, making your life a whole lot easier.

What you need to do

  • You'll need to change the hourly rate for some employees. The minimum wage is increasing by 75 cents to $16.50 on 1 April 2018. Both the starting-out and training minimum wage rates increase from $12.60 to $13.20 an hour.  See how to change an employee's salary and wages details.
  • Before the first pay run of the new tax year, you'll need to review the ESCT rates, to make sure they are based on what employees actually earned for the previous tax year. This is done from the Taxes tab for each employee.

 

Minimum Wage Rises

 

Minimum wage rises by 75c on 1 April 2018

The minimum wage is going up from $15.75 to $16.50 per hour. Here's what you'll need to know for your business.

When: 1 April 2018

What: The new minimum wage rates are:

  • Adult - $16.50 an hour
  • Starting-out - $13.20 an hour (up from $12.60)
  • Training - $13.20 an hour (up from $12.60)

Starting-out and training minimum wages are 80% of the adult minimum wage. Read our page on minimum pay rules for a summary of who can earn the different rates.

Why: Government must by law review the minimum wage rates every year.

What you'll need to do: You and your staff can agree to any wage above the minimum rate. If your employment agreements are a few years old, you can use this as a chance to update them using our easy to use tool, the Employment Agreement Builder. Note that it is a legal requirement to have a written employment agreement with all your staff.

Tip: If you pay staff minimum wages, recalculate your budget for the rest of the year - you'll be paying out more in wages.