CG Update December 2021

What a year! Who would have thought this time last year we would have been in and out of lock down with Covid having such an impact on our lives, businesses and dominating many of our conversations. Some of our clients and families have been affected more than others and our thoughts go out to them. As a country we must learn to live with this pandemic and box on, we hope we can but expect that 2022 will not be all plain sailing.

Office Xmas Hours: Our office will close on Thursday 23^rd December and reopen on Monday January 10^th 2022.

Staff News: For those of you who haven’t heard, our long serving receptionist, Shelley Usmar, passed away in November. Shelley worked for Candy Gillespie for over 24 years and always greeted clients with a welcoming smile or voice on the phone. Shelley will be sadly missed.  

Keith Rea retired in April after more than 52 years in the firm. Keith comes into the office now & then to catch up and is working hard on reducing his golf handicap and enjoying a well-earned retirement.

Since our last newsletter, we have had two new staff join the firm. Jess Talbot is working in Keith Earl’s team having recently worked at Deloitte. Jess is a keen wake boarder and will be showing us all up at our next staff water ski night. Ceri Tarry joined us in November from another local accounting firm. Ceri is in Alan Candy’s team and comes to us with loads of farm accounting experience.

Candy Gillespie Covid Policy:

For the safety of all our staff and clients, we now have an office covid policy. All clients are welcome to visit the office but we ask that you observe the following:

- All visitors MUST please scan in or record your visit when you arrive.

- If you are unvaccinated you must wear a mask and social distance 1m.

- If you are sick or unwell, please reschedule your appointment.

Covid 19: As the country navigates its way through the traffic light system, government assistance is still available.

- There are no additional rounds of the Resurgence Support Payments & Wages Subsidy planned. Wages subsidy applications are now closed. The 4^th – 6^th Resurgence Payments (22 Oct – 1 Dec period) are open for applications until the 13^th January 2022.

- There is a one-off Transition Payment to help businesses transition to the traffic light system, businesses must have experienced a 30% drop in revenue over a 7 day period. The final day to apply is 13 January 2022.

- Short-term Absence Payment and Leave Support Scheme – this is available to help pay employees who are required to stay at home and await test results or are required to self-isolate, where those employees are unable to work from home. Applications can be made at www.workandincome.govt.nz.

- Small-Business Cashflow (Loan) scheme – Applications for this remain open until 31 December 2023. It is interest free provided you repay it within 2 years of draw down, otherwise interest starts at day 1. You may be able to repay the loan and draw it down again to extend the interest free period.  

- Paying tax – if you are struggling to pay your tax or can’t pay your tax because of Covid, the IRD may be able to help by cancelling interest and penalties if you contact them and set up an instalment arrangement.

Tax Tips & News:

- From 1 April 2021, the top individual tax rate for income over $180,000 is 39%

- Brightline Test – if you purchase a residential property that is not your main home and it is sold with 10 years, any capital gain is taxable. For new builds the timeframe is 5 years.

- Sick Leave entitlement changed to 10 days as from 24^th July 2021.

- If you make IRD payments online, please be sure to pay them into the correct Tax Type, Tax Period (Year) and use the correct IRD number.

- If you miss a Provisional Tax payment (even by one day) please get in touch with us so we can arrange an alternative payment through Tax Pooling. If it’s late, you will fall out of their “Safe-Harbour” tax regime. This means that the IRD will charge ongoing Interest (UOMI) even after you have paid. Using Tax Pooling to catch up on late payments can significantly reduce this interest and avoid penalties.

Land Purchase Price Allocation: The IRD have introduced new rules around having values of individual assets in sale and purchase agreements. We recommend that you talk to us on what values to include. If the values aren’t agreed prior to settlement, the IRD may determine what these values are which could have an unfavorable tax outcome for you.

Cyber-attacks: These are becoming more regular and sophisticated as attackers target businesses by encrypting files that stop you from accessing software and systems. To protect your business

- Use multi-factor authentication. It’s said to protect businesses from 99.9% of cyber-attacks

- Watch out for strange email, websites or links. DON’T OPEN THEM.

- Install software updates as soon as they are available

- If you suspect the worst, go offline immediately by unplugging your computer network cables and your router.

Christmas Parties, Gifts & Bonuses: A reminder at this time of the year

- Entertainment costs for Xmas Functions are only 50% deductible.

- Food & drinks given to staff are only 50% deductible

- Gifts to customers that don’t include food & drink are 100% deductible.

- Christmas bonuses by way of cash (wages) are taxable to employees as part of the PAYE system. Be aware, Bonuses are taxed in a different way to regular wages.

- For businesses, non-cash bonuses (e.g. gift cards or fuel vouchers) are exempt from tax provided the total value per staff member is below $300 per quarter and the total value for the employer per year is below $22,500.

Working on Public Holidays: A reminder at this time of the year if an employee works on a public holiday which would otherwise be a work day (e.g. this year Christmas is on a Saturday and the employee usually works on a Saturday), they are entitled to receive time & a half plus a day in lieu. With the new legislation, Mondayisation happens when an employee’s public holiday which falls on a Saturday or Sunday is moved to the following Monday or in some cases Tuesday. Be careful and talk to us if unsure.

Our Predictions for 2022

-     Interest Rates                -- Interest rates will go up by 1.5% but then flatten off

-     Politics                          -- Will we see the return of a democracy?

-     Covid 19                        -- We are in for some headwinds still in 2022

-     Inflation                        -- Expect costs to continue to rise.

-     Employment                  -- Expect increased pressure on retaining good staff.

-     Sport                             -- Novak will get a jab & become the tennis GOAT

-     Milk Payout                    -- Looking strong & will get to $9

It has been a tough year for many, don’t sweat the small stuff and take time this summer to look after yourself & your loved ones. We wish all our loyal Candy Gillespie clients a Merry Christmas and a Happy New Year