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CG Update - December 2017

Newsletters, Candy Gillespie Ltd, Matamata Newsletter December 2007

Office News

Our office will close on Friday December 22nd and reopen on Monday January 8th. For urgent enquiries, we will be checking emails and the office answer phone on a regular basis so please leave a message.

From a staff perspective there were few changes to the team. Karyn Walters and Anna Davey have returned after maternity leave. Ben Blackett now has Nate to keep him awake and Michael Candy, true to his 2016 prediction is to become a dad in January.

The CGGC (Candy Gillespie Grandparent Club) is looking forward to welcoming Alan Candy as the 8th member.

 

Office Essentials

 

-       Wages

Reminders for the Christmas period

·         Employees may request to cash up one week of annual leave per year after the entitlement has arisen. The net payment will not be the same as a normal week, the PAYE will need to be calculated at lump sum rates and house rental (if any) is not deducted.

·         If you're employing relief staff over the Christmas period make sure they fill out an IR330 and if we process your PAYE, please let us know about any staffing changes.

·         Timesheets – we are now getting used to this as being good practice. For those who have employees with a work visa, timesheets are now often requested by Immigration NZ to ensure compliance.

-       ACC

While you are checking your ACC bill, make sure that you are on the correct industry classification. If you are on the wrong classification, you could be paying too much. If ACC don't know what industry you are in, they default to industries with high levy rates. Making sure this is correct could save you money. If you are unsure, we can review this for you.

-       IRD due dates and payments

If you are paying IRD by cheque, allow plenty of time for delivery (say 5 days) before due date to avoid additional interest and penalties. Internet banking is the safest and best option and we encourage clients to use this method of meeting IRD obligations.

 

-       Brightline Test

If you are selling residential property you have owned for a short period then be careful that the transaction does not become subject to the potential of any profit becoming taxable through a breach of the Brightline Test. You should note:

 

  • The 2 years starts from the date the solicitor lodged the title – not the date that settlement occurred.  This could add up to 2 weeks onto the time frame.
  • When looking at selling, the contract (Sale and Purchase agreement) cannot be dated before the 2 years is up.  It does not depend on the settlement but when the initial negotiations occurred.
  • The family home is exempt from these rules.

 

Dairy Farmer Clients

In 2017 May balance date clients received around $5.52 per kg/ms with a variance due to the previous year's production and capacity adjustments. In 2018, on current estimate the payout, subject to the same variables, will be $6.42 which is a +16% increase.

 

Minimum Wage

The minimum wage will increase to $16.50 per hour from 1 April 2018.

 

New Government and 2018

By now you should be aware that there is a new government in place and 2018 is almost upon us. In no particular order, here are a few of the government initiatives that will face us in the coming years.

 

  • Family Assistance Package - significant changes to the family assistance package starting July 2018 plus cash payments for new parents.
  • Tax Working Group - an investigation into the fairness of the tax system. There is a generous time frame for reporting back and a commitment to public consultation so we expect no significant changes to the tax system for three to four years. The two standout issues are the question of capital gains and the taxing of NZ made profits by offshore companies.
  • Gold Card Clients – the introduction of a Winter Energy Payment of $450 single and $700 per couple for those on main benefits (including NZ Super).
  • The Brightline Test will be extended from two to five years and tax rental losses ring fenced against future profits.
  • The repeal of the tax cuts announced by the previous government which were to take effect on 1 April 2018.
  • Increase Paid Maternity Leave from 1 July 2018.
  • Free fees for first year of post-secondary education from 1 January 2018.
  • Increase in Student Allowances by $50 per week.
  • Minimum standards for warm and dry rental homes. The Healthy Homes Guarantee Act 2017 has been passed by parliament.
  • Will introduce a ban on overseas property speculators from buying existing houses.
  • Will tighten the criteria for overseas investors in rural land.
  • Will stop Housing NZ selling state houses and will establish the Kiwibuild program.
  • Will resume contributions to the NZ Superannuation Fund.
  • An Independent Climate Commission will be setup. A process will be established for setting net zero carbon emission goals.

 

Skill Shortage

Because of our buoyant economy and relatively low unemployment rate, nearly every business type suffers from a skill shortage. Every employer should have a plan that answers these questions.

-       How do I train my staff better and faster?

-       How do I retain better staff longer?

 

Trusts

As client's individual circumstances change, so does the need or desire to protect assets through Trust ownership. New rules are being introduced around trust compliance. We will advise of the implications of these as they become law.

 

We wish all our loyal clients a Merry Christmas and a Happy New Year.

CG Update - June 2017

Newsletters, Candy Gillespie Ltd, Matamata
End of Financial Year

 

Enclosed is your annual questionnaire for your 30 June 2017 balance date. Here are a few tips to help you accurately record your livestock numbers.

 

·         It is a lot easier if it's done on or near to balance date.

·         Don't separate Jerseys, Friesians, or any other breed. Dairy cows are dairy cows.

·         Don't include heifers coming into the herd in the cow numbers, these are R2 heifers.

·         Don't forget to add in carry over cows and stock out grazing or leased that you own.

·         Calves born after last year's balance date and before this year's balance date are categorised as rising 1 even if they were born on the last day of the financial year. There can be confusion for winter milk herds calving from February.

 

All of the above is to encourage you to fill in the green questionnaire form. When you have assembled all the information, sign it and send it in to the office.

 

IRD Livestock Values

The IRD have recently released their Herd Scheme values for the 2017 year.

 

Dairy

 

2017

 

2016

 

2015

 

R1 heifers

 

819

 

530

 

681

 

R2 heifers

 

1,421

 

1,077

 

1,324

 

MA cows

 

1,649

 

1,356

 

1,655

 

R1 steers & bulls

 

713

 

615

 

501

 

R2 steers & bulls

 

1091

 

1,003

 

900

 

Breeding Bulls

 

1,887

 

1,607

 

1,641

 

 

 

 

 

 

 

 

 

Beef

 

2017

 

2016

 

2015

 

R1 heifers

 

824

 

726

 

607

 

R2 heifers

 

1,171

 

1,079

 

940

 

MA cows

 

1,431

 

1,273

 

1,171

 

R1 steers & bulls

 

986

 

842

 

706

 

R2 steers & bulls

 

1,325

 

1,229

 

1,104

 

Breeding Bulls

 

3,095

 

2,571

 

2,293

 

 

 

 

 

 

 

 

 

Sheep

 

2017

 

2016

 

2015

 

Ewe hoggets

 

109

 

92

 

88

 

Ram and wether hoggets

 

103

 

84

 

83

 

Two-tooth ewes

 

150

 

133

 

126

 

3 / 4 yr ewes

 

131

 

117

 

113

 

5 yr plus ewes

 

110

 

96

 

90

 

Breeding Rams

 

349

 

304

 

253

 

 

These values are inline with what we predicted and it has proved to be valuable for those of you who have jumped onto the herd scheme in the 2016 year.

 

 

Wages & Payroll

Be aware of an increase of 50 cents to $15.75 per hour in the adult minimum wage rate applying from April 1st. Other "starting out" and "training rates" have also changed.

 

If you are paying Contractors or receiving income as one, then new rules exist to allow taxpayers to nominate their own rate of Withholding Tax (minimum 10%). Check with us if you need further information.

 

There are a few "golden rules" in calculating wage payments for those who work in your business.

·         You should not pay anyone without an IRD number. Without it the non declaration rate of 46.39% must apply. New employees must sign an IR330.

·         All employees should have an employment agreement, including casual employees.

·         Everyone is entitled to an 8% holiday pay component of their pay and that must be shown separately for casual staff if it is to be included in the period's pay. This must also be agreed on in the employment agreement.

·         Each pay period must meet the minimum wage rate requirement with respect to hours worked.

·         If you provide any taxable allowance (free board or house) then its value must be included in your wage/PAYE tax calculation. Market value of rents should apply.

·         Self employed contractors receiving schedular payments must produce a Withholding Tax exemption certificate, otherwise tax must be deducted.

 

Payroll is a sensitive issue and good communication with employees on wage issues is essential. There is a bigger picture to consider. Many staff have non job related issues that are affected by their gross wage such as Child Support and Family Assistance.

 

Latasha Tappin and Alicia Collins are currently looking after our PAYE and payroll calculations. Give them a call on any payroll issues.

 

Tax changes from 1 April 2017

Farm house apportionments – where the value of a farm house and curtilage is up to 20% of the total property value, you can claim 20% of house power, insurance and repairs. This was previously 25%. For lifestyle blocks were the value of the house and curtilage is greater than 20% of the property value, all costs must be apportioned based on actual business use, i.e. the office area must be determined and then that percentage of the house costs claimed.

 

Farmer Outlook

As the current season winds down, if you have not already done so, it is time to think about a budget and cash flow forecast for the coming year. A few points to remember:

-      Incomes were down in 2016 and many have experienced a tax holiday over this last year. It is probable that 2017 taxable incomes will be up on the previous year and you may need to budget for Terminal Tax in April 2018.

-      As your dairy payout prediction is likely to exceed the Fonterra loan repayment trigger point ($6) then factor in repayments of the 2016 dairy support loan.

-      The Fonterra Payout for 2016/17 has been revised to $6.15. The Forecast for 2017/18 $6.50. What is your breakeven payout?

-      What is your position with regards to your environment, effluent and water in the future?

-      Strengthen your balance sheet so you can grow or handle any drop in payout going forward.

-      Don't revert back to a she'll be right attitude with regards to expenditure, don't lose the lesson or some of the efficiencies you have now gained.

 

CG Update - May 2017

Newsletters, Candy Gillespie Ltd, Matamata Newsletter March 2010

End of Financial Year

 

Enclosed is your annual questionnaire for your 31 May 2017 balance date. Here are a few tips to help you accurately record your livestock numbers.

 

·         It is a lot easier if it's done on or near to balance date.

·         Don't separate Jerseys, Friesians, or any other breed. Dairy cows are dairy cows.

·         Don't include heifers coming into the herd in the cow numbers, these are R2 heifers.

·         Don't forget to add in carry over cows and stock out grazing or leased that you own.

·         Calves born after last year's balance date and before this year's balance date are categorised as rising 1 even if they were born on the last day of the financial year. There can be confusion for winter milk herds calving from February.

 

All of the above is to encourage you to fill in the green questionnaire form. When you have assembled all the information, sign it and send it in to the office.

 

IRD Livestock Values

The IRD have recently released their Herd Scheme values for the 2017 year.

 

Dairy

 

2017

 

2016

 

2015

 

R1 heifers

 

819

 

530

 

681

 

R2 heifers

 

1,421

 

1,077

 

1,324

 

MA cows

 

1,649

 

1,356

 

1,655

 

R1 steers & bulls

 

713

 

615

 

501

 

R2 steers & bulls

 

1091

 

1,003

 

900

 

Breeding Bulls

 

1,887

 

1,607

 

1,641

 

 

 

 

 

 

 

 

 

Beef

 

2017

 

2016

 

2015

 

R1 heifers

 

824

 

726

 

607

 

R2 heifers

 

1,171

 

1,079

 

940

 

MA cows

 

1,431

 

1,273

 

1,171

 

R1 steers & bulls

 

986

 

842

 

706

 

R2 steers & bulls

 

1,325

 

1,229

 

1,104

 

Breeding Bulls

 

3,095

 

2,571

 

2,293

 

 

 

 

 

 

 

 

 

Sheep

 

2017

 

2016

 

2015

 

Ewe hoggets

 

109

 

92

 

88

 

Ram and wether hoggets

 

103

 

84

 

83

 

Two-tooth ewes

 

150

 

133

 

126

 

3 / 4 yr ewes

 

131

 

117

 

113

 

5 yr plus ewes

 

110

 

96

 

90

 

Breeding Rams

 

349

 

304

 

253

 

 

These values are inline with what we predicted and it has proved to be valuable for those of you who have jumped onto the herd scheme in the 2016 year.

 

 

Wages & Payroll

Be aware of an increase of 50 cents to $15.75 per hour in the adult minimum wage rate applying from April 1st. Other "starting out" and "training rates" have also changed.

 

If you are paying Contractors or receiving income as one, then new rules exist to allow taxpayers to nominate their own rate of Withholding Tax (minimum 10%). Check with us if you need further information.

 

There are a few "golden rules" in calculating wage payments for those who work in your business.

·         You should not pay anyone without an IRD number. Without it the non declaration rate of 46.39% must apply. New employees must sign an IR330.

·         All employees should have an employment agreement, including casual employees.

·         Everyone is entitled to an 8% holiday pay component of their pay and that must be shown separately for casual staff if it is to be included in the period's pay. This must also be agreed on in the employment agreement.

·         Each pay period must meet the minimum wage rate requirement with respect to hours worked.

·         If you provide any taxable allowance (free board or house) then its value must be included in your wage/PAYE tax calculation. Market value of rents should apply.

·         Self employed contractors receiving schedular payments must produce a Withholding Tax exemption certificate, otherwise tax must be deducted.

 

Payroll is a sensitive issue and good communication with employees on wage issues is essential. There is a bigger picture to consider. Many staff have non job related issues that are affected by their gross wage such as Child Support and Family Assistance.

 

Latasha Tappin and Alicia Collins are currently looking after our PAYE and payroll calculations. Give them a call on any payroll issues.

 

Tax changes from 1 April 2017

Farm house apportionments – where the value of a farm house and curtilage is up to 20% of the total property value, you can claim 20% of house power, insurance and repairs. This was previously 25%. For lifestyle blocks were the value of the house and curtilage is greater than 20% of the property value, all costs must be apportioned based on actual business use, i.e. the office area must be determined and then that percentage of the house costs claimed.

 

Farmer Outlook

As the current season winds down, if you have not already done so, it is time to think about a budget and cash flow forecast for the coming year. A few points to remember:

-      Incomes were down in 2016 and many have experienced a tax holiday over this last year. It is probable that 2017 taxable incomes will be up on the previous year and you may need to budget for Terminal Tax in April 2018.

-      As your dairy payout prediction is likely to exceed the Fonterra loan repayment trigger point ($6) then factor in repayments of the 2016 dairy support loan.

-      The Fonterra Payout for 2016/17 has been revised to $6.15. The Forecast for 2017/18 $6.50. What is your breakeven payout?

-      What is your position with regards to your environment, effluent and water in the future?

-      Strengthen your balance sheet so you can grow or handle any drop in payout going forward.

-      Don't revert back to a she'll be right attitude with regards to expenditure, don't lose the lesson or some of the efficiencies you have now gained.

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