At March 31st we say farewell and thanks to Kim Hancock. We look forward to continuing to provide accounting services for his clients who are now in the capable hands of our Directors and senior associates.
Congratulations to clients Phillip Van Heuven, Adrianus Van T Klooster, and Carlos & Bernice Delos Santos who have all won Farmer awards in recent competitions.
End of Financial Year
Over the next few months most clients will reach their annual financial balance date. This is an important day in your business life and you should take a moment to recognise its significance in determining your financial results for the year.
If we are to accurately calculate your financial performance for the year, then a snapshot of your position on balance date is a vital component of the data required. When preparing your accounts we spend a considerable amount of time and effort in determining what you own and what you owe on balance date.
End of year livestock and trading stock are vital pieces of information.
Bad Debts – Bad debts are deductible only in the year that they are written off. Bad debts must be written off before balance date.
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.
We Kiwis are extremely generous when it comes to giving help to others in terms of time, energy, expertise and with cold hard cash. The Government recognises that contribution by providing a 33% rebate on cash contributions to registered charities in the education, religious and philanthropic fields.
Send donation receipts in with annual records for us to process your rebate claim.
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.
Employers need to ensure that the rate of pay for salaried employees does not fall below the minimum rate on a weekly basis for the hours worked
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.
Competition in the banking industry remains strong and therefore interest rates have not moved to any great extent. Markets do react to world events but, in the absence of such an occurrence, we see the current situation continuing.
The OCR remains steady at 1.75% with indications from the Reserve Bank that no change is foreseen in the short term.
Budget for the next farming season.
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, many have experienced a tax holiday over this last year. It is probable that 2017 taxable incomes will be up on the previous year. You need to budget for terminal tax April 2018.
- As your dairy payout prediction is likely to exceed the Fonterra loan repayment trigger point then factor in repayments of the 2016 dairy support loan.
We can help you with producing the budget but you need to give serious thought to the big budget items; employment, feed, fertiliser, any one off item of a repair or capital nature and, most importantly, your personal living requirements.
Mixed Use Assets
If you have a mixed use business asset then you need to provide us with usage details. Using the beach house as a classic example, in order to calculate the correct percentage of claimable expenses, we need to know:
1. The number of days rented on a commercial basis.
2. The number of days used by family members plus days rented to others at less than 80% of market.
Could you please note those details on your questionnaire. If your rental income is less than $4k per annum then you may be able to opt out of returning any income in your returns. Of course that means there is no loss to claim either.
Review your will, memorandum of wishes and other important documents.
A long standing client died recently and despite periodic reminders from the accountant the current will was dated in the 1980's. One of the nominated executors was also deceased making the issue of probate somewhat delayed.
In another recent instance, a review of the constitution of an incorporated society revealed that in the event of the society winding up, the charity or organisation that is the nominated beneficiary of any residual assets or surplus funds technically no longer exists.
Another timely but gentle reminder that circumstances and thinking change over time and the need to keep your important legal documents current.
Still a great idea for all of us not of the retirement age. If your Kiwisaver account is lying dormant in terms of annual contributions then you should make a voluntary payment of $1,040 before June 30th to entitle the account to receive the $520 government tax credit.