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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.

CG Update - March 2017

People News

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.

 

Donations 

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.

 

 

Interest Rates

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.

 

Kiwisaver

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.

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