Office Closed: Due to Covid-19 Alert Level 4 being enforced, our office closes at 5pm Wednesday 25 March until further notice. We will continue to work from home and will be available by telephone and email. As much as possible, it will be business as usual. We will continue to support you and your business, including GST processing, PAYE and Payroll processing, Annual Accounting, tax planning and cashflow forecasts. We will be in touch with further information on how we will deal with this new way of doing things.
People News: We are losing two valuable staff members. Briar Earl first joined Candy Gillespie in 2001. After a move to Hamilton, Briar returned to Candy Gillespie in 2014.
John Rea began working for Kim Hancock in 2007 and shifted with Kim to Candy Gillespie in 2013. John's retirement will no doubt be spent enjoying his many extra-curricular pursuits.
Corona Virus Government Package: Covid-19 is undoubtedly the biggest talking point of recent times. This virus has had a significant impact on people's lives, the global economy, and probably your business. If you need help creating a cashflow budget to make sure you can get through a downturn, please contact us.
· Income Subsidies: Businesses that can prove the Corona Virus has caused a 30% monthly decline in revenue are entitled to weekly wage subsidies of $585 per full time worker for 12 weeks. Self-employed workers are also entitled. We have already had clients apply for and receive this subsidy. If you think you are eligible, apply for these subsidies Google: WINZ Covid-19. We can help.
· Tax Changes: The most relevant parts of the government's tax plan relate to increasing the provisional tax threshold, the reinstatement of depreciation on commercial buildings, writing off interest on late tax payments for businesses affected by the virus and increasing the small asset depreciation threshold.
**Hint: If you're planning to buy a business asset under $5,000 this year, wait until after 1 April (or 1 June for most farmers). For the 2021 financial year only, assets under $5,000 can be claimed as an expense immediately rather than depreciating the cost over the life of the asset. So if you were planning to buy a new laptop or a farm bike, wait until the new financial year. After next year, this limit will reduce to $1000.
· Interest Rates: The Reserve bank recently lowered the OCR to 0.25% and pledged to keep it there for 12 months. Most banks followed suit with rate cuts.
Drought Declared: The government has officially declared a drought in a number of regions in New Zealand. As a result of this, there are minor tax relief provisions available for affected farmers. We don't think these provisions will be widely used by our farmer clients this year, but we will be in contact with you if this is something we think you can take advantage of.
End of Financial Year: 31 March sees the end of the financial year for most businesses. Those businesses will find a green questionnaire included with this newsletter. To accurately calculate your financial performance for the year, a snapshot of your position at balance date is required. When preparing your accounts we spend a considerable amount of time determining what you own and what you owe at balance date. This questionnaire is also your instruction to us to compile your accounts and tax returns. It is integral to our system to have it on file. Even if you think there is nothing to fill in, please sign and send it in.
As the financial year end approaches, here are some matters to think about:
Trading stock: either dispose of obsolescent stock or revalue it to the current market value. If you do devalue your stock, you need to be able to justify that value if the IRD challenges it.
Work in Progress: Review work in progress. Invoice it or write it off by balance date, otherwise you might be paying tax on income you won't receive.
Bad Debt: Bad debt deductions can only be claimed if the debt is actually written off before balance date. Make a decision on your aged debtors. Either call in the debt collectors or accept that it's not going to be paid and write it off.
Wages & Payroll: Minimum wage increases to $18.90 per hour from 1 April. Jo Storey is our resident payroll expert and is here to help. However, we request that if you are hiring new staff, please provide us with all their payroll information sooner rather than later to give us time to get it set up before your new staff begin. Please don't wait until you've started paying them before asking for a wage calculation.
Job layoffs caused by the Corona Virus, particularly in the tourism sector, may result in a number of people looking for work. This could be an opportunity for employers to find quality staff in a previously tight labour market.
Tax Payment Notices: As of 1 March, the IRD no longer accepts cheques for tax payments. You will notice a new format for the Tax Payment Notice that you receive. There is no longer a tear-off pay in slip. Instead you will find details to help you make the payment electronically.
When you pay your taxes electronically, please be sure to load the correct IRD number, period and tax type code for which that payment applies. Give us a call if you're unsure.
You can also make tax payments by eftpos (or cash) at Westpac branches.
ACC: Cover Plus Extra (CPX) is a good option for self-employed people. It gives you a level of ACC cover to meet your needs. If you're not already using CPX, call us to discuss your options. Those who already use CPX would have received notification regarding rolling over your cover for next year. If it's correct this rollover happens automatically. If not, complete the changes and send it back to them. ACC no longer accepts cheques. Internet banking or Direct Debits are the best way to pay. You can set up an interest free instalment plan over 6 months.
You may have received a letter from ACC stating that Candy Gillespie had been linked to your ACC account. We are in the process of checking ACC accounts to see whether our clients are entitled to an ACC refund. If it turns out you are eligible for a refund, we'll let you know.