What do I bring to my first meeting at Accounting North Limited?
The following would be useful to bring with you to your first meeting at Accounting North, together with any other relevant business and personal information.
- Contact details for yourself, partners and other relevant professionals (i.e. your lawyer and bank manager)
- IRD numbers
- Outline of what you are expecting from us
- Previous and current year financial information
- Details of Financial investments and Shareholdings
- Family Trust details, if applicable
- Business plans and Budgets, if applicable
What are your payment terms?
Payment terms depend on the nature of the assignment and will be agreed before commencing the assignment.
What if I can’t pay my invoice?
We need you to communicate with us early if you can’t pay our invoices within the agreed payment terms.
If you need to pay your fees off over an extended period of time, we will require you to use FeeSmart.
FeeSmart allows you to pay your fees off over 6 to 12 months by monthly direct debit payments. There is an interest charge to use this service and this is fully disclosed to you when you enter into the arrangement.
FeeSmart allows our clients to:
- Preserve their existing cash and credit lines for other business needs.
- Enjoy the benefits of smaller monthly payments rather than a large single lump sum.
- Remove the stress associated with being an overdue debtor with a key professional adviser.
What home office costs can I claim?
If you have an office at home, you will be able to claim a portion of your household costs.
These costs include:
- the interest costs on your mortgage (but not the principal repayments)
- house insurance (not personal insurance)
- repairs and maintenance
- telephone and Internet
- security/alarm system monitoring
The proportion claimed as a tax deduction should reflect the area of the house used for the home office. You can determine the apportionment based on the floor space area used for the office, divided by the total area of the house. For example, if the office is 16sm and the house is 160sm, then the percentage you would use is 10%. That means 10% of the total costs of the house can be used as an expense of the business.
What entertainment expenses can I claim?
Definitive answers on what you can and can’t claim are contained in IRD’s IR268 booklet on entertainment (www.ird.govt.nz – search on IR268)
Usually entertainment expenses (meals and drinks consumed off the office premises) are 50% deductible. If you bring food or drinks into your office e.g. because people are working late, then it is usually fully deductible
If you are travelling for work, your accommodation and associated costs e.g. meals, are fully deductible. However, if while travelling you pay for meals for work related guests, then the cost of the meal is only 50% deductible.
What are the 2013/2014 provisional tax dates?
Provisional tax is not a separate tax. It is simply paying your income tax as the income is received through the year. You pay installments based on the prior year tax return filed for the business. If the current year income of the business differs from the prior year results, you may need to file an estimate with the IRD if you need to reduce the level of tax you need to pay, or you can pay voluntary tax payments if you need to increase the level of tax to be paid. The amount of provisional tax you pay is then deducted from your final tax bill at the end of the year.
The number of times you need to pay provisional tax each year depends on the option you use to calculate your provisional tax, and how many times you pay GST (if registered).
If you have a 31 March balance date (ie your tax year ends on 31 March),your provisional tax due dates are:
If you’re registered for GST you pay your provisional tax and GST at the same time on a combined GST and provisional tax return.
If you have another balance date (ie your tax year ends before or after 31 March) check with us as to your due dates.
Can I claim motor vehicle expenses?
If you are a sole trader and you are using a vehicle that may be used for carrying passengers then you must keep a log book for 3 months to record the percentage of usage that is work related. You can then claim that percentage of the associated vehicle costs e.g. depreciation, petrol, registration, insurance, warrants of fitness, repairs, tyres etc. Your three month log book will last for 3 years but needs to be redone if your usage changes by more than 20%. Km
If you are operating through a company, then it depends who owns the vehicle. If you personally own the vehicle you can be reimbursed for the actual costs based on a logbook of private vs business use or you can be reimbursed for the business km’s travelled using IRD mileage rates.
If the company owns the vehicle you can claim 100% of vehicle costs. However, FBT may need to be paid.
Are IRD penalties tax deductible?
Is Use of Money Interest charged by the IRD tax deductible?
Use of Money Interest (UOMI) will be deductible if it is charged to a company or sole trader or partner in a partnership. If a shareholder employee or PAYE payer incurs it, then it is not tax deductible.
How do I calculate the GST component at 15%?
For GST at 15% the fraction is 3/23
For example : Lets assume the price of an item is $1,000 plus GST (or $1,150 including GST).
The GST component would be $1,150 x 3 / 23 = $150
Are donations made by a company tax deductible?
All qualifying donations (donations made to an approved charitable organisation) made by a company are deductible to the extent that the total value of the donation does not exceed the taxable income of the company in that income tax year.
Company profit (before donation) = $1,500
Donation = $1,000
Company profit (after donation) = $ 500
Therefore, the donation would be deductible as the donation is less than the company profit before the donation is deducted.