May 2013 E Newsletter

Welcome

Welcome to May! The weather has suddenly turned and many of you have been busy gathering your financial records for us. This month’s edition of Focus reiterates the need for the Annual Questionnaire as part of those financial records. We also talk about salary packaging, commercial leases and the free online tools available to assist small to medium sized businesses. Our client profile is for Hill Plumbing, who operate in the Eastern areas of Auckland – please give them a call if you would like a quote.

Accountant's Annual Questionnaire - why we need them please.

By now you would have received an email requesting you to log on and complete your annual questionnaire. Clients often ask why they have to complete it. The questionnaire serves the following purposes:

It is interactive and designed to cover all tax aspects. In completing this questionnaire we know all relevant tax matters have been covered allowing us to better consider tax planning, including ensuring all relevant deductible expenses are claimed.
The questions raise matters that you might have not considered important but may help us, for example in determing your tax status, possible tax savings and other issues.
Once completed the questionnaire provides you with a full list of information which we will require to attend to your tax and compliance matters. It means we can start your work knowing all the relevant information is at hand, creating efficiencies which in turn eases accounting costs and allows a quicker turnaround of your work.

Please contact your accountant if you have any questions.

Salary Packaging – Reducing Income from Employment by Replacing Part of Salary or Wage with Vouchers

New Zealand tax law requires every resident to return and pay tax on their worldwide income.

Inland Revenue is aware of arrangements being entered into by some employers where an employee selects an amount of salary or wage that is substituted for vouchers (for example, supermarket and petrol vouchers) which are very similar to the cash equivalent of the salary or wage. A “voucher” in this context may take many forms, but includes paper vouchers and electronic vouchers on stored value card. The amount of the vouchers will be equivalent to the salary substituted by the employee.

Changes to the tax treatment of commercial lease payments

If you’re considering entering or exiting a commercial lease arrangement in the coming months we advise you to contact us to discuss the potential tax implications arising from proposed changes effective 1 April 2013.
Lease inducement payments are a lump sum paid by a commercial landlord to a tenant providing incentive to enter a lease arrangement in times of high lease vacancy. Currently such payments are treated as deductible for the landlord and as capital or non-taxable receipts for the tenant.
The proposed changes will make lease inducement payments taxable income for the tenant with the income spread evenly over the lease term. Landlords will now also have to spread the deduction over the lease term.
Lease surrender payments are a lump sum paid by the tenant to a landlord to exit a long term lease. Generally lease surrender payments are treated as taxable to the landlord, but non-deductible to the tenant. In future these payments will be made tax deductible to the tenant.
Both proposed changes will only apply to leases entered on or after 1 April 2013. Effectively landlords and tenants will in future receive symmetrical tax treatment for receipts and payments.

Business.govt.nz - Free online tools to assist your business

This month we highlight the New Zealand government business website www.business.govt.nz. The information and tools on this site are designed specifically for small and medium-sized businesses, and the people who advise and support them. Business.govt.nz provides free access to a wide range of resources and links to information to help business owners and managers start, manage, grow or exit their businesses, and deal with the day-to-day challenges they face.

Information is available for the following areas:
• Entering and ceasing a business
• Staff and HR
• Tax and Reporting
• Laws and Regulations
• Support and advice

Under each topic, you will find information for a range of topics that will assist you in your business.

This website is definitely a must see and recommended for its easy to understand advice.

Should you require further assistance with any of the topics found on the Business.govt.nz website, please contact us here at Walker Wayland and we can assist you further.