The UK’s tax collection department (HMRC) has been sending letters to tens of thousands of taxpayers, demanding they pay large outstanding tax obligations.
The letters have come as a surprise to many and have allegedly been linked to 10 suicides.
We had our Yorke Stone business planning session 24th April 2024 with Mark Jenkins from 2020 Business Dynamics who is also one of the founding members of The Gap. The Gap is a modern accounting firms business advisory portal. We have been a member of The Gap since 2020.
If you rent out the family bach through Bookabach or Airbnb or do some driving on Uber for extra income or more generally, if you earn income through online platforms that put together service providers with customers, there are more tax changes you need to know about.
After the introduction of the Trust Disclosure rules in March 2022, in November 2023 Inland Revenue released a high-level summary (in the form of a 40-
page report) of insights from the first year of reporting.
While tax advisors and clients alike may have begrudgingly completed the disclosures initially, the statistics may prove to be interesting.
The stated purpose of the trust disclosure rules was to provide insights into the way trusts are used, and to ensure compliance with the 39% individual tax rate. The information gathered included reporting on details of settlors, individuals with powers of appointment, beneficiaries, and various financial information.
The concept of what is a “dividend” is very broad and starts with the default proposition that any transfer of value from a company to a shareholder is a dividend.
That concept includes the simple scenario of an interest free loan to a shareholder or a person associated to a shareholder; which can also include loans between companies.
For 99.9% of the time, New Zealand companies are incorporated to operate a business and derive income. On establishment, the focus tends to be on items such as:
- whether a company is the appropriate vehicle, e.g. does limited liability protection warrant it;
- who should own the shares, e.g. in personal names or in a Trust; and
- who should be appointed director.
As increasing interest rates have bitten and with industry sectors such as retail and construction not performing as strongly, some businesses are struggling.
As the end of the financial year approaches, now is a good time to assess whether any of your accounts receivable need to be written off as ‘bad’. This is because, in order to claim a tax deduction, a bad debt needs to be physically written off as bad within the income year.
The Working for Families Tax Credit (WFFTC) is a notoriously complex scheme when it comes to determining eligibility and quantifying entitlement. This leads you to wonder how well the scheme is policed by Inland Revenue, and whether fraud is able to ‘fly under the radar’.
Accordingly, it was heartening to see a case brought before the Taxation Review Authority in October of last year regarding a taxpayer making false claims about their de facto relationship.
Sitting back at your desk after a month of busy family time or relaxing beach days, business owners and executive teams should start to think about not only
the year ahead, but the long-term viability of their businesses.
Here in New Zealand, we value simplicity and we call things as we see them. A spade’s a spade and a marshmallow is confectionary.
However, over in the UK, things are a bit more complicated. Value Added Tax (VAT) is charged on goods and services (like GST is in NZ) but is subject to a number of fiddly and somewhat subjective exemptions.
In today’s workplace environment, expectations around employee benefits are changing, with the norm shifting in the employee’s favour.
For many, the days of a 9-5 workday and mandatory workplace attendance are a distant memory, to the point where flexible hours and working environments are considered a bare minimum.
As the war for talent has evolved, so to have employee expectations and what employers are willing to provide to not only meet, but also exceed those expectations. It is also being acknowledged as not only a means to attract talent, but also as a way to increase productivity in the workplace.
As business owners, it's often easy to get caught up in the chaos of running your business and lose sight of our personal well-being, however, it's crucial to make time for ourselves and indulge in activities that bring balance to our lives.
As many of our business owners know, this time of year can bring unique challenges and stress. We’ve certainly seen many business owners struggling with wellbeing this year, and have felt the same at times ourselves.
As we approach the end of the year, it is crucial to assess your cash flow requirements for the upcoming four months and ensure you have the necessary financials and forecasts in place. To illustrate the importance of proactive financial planning, here's a case study from one of our clients.
Over the past six months we have been carefully nurturing and formalising a number of collaborations. An intentional step towards our business growth strategy alongside offering more value to our client experience as part of the Yorke Stone Whanau. These alliances we believe will help all of us strengthen our businesses.
A standard data policing check completed by Inland Revenue is to review taxpayer GST filing patterns to identify taxpayers that are GST registered, but
perhaps shouldn’t be.
In order to qualify for GST registration, a taxpayer needs to be conducting a “taxable activity”. This comprises a continuous or regular activity that involves making a supply of goods or services for consideration. This is a different test to whether a person is operating a “business” for income tax purposes, as it does not require an intention to make a profit.
Last year, the Green Party hit the headlines for suggesting banks, fuel companies, supermarkets, building products suppliers and energy generators/retailers should pay tax on super profits.
So, as we go into the election, we should give some thought as to whether some new innovative taxes are warranted.
The buoyant covid subsidy funded days are behind us, and New Zealand has entered a ‘technical’ recession. This was reinforced by the recent announcement that New Zealand’s corporate tax paid was almost 11% down in the 11 months to May relative to Government expectations.
"Yorke Stone assisted me in purchasing the building for my business, which was one of my three year goals, much sooner than I had expected"
"Through an organization called Wharariki, I met Nancy and Daniel when I was in search of an accountant who could help me achieve my goals and provide proactive, helpful, welcoming, and understanding services.
Read more here
Here we look at the recent legislation that has been passed around retention money and what this means for subcontractors.
Retention money relates to money owed to a subcontractor that is retained by a head contractor, which is usually a percentage of the contract value, to ensure work is completed as per the contract. Read the full article here.
The leaky homes crisis represents one of the most severe problems faced by New Zealand’s property sector and continues to cause stress and anxiety for those affected. Adding to the uncertainty for rental property owners has been the question of whether repair costs are immediately deductible as ’repairs and maintenance’ Read the full article here.
With the upcoming elections, this article on the Tax policies may be of interest.
Given that either Labour or National are likely to enter into coalition agreements of some form with the Green Party and Act, respectively, and the tax policies of the two main parties are more ‘vanilla’, it is worth reviewing the tax policies of the two minor parties as this is where unexpected change may come from.
One of the ways Yorke Stone helps business is working with the Pasifika Business Funding. If you or a business you know might be eligible contact us for a discussion. Here Crawford Joinery share their story of the effect this has had on their business.
Andrew and the team at Ultra IT have been on a massive trajectory in the past year, most recently purchasing Biz IT.
Andrew is an excellent example of someone who uses the core value of collaboration within his business. Here we share some feedback from Andrew on how Yorke Stone and The Alternative board have helped him on his business journey.
Inland Revenue recently issued a draft interpretation statement regarding bright-line and its application to certain family and close relationship
transactions.
Using a trust to manage and protect a family’s business and personal assets has been a common practice in New Zealand. However, with the recent increase in the amount of information required to be supplied to Inland Revenue, and now the Government’s decision, as part of its 2023 Budget, to increase the trust tax rate from 33% to 39% from 1 April 2024, many will be rethinking their position.
Inland Revenue made the headlines end of April 2023 with the release of its report on the amount of tax paid by our high-wealth individuals (HWIs).The findings were that HWIs’overall effective tax rate when taking into account all sources of income, including unrealised capital gains, is 8.9%.
Case Study
Yorke Stone are very humbled and proud to be in a position to assist Waitomo with helping the Tai Tokerau community through their mahi. This is a practical example of how we've used innovation to work with a client.
The tax treatment of residential rental investments has increasingly become a tangled web of complexity due to changes in legislation over the past few years.
In response to the adverse weather events that hit in January and February this year, a number of tax concessions were released on 14 March 2023 in an attempt to provide some relief to those who were impacted.
The call for action regarding climate change and mitigating man’s negative impact on the planet is not new. However, there has been a shift in the last few years. It has moved from being a focus of ‘greenies’ and the ‘young’ to being accepted by the mainstream population as something that can no longer be ignored
One of the fundamental director’s duties within the NZ Companies Act 1993 (‘the Act’) is to act in good faith and in what the director believes to be the best interest of the company. This has traditionally been interpreted to mean decisions should be aimed at maximising shareholder returns. In September 2021, an amendment was proposed to make it clear that directors of companies can consider a wide variety of factors.
Scammer alert
Nancy's invisible puppy is a story of how our lovely, kind-hearted Nancy got scammed, and a few tips to safe guard yourself from the same fate!
In New Zealand the provisional tax regime is designed to help taxpayers manage their income tax obligations, by requiring certain taxpayers to pay tax in instalments throughout the year, instead of one large lump sum at the end of the year. This regime applies to taxpayers who have residual income tax (RIT) of greater than $5,000 in a tax year – RIT is the amount of income tax payable by a taxpayer after deducting tax credits (e.g. RWT, PAYE).
A provisional taxpayer has four different options available when determining the amount to pay at each instalment:
The labour market is tight at the moment and seems to be getting tighter with each passing month. What this means, is that recruitment for staff is taking much longer, with a reduction in both the number and skills of applicants. Getting the right staff is imperative for your business growth.
This article aims to give some background on why this may be happening.
The Pacific Business Village initiative was launched in Tauranga by the Minister for Pacific Peoples, Aupito William Sio on 29 April 2022 and a large number of Pacific Networks, Providers and Businesses were in attendance.
With the rate of wage inflation being a hot topic at the moment for New Zealand businesses, we have done some forecasting as to what the the marginal tax thresholds may look like, and the potential financial impact it may have on you.
The 31st of March year end can be stressful for businesses. With this in mind, we share some top tips for making this time of the year a little easier.
The Inland Revenue are making it clear that its interpretation of donations to schools has changed.
Colm is one of the first Pacific Business owners we are mentoring through the Business Village funding from the Ministry of Pacific Peoples.
As Covid restrictions at home and abroad start to ease, a feeling of normality begins to surface; gone are the mandates, the scanning in and selected compulsory mask wearing. Life starts to feel good again, as if the last two years were just a fever dream.
The third round of the Kick Start program took place at The Hub in Whangarei on the 3rd of May 2022. Nancy and Steve delivered Yorke Stone’s component of the five-week program.
This is the 3rd trip Dan and Nancy have been on, to work on their business. Yes, they practice what they preach.
Yorke Stone is part of a group of 7 accounting firms from across New Zealand that meet every 3 months with their coach, to work on how we can serve our clients better.
The Institute of Chartered Accountants New Zealand put on an event 3rd of May to celebrate the academic and community achievement of accountants in Northland.
Two changes have recently surfaced in relation to trusts and the disclosure of trust information.
Introducing Tui Yardley our new Client Services Manager. Tui was born and raised in Kaipara then she moved to live, study and work in Whangarei from the age of 17yrs.
On 30 March 2022, the Taxation (Annual Rates for 2021-22, GST and Remedial Matters) Act 2022 received Royal assent. Its passing into law brings with it the extension of the residential bright line period from 5 to 10 years and denial of interest deductibility for residential investment properties.
Download our end of year checklist.
Kia Ora team, It has been a while since our last newsletter and like many of you we are navigating our way through the diff erent challenges of being in business during this time.
It is inevitable that at some stage a person will undertake a transaction where the applicable tax treatment is complex or unclear.
From initial fears of a prolonged economic slump due to Covid-19, the global economy has seen a resurgence led by unprecedented demand.
The summer break is a time for reflection on the year that has been. For business owners, this break is an opportunity to evaluate their future strategy and consider whether it is time to exit, or conversely, grow by purchasing someone else’s business. Whether buying or selling, it is a demanding exercise.
Over the last two years most of us have had to deal with working from home in some way, shape or form, and for those who are parents, added difficulties arose with trying to entertain and educate children whilst also fulfilling employment duties.
For those of you who prepare and file FBT returns on behalf of a GST- registered employer, you will be familiar with the GST on FBT adjustment that forms part of the FBT return.
The link below will take you to the government website that has the most current Active Government Response Package at a Glance:
https://treasury.govt.nz/information-and-services/newzealand-economy/covid-19-economic-response/package
In addition to the tax loss carryback scheme, the New Zealand Government has introduced a number of other tax changes to assist businesses and individuals to get through COVID-19. Currently, if an asset is purchased for less than $500 it does not need to be depreciated.
When you need the best electricians in Whangarei, Mr Electri City are the team to call.
Tracey & Jerrie bring a fresh new approach to electrical services around the Northland district, offering quality work you can rely on.
As New Zealand moves down the COVID-19 alert levels businesses face a long transition period from the unknown to the ‘new normal’.
Social distancing, strict health and safety guidelines, restricted international and regional travel are amongst numerous practises that will likely continue to apply for as long as COVID-19 remains a global threat.
Buying or selling a business is a significant decision, and commonly involves vendor and purchaser negotiations on many aspects of the transaction.
The Yorke Stone Team hasn’t stopped since Covid-19 hit and we are taking this time to stop, get our energy levels back up and rest.
We are back nice and fresh from the 6th of July 2020. Accountants: part time robots but mostly human. We thank everyone for understanding.
We all know how Covid-19 has impacted our economy and our businesses. Some businesses have experienced a growth, others a downturn and the struggle to keep staff employed and the business open is very real for others.
Engraving Systems in Whangarei has been operating since opening in 1985.
21 October: Quarterly FBT return and payment due
This is the first year we supported and attended the Bernina Fashion Show and what a great night it was. It was amazing
Termination is often a complicated and awkward area for any business owner, but is a situation that needs to be handled thoughtfully and compassionately.
Between ongoing expenses and bills, managing a healthy cash flow can be challenging, but understanding the differences between short and long-term financing can help refine an effective cash flow strategy.
Fringe Benefit Tax (FBT) on privately
used vehicles is neither new nor rare.
However, errors in FBT calculations
are common due to the murky and
complicated nature of the rules and
principles that apply.
Inland Revenue is making provisional tax simpler for New Zealand small businesses through the Accounting Income Method (AIM).
The Inland Revenue made an announcement in September that they will be moving away from cheques payments as they become increasingly digital.
In the next few weeks, you will be receiving an email or letter from us regarding ‘Audit Shield’.
We have started collecting and verifying Yorke Stone clients valid photo identification and proof of physical address documents.
We are pleased to introduce Richard Vigus, the newest member of the Yorke Stone family.
You may think New Zealand’s tax rules are difficult to follow. The following unusual, yet permitted deductions in the US may change your mind.
Changes to the provisional tax regime, effective from the 2018 tax year, have generally been well received by taxpayers.
It is common for disagreements to arise between taxpayers and Inland Revenue on the GST treatment of land transactions, but less common for these disputes to arise between a vendor and purchaser.
The Income Tax Act 2007 has long contained provisions to tax the sale of property (or other assets) acquired with the intention of disposal. However, ‘intention’ is a subjective concept and has been difficult for Inland Revenue to police.
Ratio analysis is a method of gaining insight into a company’s liquidity, efficiency and profitability by comparing the information contained in its financial statements.
Various tax concessions exist that can save significant time and money, but they are often overlooked.
This month we feature Aaron Maple - Director of Wash Rite Northland
You can view our June newsletter in it's entirety here
How does the GST Offshore Supplier Registration Bill affect your New Zealand business?
Making the most of your time at work can be difficult, with unproductivity being a commonly cited issue among many workers.
Broadly speaking, a payment from a company to a shareholder is likely to be a salary / wage or a dividend, and therefore taxable income.
With almost 237,000 small businesses started in Australia in 2018, succeeding in a new business venture can be as daunting as it is exciting.
Keeping your business in the family when you decide it’s time to retire is a common choice for many owners.
We spend a good chunk of our life at work. Surrounded by people who start off as strangers and overtime you become mates or create a level of friendship and then they become your family.
A niche marketing strategy is one that targets a specific subset of a market and is not a strategy that is ideal for every business.
The Tax Working Group (TWG) released its long awaited Final Report (‘the Report’) on 21 February 2019, following a 13 month review during which the Group received over 7,000 public submissions. The report contained 99 recommendations for the Government’s consideration; including the introduction of a broad Capital Gains Tax (‘CGT’).
The Employment Relations Amendments Act 2018 has introduced a number of changes that aim to improve conditions in the workplace and offer more protections to employees.
Download the GST Checklist here.