Why write a business plan? Writing the plan helps you think about what you are doing: The plan sets out your strategy and action plan over the next one to three years, or sometimes longer. As part of the process you set concrete objectives and plan how you will achieve them. Writing the plan helps…
Day: January 14, 2020
What can I claim?
The Inland Revenue Department collects tax in accordance with several Acts including:- Income Tax Act GST Act It also collects and distributes Child Support. Sometimes you can “make a claim”, which is acceptable for one Act but not for another. e.g. The GST incurred in setting up a company can be claimed, but the cost…
Your Annual Accounts
The notes below have been prepared to assist you to minimise the cost of our work. Due to the complex nature of tax law and the penalties for mistakes, this firm will only accept responsibility for tax advice supplied by its principals. Business questionnaire Please ensure this is completed and signed. If you have…
Trusts
What is a trust? Many centuries ago an adventurer was travelling to a distant land. He said to a friend, “Here is my money, use it to look after my family while I am away”. The adventurer (Settlor) had created a family trust. The friend had become a trustee. The family were the beneficiaries. When…
The numbers don't lie
At a recent presentation the speaker commented that “the numbers don’t lie!” That statement certainly got my attention. But is it true? While numbers themselves may not lie, they can certainly mislead – intentionally or unintentionally. A businessman once introduced himself by stating that in his previous business he had increased annual revenue by 250%…
Annual Stock Valuation - Small Businesses
Definitions A “small business” for tax purposes is one (combined with its associated persons) which has a turnover of less than $3 million per year. Associated person rules apply. This means, for example, a person having an interest in two companies must add the turnovers to see whether the total is still less than $3million.…
Annual Stock Valuation - Big Businesses
References Figures in brackets refer to the section in the Income Tax Act. Definitions: A “big business” for tax purposes is one or an associated group with a turnover of more than $3 million per year. Associated person rules apply. This means, for example, a person having an interest in two companies must add…
Residential Rental Property
Before you start Structures There are four options. Sole ownership Partnership Company Trust The following options apply to married or de facto couples: Sole Ownership It could be desirable for the partner who has the higher income to own the property if the project is expected to make losses. In this way, the advantage…
PAYE
These notes assume you have only a few employees. When PAYE deductions exceed $100,000 per year ($500,000 from 1 April 2009) the rules change. Who is an employee? If someone comes to you and says they are self employed, even if they are registered for GST, you must still check to see if you…
Home Office
Where a business is operated from home there is the ability to claim as a tax deduction the expenses which relate to the proportion of the home used for business purposes. For example, if a bedroom is set aside as an office for your 4Life business and the area of this room is 10% of…
A brief guide to GST
GST returns are a fertile area for mistakes. To flesh out your knowledge, refer to IRD publication IR 375. When the term “goods” is used in this information sheet, read “Goods and/or services”. GST Speak It is important to get used to the terminology. Mistakes arise from misunderstandings when people use their own words.…
Things to consider when buying a business
Income How much is the total income to owners, including any company profit? Ask for five years’ accounts Have these accounts been prepared by a qualified accountant? If not, how do you know how the figures have been put together? If not supplied, insist on having the balance sheets. They provide a wealth of information…
Asking your bank for a loan
If you require finance for your business look at the problem from the bank manager’s point of view. If you were in his/her shoes you would want the following. The borrower Information about the borrower including management skills and experience in the industry. This is no time for modesty. You are trying to persuade…
Entertainment Expenses
To help determine whether expenditure is 50% deductible or 100% deductible, look for a reasonable amount of personal benefit from the entertainment. If this exists, it is likely the expense will fall into the 50% group. Entertainment is not deductible at all unless it is incurred for business purposes. Keeping the evidence IRD expects…
Advertising
Writing the advertisement Advertising is only one of many ways to market your business. It is probably the most expensive and often the least effective. You do not need to advertise to make your business grow. The Body Shop is said to have never advertised. Advertising ranges from the newspaper, magazines, television and radio to…