Issue 39 April 2023 Archives - BDS Chartered Accountants

In the past, the New Zealand Customs Service has allowed businesses to combine the value of small shipments containing a number of low-value items, such as spare parts, when the value for duty of any item listed on an invoice did not exceed the equivalent of NZ$25.

Historically, Customs allowed the items to be combined with the value calculated for parts of the parent appliance or machine, and be subject to the same duty rate.

Customs has decided to do away with this practice. Going forward, the items in question must be entered on their own lines of an entry.

If you’re tired of chasing invoices and late payments, eInvoicing could make your life easier and save you money.

With eInvoicing, digital systems talk to one another seamlessly over a universal network, ensuring payment information is exchanged more quickly and accurately.

Businesses no longer need to generate paper-based invoices or email PDFs, and buyers won’t need to manually input details into their systems.

According to the Ministry of Business, Innovation and Employment, it costs Kiwi businesses about $26 to process a paper invoice and $23 for an email invoice, due to the amount of time spent processing, chasing, and re-sending bills. In contrast, it takes under $10 to process an eInvoice.

eInvoices are more secure, running through a safe network rather than over our email servers. There’s no risk of lost or misdirected emails or letters.

The Government is pushing for all small companies to adopt eInvoicing. All New Zealand central government agencies are now capable of receiving, sending, and paying eInvoices, and have committed to paying eInvoices of up to $1 million within 10 days.

eInvoicing brings significant savings through reduced processing costs. It eradicates administrative delays and issues, improves trading relationships, and reduces the potential for fraud. More importantly, it saves you time to focus on your business.

More than 7,300 Kiwi businesses are signed up for eInvoicing. So how do you get started?

It’s pretty easy. You can enable eInvoicing through your accounting software. Simply log in and register to send and receive eInvoices through your chosen software provider and follow the steps to get set up.

eInvoicing is usually free on most accounting software plans. You’ll need to provide a few details, including your New Zealand Business Number, and the whole process only takes a few clicks.

As long as your customer or supplier has software that connects to the eInvoicing network (called Peppol), their systems will be able to receive or send eInvoices with you seamlessly.

In an uncertain economic environment, improving cash flow and getting paid more quickly is vital. Have a chat with us about how to get started with eInvoicing, and learn how it can help your business.

Since the last of New Zealand’s lockdowns, many businesses have ditched remote working for good. But what are the benefits of taking a ‘remote-first’ approach?

Around the world, an increasing number of companies are making remote working the default option for staff, abandoning the office completely in favour of a more flexible model.

With a ‘remote-first’ approach, employees can work when and where it is most convenient for them. Each member of your team can perform their duties remotely, and the needs of remote workers are prioritised.

In a remote-first workplace:

All employees can work 100% remotely if they want to
There’s a small office or hub available for those in similar locations to socialise and collaborate
The needs of remote employees come first
All meetings are online

The benefits of going remote-first:

A broader talent pool: There are no restrictions on where your staff members can be based when you adopt a remote-first strategy.

You could hire the best talent from across New Zealand or overseas. If staff are working from overseas, please do talk to us to manage both overseas and New Zealand tax considerations.

With the net cast wider, your talent pool could increase tenfold, giving you the edge as you look for the best staff.
Happier staff: Remote working can improve your team’s work/life balance. Placing more trust in your employees can lead to improved performance.

Digital tools can help your business become more efficient, save time, and win new customers, but there are also dangers to watch out for. Cyber-attacks and con artists could target any small business in New Zealand. Here are the latest risks:

Facebook danger

One sophisticated Facebook scam has ensnared 10 million users. Millions of people on the social network have been conned into handing over their account credentials.

The phishing scam, which is still active, pushes victims to a fake Facebook login page, where they are enticed to input their details. The scam began in September 2021 and remains active.

Worried about phishing on social media? Here’s Facebook’s advice on how to protect yourself from harm:

Don’t trust messages that:

Demand money
Offer gifts
Threaten to delete or ban your Facebook account

Emails about your account always come from:

fb.com
facebook.com
facebookmail.com

Don’t click suspicious links:

If you get a suspicious email or message claiming to be from Facebook, then don’t click any links or attachments.
Don’t respond to these emails

Don’t answer messages that ask for your:

Password
Account numbers or important personal identifying information
Credit card information

Email phishing

Cybercriminals used Covid-19 to create new scams, and more recently, the monkeypox virus was used to target unsuspecting victims.

Criminals have been creating bogus resources for businesses to ‘learn more’ about safety precautions. The perpetrators send businesses a link to a bogus domain and a compromised website.

The Ministry of Business, Innovation & Employment has announced that businesses performing eligible research & development can access faster and more frequent payments of the R&D tax incentive this year.

What is the R&D tax incentive?

The scheme provides a 15% tax credit to businesses conducting ‘eligible’ R&D activities and has supported more than $1 billion in research costs since its inception in 2019. A new feature has been introduced into the scheme whereby rather than receiving the credit after your income tax return has been filed and your application has been finalised by Inland Revenue, regular cash payments can be received starting in the same year as you conduct your R&D.

Businesses are eligible for the new in-year payments if they have submitted applications and their anticipated tax credit isn’t offset by provisional tax payments.
Once applications are approved, businesses will receive payments during the tax year in which they made R&D investments.
In-year payments will be paid as an interest-free loan, repayable when the R&D tax credit is available.
Tax Management New Zealand will deliver the in-year payments scheme, and more details on the programme can be found on MBIE’s website.

From April 1, 2023, payment service providers (i.e. EFTPOS providers and online payment platforms) must provide information to Inland Revenue every six months on all transactions processed. Inland Revenue will compare this information with what businesses have filed in their tax returns. They will follow up on any discrepancies in these comparisons.