Unable to pay GST? Take action NOW

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The 28th of this month is the GST Due Date for the GST Period 1st June 2015 to the 31st July 2015. If you are unable to pay the GST due then please note that:

  •     An initial 1% late payment penalty will be charged on the day after the due date.
  •     A further 4% penalty will be charged if there is still an amount of unpaid tax (including penalties) at the end of the 7th day from the due date.
  •     Every month the amount owing remains unpaid, a further 1% incremental penalty will be added.
  •     As well as the penalties above you will be charged interest on tax that remains unpaid until it is eventually paid.

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GST due 28th of this month

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Friday 28th August 2015, for many entities (read our post about what an entity is) is the GST Due Date for the GST Period 1st June 2015 to the 31st July 2015. If you are unable to pay the GST due then please note that: –

  • An initial 1% late payment penalty will been charged on the day after the due date.
  • A further 4% penalty will be charged if there is still an amount of unpaid tax (including penalties) at the end of the 7th day from the due date.
  • Every month the amount owing remains unpaid, a further 1% incremental penalty will be added.
  • As well as the penalties above you will be charged interest on tax that remains unpaid until it is eventually paid.

There has been talk recently on how the penalties mount up increasing the debt far beyond the original GST amount owing. Read More »

Unable to pay your provisional tax? Take action NOW

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For taxpayers who are required to pay provisional tax, Thursday, 7th May 2015, for many entities (read our post about what an entity is) is the date the 3rd Instalment of Provisional Tax for the Income Tax year 1st April 2014 to the 31st March 2015 is due. If you are unable to make this payment please be aware that in some circumstances you may be charged interest especially if the provisional tax you paid is less than your Residual Income Tax (RIT).

There has been talk recently on how the penalties mount up increasing the debt far beyond the original Provisional Tax amount owing. Read More »

Did your Business start in this Financial Year? Will you have to pay the IRD Use of Money Interest?

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As a new Non-Individual (Company or Trust) business you could have to pay Use of Money Interest to IRD?

A new business (Company or Trust) is one of the categories of taxpayers that may be liable for interest even if they have no provisional tax liability in their first year of operation.

You may have to pay Use of Money Interest (UOMI), if the Residual Income Tax (RIT) is greater than $2,500. Note: RIT is the amount of tax you have to pay, less any tax credits you may be entitled to (excluding working for families’ tax credits or other tax payments made during the year) and any PAYE deducted.

In the first year of operation of a business there is normally no Provisional Tax Due. This is because Provisional Tax is based on the RIT (tax to pay) on the last income tax return when it is more than $2,500. Therefore because this is the first year of operation the tax liability is often overlooked and a Company or Trust ends up with UOMI to pay. Read More »

Xero End of the Year Tips

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As the calendar page has turned to show us it is March – which, by the way, happens every year – we see and feel the anxiety levels start to kick-in for business owners and their bookkeeping, accounting and tax professionals.  (Yes, even bookkeeping, accounting and tax professionals get anxiety).  Wouldn’t it be great to change this annual occurrence of anxiety with just a few simple steps? Your anxiety can be eliminated, if you choose now to implement these tips.

How different would your business be IF…. Your record keeping is current and ready to hand over to your bookkeeping, accounting or tax professional sooner rather than later. At this time of the year, when businesses are pulling their year-end info together for their annual accounts and tax preparation we offer the following Tips. Read More »

FAQ: How does a company Repay a Shareholders Advance?

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Question: From my understanding, considering the company was initially funded by owner funds of $50K put into the company, it should be possible to take owner funds out from revenue earned up to this amount. Is this correct?

Shareholder Current Account

How Funds are Credited

It is common when a company begins operation for the shareholder(s): –

  • To pay up the share capital, for the purpose of this exercise we’ll say it is $120 being for 120 Fully Paid-up $1.00 Shares, and
  • To also advance needed capital so that the company can start operating and for the purpose of this exercise we’ll say it is $50,000. This is commonly referred to as Working Capital.

Let’s look at how this is recorded in the company accounting system. It is essential that the $50,120 be deposited into the company’s bank account. The $120 is coded to the Paid up Share Capital Account and the $50,000 is coded to the Shareholder Current Account, which essentially records any loans either to or from the company. Read More »

Understanding the “Debt Cycle”

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  Debt

The “Debt Cycle”

Ever been here I have. There was a time when I was in debt where I owed quite a bit of money to people and the bank. It was so bad that even my Credit Cards were maxed out. There were times when I would see someone I owed money to and I would cross to the other side of the street just so I would not have to stop and talk to them. I was financially, physically, emotionally and spiritually not in a good place.

I am going to share with you, what I believe is, valuable knowledge regarding the “Debt Cycle”. It was given to me during my darkest hour and was to be a major turning point in the way I looked at debt. Read More »

Understanding the Debt Cycle and Business Debt

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The Debt Cycle

If you are in business it is important that you understand the Debt Cycle and how it relates to your customers / clients (your Debtors), you and the people you owe money to (your Creditors). I would go as far as to say that not understanding the “Debt Cycle” is the primary reason I am seeing an increase in the length of time it is taking for businesses to pay their creditors.

Business Debt

As a business we extend debt to our customers and our terms are that “Payment is due in 7 days of receipt of the invoice”. As the business owner, unless the client has a query regarding the invoice, I expect our clients to honour that and on the main this happens.

However having said that if I don’t follow up on an overdue account then the seven (7) days does not mean a thing and can actually lead to the client paying their account later and later. So on the odd occasion that this happens I need to “nip it in the bud” so to speak.

Conversely, I expect our clients, not to ignore their debt to us and to come to me if they are unable to for one reason or another to pay by due date. Believe you me there is a lot of expense involved in chasing bad debts. Read More »

How does KiwiSaver work for self-employed

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Self-employed and KiwiSaverindex

You don’t have to be an employee to be part of KiwiSaver, but the rules are a bit different.

If you will not receive PAYE income as a contractor – for example, if you are going to invoice for your contract work – your employment status will change to self-employed and you will not be required to make any contributions to your KiwiSaver account.

KiwiSaver is very flexible if you’re self-employed. You’re not required to contribute a set percentage of your pay. Instead you can agree your contribution level with your KiwiSaver provider. Some providers may have minimum contribution requirements. You can either: Read More »

Further 4% Penalty applied on 15th January 2015 Unpaid GST

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Last Thursday, 15th January 2015, for many entities (read our post about what an entity is) was the GST Due Date for the GST Period 1st October 2014 to the 30th November 2014. If you were you unable to pay the GST due then please note that: –

  • An initial 1% late payment penalty has been charged on the day after the due date.
  • A further 4% penalty will be charged if there is still an amount of unpaid tax (including penalties) at the end of the 7th day from the due date.

Read More »

How to always pay GST on time, every time

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It would be very remiss of me not to address my previous post Unable to pay GST? Take Action Now without offering a solution on how to ensure that you always have funds available to pay your GST in full when it is due so as not to end up being unable to pay your GST.

I start by asking the question “Why is it that any Payments Basis Entity is unable to pay the GST Due on time?” Read More »

Unable to pay GST? Take action NOW

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The 28th of this month is the GST Due Date for the GST Period 1st June 2015 to the 31st July 2015. If you are unable to pay the GST due then please note that: –

  •     An initial 1% late payment penalty will be charged on the day after the due date.
  •     A further 4% penalty will be charged if there is still an amount of unpaid tax (including penalties) at the end of the 7th day from the due date.
  •     Every month the amount owing remains unpaid, a further 1% incremental penalty will be added.
  •     As well as the penalties above you will be charged interest on tax that remains unpaid until it is eventually paid.

Read More »

Yippee!!!! Today is our Quarterly Distribution Day.

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Profit First Book Cover

We are about to take our quarterly distribution cheque. That’s right, our business is serving us, now and we take a distribution cheque every quarter, every ninety days profit is shared to us.

An important aspect of the Profit First Methodology is for the business owner on the first day after the end of a quarter, to take a Quarterly Profit Distribution.

Let me explain: By implementing Profit First on the first day of each new quarter (or the first business day after), you, will take a profit distribution. This is done by adding up the total amount of profit in the Profit Account, taking 50% of the money as a profit distribution with the other half remaining in the Profit Account, as a reserve.

Not paying a quarterly distribution and want to start? Find out how

 

Are you taking a Quarterly Profit Distribution?

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Profit First Book Cover

An important aspect of the Profit First Methodology is for the business owner on the first day after the end of a quarter,to take a Quarterly Profit Distribution.

Let me explain: By implementing Profit First on the first day of each new quarter (or the first business day after), you, will take a profit distribution. This is done by adding up the total amount of profit in the Profit Account, taking 50% of the money as a profit distribution with the other half remaining in the Profit Account, as a reserve. Read More »

What is profit first?

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Profit First Book CoverOne of the best small business thinkers today, Mike Michalowicz recently released his third book, called Profit First. This book solves one of the biggest problems most entrepreneurs have: how do they actually get paid to run their business!

The story goes like this: The owner works really hard to sell and pay all their bills every month. When they go to pay themselves last, there is no money left! Mike’s new system proposes to change all of this and pay the owner first. Read how…

New Zealand’s Only Certified Profit First Professional

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We are the only firm in New Zealand to have received certification as a Profit First Professional.

certNot only do we have direct access to Mike Michalowicz (mi-‘kal-o`-wits) the author of the book Profit First and the Profit First Professionals Team, we also have access to all the global Certified Profit First Professionals, who are all working with clients using the Profit First Formula.

What does this mean for you? As you can see we have access to a wealth of knowledge and experience, through the Profit First Professionals network, to be able to address any situation you find yourself in. We are able to guide you using the Profit First methodology to greatly increase the profitability of your business.

Of course, we are able to help you with your books, manage your accounts and do your tax returns – but any bookkeeper can do that.  Where we differ is that we also provide the most important financial factor – helping you make more profit.

Five simple steps for crisis survival

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It’s surprising how much value the average business now stores in digital form.

Imagine what would happen right now if you lost all your computers and servers through a fire, flood, or other extreme event. How long would it take you to get up and running again? Think of your accounting records, customer history and databases, emails, templates, spreadsheets, tenders and quotes, project management records, software programs and many more digital assets.

Just a few years ago, it might have taken days, weeks or even months to restore everything. Now, thanks to the latest technology, you can keep running seamlessly. You might lose other assets in a disaster, but there’s no longer any need to lose valuable digital assets. Read More »