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 »

Do I need a business bank account?

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As a new start-up or new part time business owner do not fall into the bad habit of co-mingling your finances with your personal money. While it may be the easiest, most convenient and cheapest way of operating, it can have its drawbacks – especially further down the line. As a new business owner you need treat your business as a business, regardless of whether it’s a part-time venture or not; while setting up a separate bank account could mean additional bank fees and expenses, if you don’t you could be storing up a lot of hassle for yourself in the future.

All our clients will vouch that keeping their business spending completely separate from their personal account ensures manageability.

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Storing taxpayer electronic records offshore – Xero Limited Approved

Inland Revenue advised on 21 October 2013 that the following organisations have been approved under s 22(8)(a) of the Tax Administration Act 1994 to store taxpayers’ electronic records outside of New Zealand:

  • • CargoWise NZ Limited
  • • MYOB NZ Limited, and
  • • Xero Limited.

Taxpayers who store their business records with these approved organisations do not need to obtain approval under s 22(2BA) to store their business records outside of New Zealand.

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