You’ve got to be a Kiwi. Well, almost. The Companies Office says so.

Companies incorporated in New Zealand after 1 May 2015 have needed to:

• Provide dates and places of birth of all directors
• Ensure that one director lives in New Zealand, or is an Australian who is also a director of an Australian Company (details will need to be provided – see below)
• Provide details of a ultimate holding company, if appropriate

From 1 July, companies incorporated prior to 1 May 2015 have needed to file annual returns indicating:

• Provide dates and places of birth of all directors
• Details of a ultimate holding company, if appropriate

28 October 2015 is rapidly approaching, at which point all companies in New Zealand will need to ensure:

• That one director lives in New Zealand, or is an Australian who is also a director of an Australian Company
• They can provide the ACN, name and registered office of Australian Companies of which Australian Directors are also a Director

Limited Partnerships, still only seen as rarely as the Kiwi Bird, have similar provisions for their general partners, but are effective from 27 February 2015.

It’s a good time to review your Board and ensure you have Kiwi’s or “trustworthy” Australians!

Trust Review will happen, just not right now

Justice minister Amy Adams said that the Government had accept the recommendations of the 2013 Law Commission’s review of Trusts and Trust Law in New Zealand.

At the latest Law Society Conference, Ms Adams said that a new act is critical and long overdue.  There has been no major reform to the Trustee Act since it’s formation in 1956, almost 60 years ago.

Although Ms Adams has said that it is one of her core requirements, don’t expect to have an exposure draft (the first step in passing the reform legislation) until the end of next year.

Ms Adams said the delay was necessary to ensure there aren’t any unintended consequences in the new Act.

New Zealand has more Trusts per capita than any other country with a trust for every 18 New Zealanders, nearly double Australia’s one for every 34 people and compared with 148 in Canada and 294 in the UK.  It works out at around a quarter of million Trusts.  It’s estimated that 15% of residential property in New Zealand is owned by Trusts.

What does this mean for us?  Well, most likely using Trusts will become more onerous and costly, as many of the recommendations involve greater transparency (i.e. the need to open up records and information to vested parties), greater Trustee responsibilities (i.e. personal liability), and possible regulatory oversight (i.e. something similar to the Companies Office that Companies must report to).  These changes will no doubt result in a reduction in the number Trusts as people decide that the Trust has become too costly, or risky, to continue with.

It still comes back to making sure you are using a Trust for the right reasons.  Although in the past Kiwis have treated it otherwise, Trusts aren’t for everyone.

There and back again

It’s been a crazy six months since I last blogged.  My son had a life threatening accident which had a profound affect on me, I’m approaching my 40th birthday with mixed perspectives, and my daughter has started school.  Campbell Tyson has changed markedly with the retirement of one director (Nigel Hicks, a long and faithful servant of CT), the future appointment of another (Mat Robertson, on 1 April 2013), moved premises (Level 2, 1 Wesley Street), new server (big thank you to OutsourceIT), new phone system (thanks Sietec), and I am taking over as Managing Director on 1 April 2013 (from Glen Beal, after a formational/inspirational 5 years in the role).  A fair bit for six months!

So, what now?  Well, with any change there comes consolidation and refinement.  I look forward to working with the superb team here at Campbell Tyson to assisting our clients to “Improve Beyond Today”.  And I will keep you posted on how we go with this blog!

Meetings, meetings and, oops, another meeting

Stephen Lynch from Results.com has a great strategy he uses to ensure when he is meeting with a team member, its a productive discussion:

As a leader, you want to encourage your people to think though the issues first, and make good decisions themselves.  Alternatively, if it is a situation where they really do need your input or sign off – you want them to present all the options along with their thoughtful recommendation as to what the right decision should be.

I recommend training your people to use GROW framework to think through the issues – and even have them present issues to you in this manner.

G = Goal

What is the goal?  What is the outcome we want to achieve here?

R = Reality

What is the current reality?  What is happening and why?

O = Options

What options do we have?  What are the implications of each option?

W = Will

What WILL we do?  Here is my recommendation

Yes, things may take longer to resolve initially – but you must be disciplined if you want to stop getting sucked into “reverse delegation.” Push back, and tell your people to go away and present their issues to you in this manner until it becomes their new default behavior.

In effect, you are now learning to delegate more effectively.  You GROW your people by making these situations a valuable coaching opportunity – with the intent to teach your team how to problem solve and make great decisions without you needing to be there all the time.

Simple, but you can see how it would be effective.

Till next time.

Pay rise time!

New minimum wage rates take effect from 1 April 2012. The new adult minimum wage rates (before tax) that apply for employees aged 16 or over will be:

· $13.50 an hour, which is

· $108.00 for an 8-hour day or

· $540.00 for a 40-hour week.

The new minimum wage rates that apply to new entrants and employees on the training minimum wage (before tax) will increase to:

· $10.80 an hour, which is

· $86.40 for an 8-hour day or

· $432.00 for a 40-hour week.

Record keeping is very important regardless. To cover potential claims, questions and audit, you need to:

1 Keep worked time records. This is a legal requirement and ensures you know how many hours everyone is working.

2 Ensure that in any pay period the salary amount paid to your staff member meets the minimum wage rates above.

Till next time.

Impending Year End

For those of you with a standard balance date (31 March), we have the financial/tax year end coming up fast.  The following are a number of ways you can legitimately manage your tax position.

1. Consider prepaying certain expenses – Some expenses can be prepaid in March and claimed as a tax deduction in the year to 31 March 2012, regardless of their amount.  These include stationery, postage and courier charges, vehicle registration and road user charges, rates, subscriptions for papers or journals, and even audit and accounting fees!Other expenses have limits on the extent to which they can be claimed if prepaid.  These include rent, consumables, insurance premiums, professional or trade subscriptions, travel and accommodation, advertising, periodic charges and other services.  The rules surrounding prepayments are quite complex, so if you’re planning this type of expenditure, please contact us.
2. Trading Stock– Trading stock (excluding livestock) must be valued at the lower of cost or realisable value.  General adjustments for obsolete stock are not acceptable to Inland Revenue.  It’s important therefore to perform a physical stock take at year end and actually dispose of any obsolete lines or alternatively write that stock down to its net realisable value.Clients with an annual turnover of less than $1.3m can value their closing stock at the opening stock value, but only where closing stock can be reliably estimated to be less than $10,000.
3. Loss offsets and subvention payments – 2011 loss offset or subvention elections must be filed with IRD on or before 31 March 2012.  Subvention payments relating to the 2011 income year must be paid by 31 March this year.  The IRD changed its practice of requiring an actual physical payment, and now accepts that a subvention payment can also be made by book entries so long as the payment obligation is discharged. 
4. Write off any bad debts – To claim a deduction for a bad debt you need to physically write the debt off in your debtors’ ledger prior to the end of your financial year.  For most clients that’s 31 March 2012.  There should also be evidence that you have taken reasonable steps to recover the debt prior to writing it off.
5. Employee expenses – Any amounts owing to employees at year end (such as holiday pay, bonuses, long service leave, redundancy payments) can be claimed for tax purposes in the current year as long as they are paid within 63 days of balance date.
6. Review last years fixed asset register – The book value of assets can be written off for tax purposes if the asset is no longer in use by the business, the business has no intention of using that asset in the future and the cost of disposing that asset is expected to be greater than the proceeds from its sale.  Actually, it’s simpler than that.  Scan your asset schedule from last year’s accounts and you’ll probably notice assets that no longer exist (the mobile phone that you dropped in the tide at Christmas time), or simply don’t work.
7. Retentions – Retentions on building contracts are generally taxable in the year the contractor becomes legally entitled to receive them.  This can result in significant deferral of income.
8. Discount Reserves – A deduction for a discount reserve, to cover for example prompt payment discounts, is allowable where debtors are entitled to such a discount.  In the first year a deduction of the actual discount percentage is allowed and in subsequent years a calculation is made to maintain the discount reserve at that percentage level.  If the credit period offered to customers exceeds 93 days, different rules apply
9. Repairs and maintenance – General adjustments for repairs and maintenance reserves are not allowed as a tax deduction.  Instead it may be worthwhile to undertake any necessary repairs and maintenance on key assets prior to the end of the financial year to ensure a full deduction.  Deciding whether expenditure on an asset is deductible as repairs or maintenance or should be capitalised is not always cut and dried, so please contact us if you aren’t sure.
10. Imputation credits and dividends– Companies that have imputation credits for tax paid at 30% have until 31 March 2013 to distribute dividends with those imputation credits attached up to the previous maximum of 30:70.  But tax paid at 28% for the 2011-12 income year and onwards can only be attached at the new rate of 28:72.In addition, imputation credit account balances must not be overdrawn as at 31 March each year.  If so, they attract penalties.

    We realise the subject for imputation credits is complex for many of our clients.  Rest assured we will contact you regarding any necessary dividend and taxation planning before 31 March.

11. Income – Be sure to review any credit notes issued to customers following balance date that can be applied to the previous year, i.e. 31 March 2011.  In doing so, you will be entitled to effectively reduce your current year’s taxable income.

If you are uncertain on any of the above issues, or had a query concerning what you are able to do to plan for the year end, don’t hesitate to drop me a line.

Till next time.

The Same, yet different

The cat is out of the bag. CTCW will no longer be CTCW on 1 April 2012.  Campbell Tyson will be the name replacing Campbell Tyson Cooper White, something Jacqui our receptionist is greatly looking forward to.  Have you ever heard someone rattling off a seven syllable name before she even gets to hers up to a couple of hundred times a day?  Exhausting!

It does raise an interesting point, how important is a name?  We believe it is very important for us.  Campbell Tyson celebrated its 90th birthday on 1 March 2012.  Admittedly, the name has changed many times over the years, but the Campbell name has been there longer than most.  That cornerstone name has provided the impression of gravity and stability that the firm has stood for.  The Tyson name has, through shared “real estate”, taken the same connection.  The Cooper White aspect, not given up lightly, has contributed significantly to our culture, and while the names may not be on the letterhead, they still influence what we do and how we do it.

How will the name change affect what we do?  It won’t.  We will still be striving to go beyond what our clients expect in terms of performance and service.  We will continue to be “thinking forward” rather than focusing on historical data, looking for opportunities for our clients.

You will no longer see a list of the Partners of the firm on our letterhead.  Our Team approach to supporting our clients means that everyone on our staff is integral to the service we provide.  Putting 56 names on our stationery would be over the top, however!

What you will see is different signage, different colours, a different motif and easier phone introductions in your dealings with Campbell Tyson.  Same great service!

Till next time.