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.

Mixing Business and Pleasure!

I have just got back from a trip around the state of Victoria.  Hired a Camper Van for the first time and travelled with Lynda and the two kids on a circuit round Great Ocean Road, the Grampians, and back to Melbourne through Bendigo.  It is a beautiful part of Australia and the family have really enjoyed the trip.  We were fortunate to tag this on at the start of a trip for a conference in Melbourne as part of Campbell Tyson Cooper White membership with NZCA.   NZCA is an affiliation to which we belong where like minded accountants can share ideas, strategies, and knowledge in a casual and relaxed environment.  The Melbourne seminar is focussing on networking strategies and techniques, something most accountants ordinarily struggle with!

CTCW is the principal sponsor of the Business and Innovation Expo that was planned to be held on the 7 May.  While there has been incredible interest and early involvement from many organisations in the Franklin district (as well as some outside of the district), there is also many businesses who expressed their difficulties with preparing exhibitions for the 7 May date on which the event was planned to be held.  In order to ensure that the maximum participation possible can be achieved, we have made the difficult decision to postpone the event until an as yet undecided future date.  This new date will be set after consultation with interested parties to ensure that they have additional time to prepare their exhibitions as well as incorporate the cost of the event into their marketing budget.  With the difficult recessionary times, CTCW fully understands the difficulties of funding and staffing expo events and as part of our commitment to the community we are seeking to enable as much participation as possible with our clients and their related business community.

If any of you would like to consider putting in an exhibition at the Expo, or are keen to register your interest to attend, please do not hesitate to contact either our reception or Niru at Enterprise Franklin Development Trust.

Have a great week.

Lincoln

One of many to come!

CTCW has a lot going on in the next few months.  We have had our first Business Breakfast seminar, Denise Boston’s upbeat presentation was empowering you to re-invent yourself for the New Year and make some positive changes in your professional and personal life, myaccountant newsletter coming out in March, the John Shackleton seminar coming up in March, our May Expo to look forward to, and that’s not touching on the things we will be doing directly with our clients.  We have our new intake of staff arriving the 15th March with Brigette, Pamela and David joining our crew.  I’ll tell you more about them once they move in.

 Have a great week

 Lincoln

Running Accountants!

   Taupo – a beautiful lake, amazing views of Ruapehu, Tongariro and Ngauruhoe, central to the North Island and outdoor central for tourists and locals a like.  And for some strange reason, thousands of people go there once a year to run/walk around it!  CTCW are sending two (!!!!) teams down this weekend to participate in one of the several huge events that Taupo puts on.  We have over 27 staff, family and friends going down to slug it out during the night and complete the 155km course sometime on Saturday afternoon.  Needless to say, there may be a small but happy party following the efforts.  Again – we are raising money for the South Auckland Health Foundation in our last big drive for the financial year.  Feel free to make some donations to a very worthwhile cause – making Accountants sweat!  Email Diane on mclaughlin@ctcw.co.nz she will be happy to take your money on behalf of SAHF.

Morning Tea Threatens Waistlines

Waistlines are constantly under threat at Campbell Tyson Cooper White. Due to the culinary expertise of many of our staff events such as the recently held International Food Day have resulted in sumptuous feasts being prepared for morning tea. Such was the enthusiasm of the staff involved, lunch and afternoon tea were also catered for. Our active Social Club organise regular events, which combined with the usual birthday party shouts and length of service celebrations result in some pretty amazing morning teas.

As the impact of this wonderful food has become all too obvious for some of our staff (including the writer) other initiatives have been thrown into full drive by our staff. Our recent session with John Shackleton has resulted with more than 50% of the staff deciding upon “body shape” goals and the birth of dieting and exercise clubs amongst staff. We are in the process of organising our Round the Lake relay team for February next year as well as other fitness events. We also have budding half iron men, although this should be referred to as iron women as we are yet to have a man take up the challenge!

Needless to say, our staff are incredibly active, be this working with our clients, on the social scene, or involved in personal development.

Catch you next week.

Lincoln

One persons junk is another persons treasure.

CTCW Garage Sale

As I have mentioned in a previous blog our staff have made South Auckland Health Foundation our principal charity for the 2010 financial year.  Although we contribute to many other worthwhile causes, our staff were keen to throw as much behind this excellent cause as possible.  We have undertaken many worthwhile projects so far, such as bucket rattling at the Auckland Warriors’ matches, knitting garments for newborn babies, cake and sweet sales in our offices, and pestering our clients for donations to our general cash fund which will be used to buy new equipment for the Pukekohe Maternity Hospital.  We aim to raise over $7,500 by 31 March next year ($4,100 collected so far).  Our latest initiative to generate more cash for this wonderful cause was a garage sale and sausage sizzle on Saturday, 31 October.  As well as being a great opportunity to pick up some excellent bargains, we had some super people helping by contributing funds to the baby phototherapy wrap for Pukekohe Maternity Hospital.  It kicked off from 8.00 am (although the bargain hunters were there from 6.45!) in the car park behind our building on 17 Hall Street.  Our staff made an amazing effort and we have raised close to $3,000 from the garage sale alone!!!  Thank you to all those who contributed their time, goods and cash.

Watch this space for an update on our target!

Lincoln

The Bean and The Coffee Bean

I’m going to have to run a poll on visitors to our office. We consistently get told we make wonderful coffee and even have clients who come in specifically to have a cup. It’s amazing what a hot drink (and caffeine!) can do for your disposition and state of mind. I think we would have a staff riot on our hands if our machine broke down! We also have an excellent business and personal development library in our reception that we make available to our clients. With the weather we have been having this October, there are worse things than sitting having a nice coffee and reading some interesting literature.

Good news in the paper this morning with employment starting an upward trend with more people leaving the unemployment benefit than signing up. Whether it is a seasonal thing or further evidence of an improvement in state of the economy is too soon to tell, but improving property prices (up a small percentage) will see some people with more of a “spring” in their step.

Have a great week.
Lincoln

A Stitch In Time, Saves Lives.

Choosing just one charity to support when there are so many worthy causes is not an easy task.  For us, South Auckland Health Foundation (SAHF) answered a lot of our criteria.  The Foundation raises funds which assists the community in which we live and is committed to improving all areas of health.  It is a charity that was established by the late Terry Harris (an ex-Partner of our Firm) and our ability to be involved has special meaning to a lot of our staff.   It is also a Charity where our support could be more than just financial.

 SAHF has a knitting programme and we have a small but dedicated number of staff (see our last MyAccountant newsletter!) who knit hats, booties and cardigans, supporting SAHF’s effort to ensure new born babies leave South Auckland Hospitals with warm clothes.

 Generalisations aside, our largely female staff contribute many pre-loved magazines to the cause.  These are used in waiting rooms in an effort to provide current reading material.

 SAHF is able to undertake some large fundraising events and is supported by the Auckland Blues and the Warriors.  Volunteers to “shake buckets” or assist at these events are always wanted.  CTCW staff have been able to volunteer their time at an Auckland Blues game and coming up will volunteer at a local event – “Kids in Cars” to be held at Pukekohe Raceway on 11 October 2009 (see our “Upcoming Events” on our website).

 CTCW are also committed to raising $7,500 this year to provide our local maternity hospital with much needed equipment.  We are achieving this by organising bake sales at work, a very successful auction and have a few projects in the pipelines, including a garage sale.

 Supporting SAHF allows all the staff at CTCW to contribute to our community and in doing so, fosters a sense of pride in what we are able to achieve.  IF you would like to join our effort, get in touch with our coordinator, Diane McLaughlin and see what we can do together.

 Have a great week.

Lincoln