to contact us call
0800 11 33 99
jamie@e3accountants.co.nz
Office: 10 Oxford Terrace, Christchurch, NZ

If you're still paying your accountant for how long it takes to do your work, you're not paying for the efficient production of your accounts.

For an accounting quote or free business advice, please call me on
(03) 379 2343 or email jamie@e3accountants.co.nz

Jamie Tulloch
Managing Director

15% GST
Not as simple as many believe
Just over 8 weeks to go to the biggest change in GST for 20 years. There are many issues for business owners to be aware of and if you are GST registered, you need to be seeking advice from your accountant, your accounting software provider and maybe even your lawyer.

E3 Business Accountants are running a series of Breakfast Workshops for our clients and it is obvious that these are very timely and right on target to raise awareness of what needs to be done now before the 1st October.

After the 1st October, you will be dealing with two GST rates for transactions that span both periods. Can your accounting software cope? Do your accounts people (or whoever enters your data) know how to deal with lay-bys, refunds, work in progress, debtors and creditors as at 30th September, quotes, existing agreements and contracts, enduring invoices, insurance premiums paid monthly, FBT, non-standard balance dates (i.e not 31 March), stock on hand, POS receipts, imports, customs, etc etc? This is just a small sample.

The point I'm making is that if you are reading this newsletter and you are not a client of E3, then you need to contact your accountant and get customised advice for your business (or change to E3!).

If you want to join E3 and get pro-active advice, support and training, then please phone me on 03 379 2343 or email jamie@e3accountants.co.nz

TAX TIP
Spouse/partner going to conference
IRD is circumspect about claims for the cost of taking a family member to a conference.

The argument that a partner is expected to attend is weak. In 1988 Case K 75 referred to a husband taking his wife to an overseas conference put on by a directly associated company to the one which employed him.

The Taxation Review Authority, in allowing the deduction, noted that it was company policy for wives to accompany executives to overseas conferences and on other business trips. The company benefited because the wives were familiar with company business and contributed to business-related social activities.

The Judge also said “At these conferences and meetings Mrs G's presence was expected for a delegate of the stature of Mr G." Perhaps one should be forgiven for asking what stature has to do with tax deductibility.

Note case K 75 refers to a directly associated company only. It does not cover any conference.

Generally, the spouse needs to be actively engaged in the business while overseas or contribute in some integral way to the conference, for a claim of costs to be acceptable. Claiming the cost of taking a spouse to any conference, at which it is generally expected that a spouse will attend, may be deemed a private cost by IRD. There would probably be insufficient nexus between the income earning activity and the cost.

LEADERSHIP TIP
Lead with Creativity
A recent survey of 1,500 chief executives by IBM’s Institute for Business Value, has found creativity is the most important leadership competency for successful businesses in the future. Respondents say success requires fresh thinking and continuous innovation at all levels of the organisation. The study says a strategy of creative thinking should disrupt the status quo, disrupt existing business models, and disrupt organisational paralysis.
(Thanks to The Main Report)

BUSINESS VALUE
WHAT'S YOUR BUSINESS WORTH?
ASB Bank says for business owners looking to sell, profit is king again for valuations, replacing “customer base” as the most important factor. A survey conducted by the bank found 89% of businesses looking to sell think profit is the most important consideration, with customer base next. There was also an 11% decline in the number of businesses intending to close, compared with the previous quarter, while there are signs business values are rising again, with a one-third drop in the number of businesses said to be worth less than $250,000.

Around a quarter of those surveyed said their businesses were worth $250,000 to $500,000, 14% were between $500,000 and $1m, and another 14% for firms worth between $1m to $5m, while 5% say their businesses are worth more than $5m Most business owners surveyed believe it is not a good time to sell. The most popular means of realising the value in a business was through selling to an unidentified buyer, at 27%, followed by sale to a targeted buyer outside of the business, at 22%.

GIFTING TO TRUSTS
Gifting is under review. Should you stop gifting? Our advice is to continue with annual gifting until details are known. Very little tax (gift duty) is collected so the government is looking at repealing gift duty altogether. However, careful consideration in the legislation needs to be applied to ensure protection from creditors and social welfare rorts are not initiated. SONG TITLES TO ENJOY

Get Your Tongue Outta My Mouth ‘Cause I’m Kissing You Goodbye

If I Had Shot You When I Wanted To, I’d Be Out By Now

You’re the Reason Our Kids Are So Ugly

Can’t Get Over You, So Why Don’t You Get Under Me?

All My Exes Live in Texas

I Thought She Was Out Jogging,
But She Was Running Around On Me

If the Phone Don’t Ring, It’s Me Not Calling You Up

Her Teeth were Stained, but her Heart was Pure

At the Gas Station of Love, I Got the Self-Service Pump

How Come Your Dog Don’t Bite Nobody But Me?

I Wish I Were a Woman (So I Could Go Out With a Guy Like Me)

If You Can’t Live Without Me, Why Aren’t You Dead Yet?

Heaven’s Just A Sin away

She Made Toothpicks Out Of The Timber Of My Heart