Essential end of year housekeeping & updates

Date: 9th April 2015

We’ve clicked over to 2015/2016 – Happy Financial New Year! It’s time to start thinking about getting your accounts ready to hand over to your accountant so we’ve included a handy end of year checklist below to help you get started. Plus, as of the 1st of April 2015 came a number of law changes that may affect your business.  Check out the changes to the minimum wage, employment law and ACC levies.

keep-calm-new-financial-year

End of year checklist

  •  Contracts – have you invoiced retentions that are not due and payable for another year? If they are payable in the 2014/15 year they need to be declared as income but if not, the income will be deferred to a subsequent year.
  • Credit notes – issued to customers after 31 March may be applied to the previous year, potentially reducing the current year’s taxable income.
  • Debtors – have you taken reasonable steps to recover bad debts? If so, and you write them off before 31 March, you may be able to claim a deduction.
  • Discounts for prompt payment – if you maintain a discount reserve, it is deductible. In the first year a deduction for the actual discount percentage is allowed. In subsequent years, the amount is calculated as a percentage. Different rules apply if credit extended to customers exceeds 93 days.
  • Dividends and imputation credits – consider reviewing planned dividend payments. The imputation credit account must not have a debit balance at 31 March otherwise penalties may arise.
  • Employee expenses – amounts owing for holiday pay, bonuses, redundancy payments, long service leave etc. can be claimed, if you have committed to them at year end and they’re paid within 63 days.
  • Fixed assets – do you have any that you are no longer using or don’t intend to use in future? If so, the book value may be able to be written off.
  • Loss offset elections and subvention paymentstalk to us if you think the company will make a loss.
  • Stock – dispose of obsolete trading stock by 31 March or write it down to net realisable value (lesser of cost or market value). If the stock is worth less than $10,000 and your turnover is less than $1.3m for the year, you won’t need to include your stock movement for tax purposes.

What changes on 1 April 2015?

Minimum wage

The minimum wage will increase to $14.75 per hour. Training and starting-out minimum wages will increase to $11.80 per hour.

Employment Law Changes

More flexibility and choice at work underpin changes in the Employment Relations Amendment Act, which came into effect on 6 March.  The Act includes a handful of changes that will affect small to medium businesses, including more flexibility around rest and meal breaks, and opening flexi-time up to everyone not only parents and caregivers. Read more.

Employee Allowances

The IRD are making it easier to work out what your PAYE tax obligations are for accommodation meals and clothing allowances, and how to comply with them. More details.

Mondayisation of ANZAC and Waitangi Days

The ‘Mondayisation Bill’ states that from now on, when Waitangi Day (6 February) or ANZAC Day (25 April) fall on a weekend, the public holiday must be treated as falling on the following Monday for employees who would not otherwise work on that Saturday or Sunday. For employees who would normally otherwise work on that Saturday or Sunday, the public holiday must still be treated as falling on that day.  More details.

ACC levy reductions

From the  1st of April the average work levy paid by employers and those who are self-employed fell from 95c to 90c on every liable $100 earned. This is an average decrease of 5%.

The ACC Motor Vehicle levy will also fall from 1 July. The average levy which you pay through your licensing fee (your vehicle registration) will fall by an average of 41%; and you will save 3c a litre when purchasing petrol. More details.

Please contact us if you have any questions or concerns about preparing for end of year; or how the above changes may affect your business.

 

 

 



Posted in: Alexandra, Christchurch, Latest News, Queenstown, Wanaka