The Move to Online Retail

The internet is now the number one shopping destination globally, and not surprisingly.

For customers, it's ideal. There's no need to get in the car and visit ten shops without finding exactly what you want.  This way, it's all in one place and you needn't battle with other shoppers for the nearest and driest car park.  

We have all become a bit impatient too.  Purchases from your phone, tablet or desktop at any hour of the day or night help satisfy the 'I want it now' impulse even if actual delivery is some way off.  

If you have a product or service but do not yet offer it online, you could be losing business.  In today's world, the sooner you move online, the better. 

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Provisional tax and GST are due on 15 January.

The timing of these payments isn't ideal as many of you will be indulging in the delights a summer break offers.

But it's important that you don't neglect your tax obligations – especially as Inland Revenue will charge 8.22 percent interest and late payment penalties if you don't pay the tax you are required to pay on time.

That's why we have put together some suggestions to help you get tax-ready before Christmas.

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Season's greetings!

Thank you for all your support this year.

Are you still tacking up the tinsel while thinking about everything on your to-do list? 

Do you have all your reindeer in a row or is your sleigh skidding into the silly season?

Check your cashflow to make sure the business is in good shape for December and January tax dates.

Business culture tied to business performance

While it's easy to think of business culture as a bit soft compared with, say, achieving sales, in fact it's anything but. 

A 2014 study reported that public companies named in a "Best Places to Work" list in 2009 outperformed the S&P 500 by 115 percent in the following five years.

The Glassdoor study suggests that a culture that engages and motivates employees helps the bottom line. 

But the reverse isn't true: A company's success isn't enough to produce a positive culture, and companies that succeed without a positive culture are likely to see performance decline.

So if your business is performing well, great.  But if it's doing so at the expense of employee satisfaction and happiness, chances are that your current success is unsustainable – especially in economically tougher times.

So how do you address that?  Read on for four things you could look at.

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New Zealand is a "standout nation" according to the latest Digital Evolution Index, released by Tufts University in Boston in July.

The report, by the university's The Fletcher School, identifies New Zealand as among the digital elites, having high levels of digital development and a fast rate of digital evolution.

Has your business contributed to this result? 

One way to be up there is to use digital technology to strengthen company culture.

Social media creates experiences. 

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IRD has good news and bad news on FBT

You may provide company vehicles to some employees. 

In some cases, the vehicle is a work tool – for example, a ute for a project manager.  In other cases, it is part of a salary package.

Whatever the reason, Inland Revenue has good news and bad news.

The good news is that IRD has consolidated all its published statements on motor vehicle FBT into one 57-page document with a logical flow, making the topic easier for you to understand.

Although that doesn't necessarily mean it's easy!

The bad news is that IRD's views on how FBT applies may, in some circumstances, be a bit contentious.

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New Zealand Trust law to be overhauled

Parliamentary plastic surgery is in store for the Trustee Act, to make trust law easier to access and understand.

On 1 August, Justice Minister Amy Adams introduced the Trusts Bill to Parliament.  This will be the first significant change since the introduction of the Trustee Act 1956. 

The old Act has been viewed as being narrow in scope, with trust administration being complicated and expensive.

Most trusts, like family trusts, business trusts and protective trusts, are set up with a trust deed or other document, like a will.  These are known as express trusts.

In the new Bill, it expressly states that trustees will have to:
  • Know the terms of the trust
  • Act according to the terms of the trust
  • Act honestly and in good faith
  • Hold trust property
  • Act for the benefit of the beneficiaries or the permitted purpose
  • Exercise trustee powers for a proper purpose.

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GST made easy

Do you hate it when GST return time rolls around?  If so, you're in good company.

For many business owners, the pain isn't so much having to hand money over to IRD, but having to prepare and file a return.

But that pain is easy to avoid.  Here's how:
  • If we complete your returns, of course everything will be done for you
  • If you are GST registered and we don't prepare your returns for you, you may need to check your bank account details.  The easiest way to do this is via your myIR account.
The section inside your myIR account called "My GST" lets you:

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Tenants must be informed of insulation status

It's been compulsory since 1 July last year for any new tenancy agreement to include an Insulation Statement.

That means landlords must record if rentals have insulation, where it is, the type of insulation and its condition.

That allows tenants or potential tenants to make more informed decisions about renting.

Insulating rentals is now mandatory

On top of that, if you have rental property without floor and/or ceiling insulation, you have until 1 July 2019 to install it.

If you don't have an Insulation Statement, or your property remains uninsulated from 1 July 2019, you can be fined up to $4000.

The insulation requirements don't apply to in-ground concrete floors and integral ceilings-floors in a multi-storey dwelling.

Note that it's illegal to install or repair electrically conductive insulation, known as foil insulation, in any residence.  A breach could cost you up to $200,000.

Contact us if you have any questions.

Subject to Disclaimer 

Airbnb usually a tax case on its own

If you use Airbnb to provide short-term accommodation in your house in which you also live, the IRD's "mixed-use asset (holiday home)" rules don't apply and guests are not classed as boarders.  

Except when you list a whole house which is vacant for 62 days each year, mixed-use asset rules do apply and calculations differ from those for homes where the hosts also live.

Claimable expenses

Anything you spend as an Airbnb service provider may be claimed as an expense.  

For shared expenses, like power and Internet, claims need to be fair and reasonable.  You can claim some home utilities, rates, insurance, and interest – and all food and other consumables that guests use.  
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