McLEAN AND CO.

 
 
EMAIL NEWSLETTER AUGUST 2003
 

Welcome again to the McLean and Co. Newsletter in which we discuss current taxation and business matters. We trust you find it informative.  Any feedback would be welcomed.

McLean and Co. has installed Norton Antivirus software to minimise risk of virus transmission in the provision of this service.

McLean and Co. is a home based chartered accountancy practice based in Clive, Hawkes Bay.    Readers are invited to peruse the practice website www.mcleanandco.co.nz,  which lists services provided, gives contact details and indicates how to become a client, contains an extensive base of articles on business and taxation matters,  and has links to other websites that may assist your business.    Being a small firm itself,   McLean and Co. strives to provide a personal and professional service largely to a self employed person and small business client base.  Enquiries are welcomed.

 

INDEX

  1. Relevant Business and Taxation Articles

  2. Bankruptcy- Tax Position

  3. Speeding Up your Computer

  4. Minumum Wage Rates 

  5. GST- Zero rated Supplies   

  6. GST- Exempt Supplies

  7. GST- Secondhand Goods

  8. Non-standard Balance Date

 

RELEVANT BUSINESS AND TAXATION ARTICLES

The McLean and Co. website contains an extensive number of articles prepared by McLean and Co. relating to taxation and business matters.    Here are a selection that will be of interest:

 
NEW CLIENTS

We are happy to accept new clients.  Please contact ourselves at the contact points highlighted above if we can assist you in your accounting and taxation requirements. Our website lists information required for this in the following link:

 

BANKRUPTCY- TAX POSITION

On bankruptcy all money owed to IRD at the date of bankruptcy , with the exeption of Child Support but including Student Loan amounts, will form part of IRD's claim.   IRD will write off any amount that cannot be recovered due to bankruptcy.

A liable person who becomes bankrupt still has to pay their existing Child Support debt, along with any future Child Support liability.

The Official Assignee will receive any tax refunds owing to the bankrupt taxpayer during the term of the bankruptcy.  Once discharge from bankruptcy is obtained, any refunds go to the taxpayer , unless there are other post-bankruptcy tax debts.

A new IRD Number is automatically issued by IRD from the date of bankruptcy, so that IRD can keep pre- and post- bankruptcy tax accounts separate.   Bankrupt taxpayers need to give their new IRD Number to all parties who previously held the pre-bankruptcy IRD Number e.g employers, banks, and Work and Income (including its StudyLink service for subsequent student loans drawn down)

A bankrupt is required to file all returns due up to the date of bankruptcy.   If a bankrupt is required to file for income tax, they must file one return from 1 April to the date of bankruptcy, under the original IRD Number, and another return from the date of bankruptcy until 31 March, under the new IRD number.

 

SPEEDING UP YOUR COMPUTER

When PCs get slower the chances are they need a clean out.  Try the steps below to speed up your PC.

Its unlikely that these steps will harm data on your PC , but we can't be held responsible for any loss of data or other consequences arising for activating these steps.

Cleaning Out Unused Files

This action will delete temporary and unused files that eat up valuable disk space.  Disk Cleanup will ask you to identify which disks need cleaning and scan it for files that can be safely deleted

Start------------->  Programmes----------------->Accessories---------------------> System Tools----------------> Disk Cleanup

Defrag

Files which are saved and deleted can quickly become scattered across your hard disk, which slows your PC as it has to search for file fragments before the file can load.   Defragging a PC hard disk can take some time and you shouldn't use your PC while it is running, so defrag when you dont need your PC for several hours.

Start------------->  Programmes----------------->Accessories---------------------> System Tools----------------> Disk Defragmenter

 

MINIMUM WAGES

The minimum wage rates were revised upwards from 24 March, 2003. The new rates are:

 

Youths

(16-17)

Adults (18+)

 

 

 

Per hr

$6.80

$8.50

8 hr Day

$54.40

$68.00

40 hr Week

$272.00

$340.00

 

The minimum wage rates apply to all types of work and workers aged 16 years and over (including full-time, part-time or casual employees; homeworkers, commission and piece rate workers) with the following exceptions:  

 

§         Under Rate Permits – granted by labour inspectors for workers incapable of earning wages at the appropriate minimum rate prescribed.  

 

§   Training Rates – applying to apprentices working under apprenticeship contracts covered by the Industry Training Act.

 

§         Board and Lodging Deductions – which may reduce the minimum wage by up to 15% for board and up to 5% for lodging.  

 

Note, there is no minimum wage for people under the age of 16.

 

 

GST - ZERO RATED SUPPLIES

Goods and Service Tax is calculated at the rate of 0% rather than the standard rate for some supplies.    The 0% rate appies to supplies of:

  • exported goods
  • exported services
  • goods situated overseas
  • taxable activities disposed of as going concerns
  • newly refined precious metal
  • certain supplies in respect of which excise duty and petroleum duty are payable.

Zero-rating only applies if the supply would otherwise be taxable at the standard rate.  Supplies which are taxed at either the standard rate or 0% are termed "taxable supplies"

 

GST - EXEMPT SUPPLIES   

Exempt Supplies are expressly excluded from GST.   The following are exempt:

  • supplies of financial services
  • supplies made by a non-profit body of donated goods and services
  • supplies of residential accommodation, including supplies of leasehold land used for that purpose
  • supplies of fine metal (other than those that have been zero-rated)
  • the sale of a house, or the reversionary interest in fee simple estate of leasehold land, which has been used by the same person in the five years previous to the sale exclusively for the supply of residential accommodation
  • penalty or default interest

 

GST - SECONDHAND GOODS  

A GST registered person who purchases secondhand goods in the course of a taxable activity may be able to claim a secondhand goods credit.   A credit can be claimed only if:

  • the goods are purchased for the principal purpose of making taxable supplies
  • the goods are in New Zealand
  • the sale is a non-taxable supply (e.g. a supply made by an unregistered person or an exempt supply) by way of sale, and
  • payment has been made during  the relevant taxable period
The secondhand goods credit is not available if the purchaser or another GST registered person has previously claimed an imput tax credit for customs levied on the importation of goods.
 
The secondhand goods credit is one-ninth of the money consideration of the supply.
 

 NON-STANDARD BALANCE DATES  

Non-standard balance dates fall into two categories:

  • An early balance date is one that falls in the period 1 October to 30 March (inclusive) in the six months before 31 March

  • A late balance date is one that falls in the period 1 April to 30 September in the six months after 31 March.

Some industries have recognised non-standard balance dates, as shown below:

Industry

Balance Date

Apiarist

30 November or 31 December

Beef Cattle or Dairy Farming

31 May

Education and Childcare related Services

31 December

Fishing

30 September

Horse Breeding

31 July

Kiwifruit Orchard

31 March, 30 April, 31 May or 30 June

Meat Processing or Orchard

31 August or 30 September

Pipfruit Orchard

31 December

Seed Dressers

30 November

Sheep Farming

30 June

Tobacco Growing

31 July

 

If you wish to apply for a non-standard balance date you need to include the following information in your written application:

  • your full name and IRD number.
  • the industry you belong to
  • the balance date you wish to use
  • reasons why you want a non-standard balance date
  • the names of any associated businesses that already use this balance date and their IRD number if known)

If you do not belong to one of the industry groups mentioned or you want to use a non-standard balance wish to apply for a non-standard balance date not specified above, you need to include the following additional information in your written application:

  • details of actual or predicted cash flows, stock patterns, customer demands and seasonal patterns
  • any other information to show that financial accounts prepared to the proposed non-standard balance date would be more appropriate than using a 31 March balance date.
 

If we can assist further, please email McLean and Co as follows:

 CONTACT McLEAN AND CO. BY EMAIL BY CLICKING ON THIS LINK

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