<rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:dc="http://purl.org/dc/elements/1.1/"><channel><title>lowthersaccountants</title><description>lowthersaccountants</description><link>https://www.lowthersaccountants.com/chartered-accountants-news</link><item><title>Check out Audit Shield on our Facebook Page</title><description><![CDATA[Connect with us on Facebook to keep up to date with what we are doing. Recently we have taken up a Master Policy with Audit Shield which enables our client to jump on board with us and protect themselves against unexpected fees]]></description><dc:creator>published by Lowthers Chartered Accountants</dc:creator><link>https://www.lowthersaccountants.com/single-post/2018/08/31/Check-out-Audit-Shield-on-our-Facebook-Page</link><guid>https://www.lowthersaccountants.com/single-post/2018/08/31/Check-out-Audit-Shield-on-our-Facebook-Page</guid><pubDate>Fri, 31 Aug 2018 00:45:53 +0000</pubDate><content:encoded><![CDATA[<div><iframe src="//static.usrfiles.com/html/2060b5_b20f2e2b5e2581aa65d12fe28b5636b2.html"/><div>Connect with us on Facebook to keep up to date with what we are doing. Recently we have taken up a Master Policy with <a href="https://www.accountancyinsurance.co.nz/products-services">Audit Shield</a> which enables our client to jump on board with us and protect themselves against unexpected fees</div></div>]]></content:encoded></item><item><title>Introducing Genoapay!</title><description><![CDATA[Lowthers are happy to announce that we are now offering Genoapay. Pay your invoice over 10 weeks with no interest or fees. Get pre-approved today for up 10 $1000 at www.genopay.com<img src="http://static.wixstatic.com/media/e9c845_9a593dbf1084470bae72b165a4fbe55c%7Emv2.png"/>]]></description><dc:creator>published by Lowthers Chartered Accountants</dc:creator><link>https://www.lowthersaccountants.com/single-post/2018/08/15/Introducing-Genoapay</link><guid>https://www.lowthersaccountants.com/single-post/2018/08/15/Introducing-Genoapay</guid><pubDate>Wed, 15 Aug 2018 00:41:27 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/e9c845_9a593dbf1084470bae72b165a4fbe55c~mv2.png"/><div>Lowthers are happy to announce that we are now offering Genoapay. Pay your invoice over 10 weeks with no interest or fees. Get pre-approved today for up 10 $1000 at <a href="http://www.genoapay.com">www.genopay.com</a></div></div>]]></content:encoded></item><item><title>The Jedi Society Incorporated</title><description><![CDATA[The Jedi Society failed. Its mission was to register with Charities Services and qualify for tax exempt status. But the dark side of the force conspired against it and its application was denied.The Jedi Society promotes ‘Jediism’, which is defined in the Society’s purposes as the advancement and promotion of the Jedi, to be Guardians of the Peace and to enable understanding and knowledge of the Force. The Society explained to Charities Services that the universal belief of Jediism is a belief<img src="http://static.wixstatic.com/media/9db692c173054457a16879a1ffbc976c.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2016/02/17/The-Jedi-Society-Incorporated</link><guid>https://www.lowthersaccountants.com/single-post/2016/02/17/The-Jedi-Society-Incorporated</guid><pubDate>Wed, 17 Feb 2016 00:25:06 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/9db692c173054457a16879a1ffbc976c.jpg"/><div>The Jedi Society failed. Its mission was to register with Charities Services and qualify for tax exempt status. But the dark side of the force conspired against it and its application was denied.</div><div>The Jedi Society promotes ‘Jediism’, which is defined in the Society’s purposes as the advancement and promotion of the Jedi, to be Guardians of the Peace and to enable understanding and knowledge of the Force. The Society explained to Charities Services that the universal belief of Jediism is a belief in the ‘Force’ and that it “exists in every living thing, and binds everything together.”</div><div>The Charities Registration Board declined the application as they did not satisfy the requirement that it was established and maintained exclusively for charitable purposes. Specifically, Jediism was found to be insufficiently structured and not serious enough to advance religion. There was also insufficient evidence supporting the advancement of moral or spiritual improvement in a charitable manner.</div><div>Hence the Force, but not Charities Services, will be with them.</div></div>]]></content:encoded></item><item><title>Further cuts to ACC levies</title><description><![CDATA[ACC must collect sufficient funds to cover the costs of all current and past claims. In 1999 the Government realised funding was insufficient to cover on-going costs of pre-1999 claims and therefore, introduced a ‘residual levy’ to build up adequate funds. The residual levy has been incorporated into the work levy whereby, at present it comprises two components; (1) a current portion and (2) a residual portion. Each year, the current portion of the work levy is adjusted to reflect the most<img src="http://static.wixstatic.com/media/6b197c3df956442f98893a0302d80de4.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2016/02/17/Further-cuts-to-ACC-levies</link><guid>https://www.lowthersaccountants.com/single-post/2016/02/17/Further-cuts-to-ACC-levies</guid><pubDate>Wed, 17 Feb 2016 00:21:00 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/6b197c3df956442f98893a0302d80de4.jpg"/><div>ACC must collect sufficient funds to cover the costs of all current and past claims. In 1999 the Government realised funding was insufficient to cover on-going costs of pre-1999 claims and therefore, introduced a ‘residual levy’ to build up adequate funds.</div><div>The residual levy has been incorporated into the work levy whereby, at present it comprises two components; (1) a current portion and (2) a residual portion. Each year, the current portion of the work levy is adjusted to reflect the most recent injury experience within the business’s specific industry. The residual portion however, has been fixed since 2005 and is based on the remaining cost of pre-1999 claims.</div><div>Following a recent valuation of ongoing claims costs, the Government has proposed to remove residual levies in 2016/2017, which could result in 75% of businesses paying a reduced levy.</div><div>Once the residual levy is removed, work levies will be fully calculated on more recent injury trends and industries with increased injury rates will pay higher levies (and vice versa), i.e. those who operate in industries with higher injury costs.</div></div>]]></content:encoded></item><item><title>Fit staff / Fit business</title><description><![CDATA[Productivity, budgets, utilisation, cash flow and market penetration are all areas that most businesses focus on as they strive for improved performance and growth. However, many organisations are also exploring and implementing ‘healthy’ initiatives that provide the dual benefit of improving the health of their employees, and the business. Sick days and staff turnover There are many benefits to regular exercise. One in particular, is the effect that exercise has on the brain. Exercise<img src="http://static.wixstatic.com/media/00509eae7bc741a09b6bb69164d66bbf.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2016/02/17/Fit-staff-Fit-business</link><guid>https://www.lowthersaccountants.com/single-post/2016/02/17/Fit-staff-Fit-business</guid><pubDate>Wed, 17 Feb 2016 00:18:26 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/00509eae7bc741a09b6bb69164d66bbf.jpg"/><div>Productivity, budgets, utilisation, cash flow and market penetration are all areas that most businesses focus on as they strive for improved performance and growth. However, many organisations are also exploring and implementing ‘healthy’ initiatives that provide the dual benefit of improving the health of their employees, and the business.</div><div>Sick days and staff turnover</div><div>There are many benefits to regular exercise. One in particular, is the effect that exercise has on the brain. Exercise stimulates various brain chemicals that can leave you feeling happier and more relaxed, which can lead to improvements in diet and mental health. Take for example, an employee who has been for a run during their lunch hour. They are less likely to reach for an afternoon pick-me up, such as a chocolate bar at 3 o’clock, than an employee who has sat at their computer all day.</div><div>Regular physical exercise can help to prevent or control a wide range of health problems and concerns, which benefits not only the individual, but the organisation they work for as well. Healthy workers naturally take less sick days, and they are also more likely to remain in their job longer. According to a study by Towers Watson and the National Business Group on Health, voluntary resignations are lower at organisations with a highly effective wellness program (9%), compared to those whose programs are not as effective (14%).</div><div>Greater productivity and increased quality of work</div><div>Exercise has been proven to increase employee productivity at work and enhance the quality of their work because it increases employee stamina, concentration span and vitality. Researchers at Stockholm University demonstrated that devoting work time to physical activity can in fact lead to higher productivity. In a study that observed 180 dental staff over a 12 month period, they found that workers who spent 2.5 hours per week exercising had higher productivity compared to employees that did no exercise. The increase in productively was largely attributed to the increased stamina and less absenteeism caused by the increase in exercise.</div><div>Healthy workplace culture</div><div>It is also important to create a healthy workplace culture that complements any healthy workplace initiative. This culture should work to create a sense of core beliefs that promotes workplace health throughout the organisation. A healthy culture often starts at the top, when a good strong leader can inspire commitment and motivate their staff. Such a culture often attracts and retains motivated people that are committed to the business and its beliefs. By creating a sense of core beliefs that everyone in the organisation lives by and supports, a good leader can set expectations around how people treat each other, manage their work and deal with customers.</div><div>Investigating healthy initiatives for your business can be extremely worthwhile for both employees and the business. Employees usually feel happier and healthier meaning the business can benefit from greater productivity and increased employee engagement and retention. The potential gains a business can achieve from implementing healthy initiatives are worth exploring. Ideas to get started include team-building exercises, leadership training for senior managers, subsidised gym memberships or sports equipment, work based team sports, a “biggest loser” contest, encouraging lunchtime runs and arranging for external speakers, such as nutritionists, to speak on the premises.</div></div>]]></content:encoded></item><item><title>Doing your own Due Diligence</title><description><![CDATA[When purchasing a business it is important to understand its value. The value of a business will ultimately determine whether to purchase it and if so, how much to pay. A number of factors need to be considered when determining the value of a business, including; it’s financial position, future forecasts, existing customer relationships, staff structure and relationships, why the current owner is selling, your future exit strategy, and the list goes on. Ideally, advisors who specialise in<img src="http://static.wixstatic.com/media/8cd0b216d6dd4d52bd46d3afbb8cf020.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2016/02/17/Doing-your-own-Due-Diligence</link><guid>https://www.lowthersaccountants.com/single-post/2016/02/17/Doing-your-own-Due-Diligence</guid><pubDate>Wed, 17 Feb 2016 00:16:17 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/8cd0b216d6dd4d52bd46d3afbb8cf020.jpg"/><div>When purchasing a business it is important to understand its value. The value of a business will ultimately determine whether to purchase it and if so, how much to pay. A number of factors need to be considered when determining the value of a business, including; it’s financial position, future forecasts, existing customer relationships, staff structure and relationships, why the current owner is selling, your future exit strategy, and the list goes on.</div><div>Ideally, advisors who specialise in completing due diligence and financial analysis should be used. However, if that isn’t possible or if a ‘starting point’ is required before a specialist team is brought in, here are four key areas to focus on:</div><div>the reoccurring nature of revenue,the quality of earnings,what drives business growth, andthe business’s cash flow.</div><div>Understanding business revenue is integral to understanding the value of a business. A key question is therefore how is revenue secured going forward, i.e. how does the company retain their customer base? If business sales are generated by long-term contracts this will greatly increase the value of the business when compared to unsecured business sales that are retained by customer loyalty alone.</div><div>Further, if customer loyalty is attached directly to the existing business owner this can decrease the value of the business. Understanding what drives the business revenue provides a more in-depth understanding of the reoccurring nature of the revenue and what a new business owner will need to do to retain the same level of revenue.</div><div>Secondly, the quality of earnings must be examined. The earnings you use to value a business should be earnings that are maintainable into the future. Often within company accounts there are entries that distort a business’s true earnings. These can be one-off events that will not occur again in subsequent years such as a large cost or sale that is attributable to unusual circumstances. Staff and rent costs are often worth examining as it is common for these costs to not truly reflect their market price. All costs must be adjusted to market value to provide a fair reflection of profit.</div><div>Often, earnings will be forecast to grow into the future. If this is the case understanding what drives that growth is paramount. In order to analyse this it is useful to compare the historic accounts with the forecast accounts and analyse the key assumptions and key risks to achieve the growth. Assumptions should be realistic and the risks shouldn’t be understated.</div><div>Finally, the working capital requirements of a business should be examined. Every business has different cash flow requirements due to seasonal changes or supplier and customer relationships. Can future capital requirements be funded? Moreover, if the business is forecast to grow, what working capital is required to fund that growth?</div><div>Answers to the above questions will help determine whether the business is worth purchasing and might save some money when negotiating the price with the vendor.</div></div>]]></content:encoded></item><item><title>Changes to closely held company tax rules</title><description><![CDATA[In New Zealand, companies are often the preferred vehicle when setting up a new business. They are well understood, underpinned by well-functioning legislation, flexible, and liability is generally limited to the amount of a shareholder’s investment. However, the tax rules surrounding companies can be complex and not well suited to small businesses. In acknowledgement of this, the Look Through Company (LTC) regime exists to provide the corporate benefits described above, while ignoring the<img src="http://static.wixstatic.com/media/f2d6740da60ff8f7a1292dd305a1a4eb.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2016/02/17/Changes-to-closely-held-company-tax-rules</link><guid>https://www.lowthersaccountants.com/single-post/2016/02/17/Changes-to-closely-held-company-tax-rules</guid><pubDate>Wed, 17 Feb 2016 00:14:39 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/f2d6740da60ff8f7a1292dd305a1a4eb.jpg"/><div>In New Zealand, companies are often the preferred vehicle when setting up a new business. They are well understood, underpinned by well-functioning legislation, flexible, and liability is generally limited to the amount of a shareholder’s investment.</div><div>However, the tax rules surrounding companies can be complex and not well suited to small businesses. In acknowledgement of this, the Look Through Company (LTC) regime exists to provide the corporate benefits described above, while ignoring the corporate form for tax purposes. Instead, an LTC is treated as a partnership for tax purposes and profits or losses ‘flow through’ to the shareholders.</div><div>Unfortunately, the devil has been in the detail, as the LTC rules themselves are also complex resulting in few companies electing into the regime. The IRD have recognised this and released an Official Issues Paper that proposes to make the LTC rules more user-friendly. The paper also considers changes to the treatment of capital gains and dividends.</div><div>Proposed changes to the LTC rules</div><div>The major changes proposed to the LTC rules include:</div><div>Eliminating the requirement for most LTCs to complete the loss limitation calculation because it has limited practical application.Changes to the eligibility requirements to allow more than one class of shares (provided all shares have uniform entitlements to income and deductions).Tightening the entry requirements for LTCs with trust shareholders. For example, a beneficiary that has received a distribution in the last six years will be a ‘counted owner’.Excluding charities and Maori authorities from being shareholders in LTCs.Restricting the amount of foreign income earned to the greater of $10,000 or 20% of its gross income when more than 50% of the LTC’s shares are held by non-residents.Clarification of the debt remission income rules, including a change that should mean no debt remission income arises when an amount owed to a shareholder by an LTC is remitted.</div><div>Overall, it is debateable whether the proposed changes simplify the LTC regime or not.</div><div>Other initiatives</div><div>Generally, a company is able to distribute a capital gain tax-free when the company is liquidated. However, if a company makes a capital gain on the sale of an asset to an associated person, that gain is taxable on liquidation. It is pleasing to see that this rule may be relaxed to exclude sales to non-corporate purchasers and sales between companies that are 66% commonly owned.</div><div>Other simplification changes include removing the requirement for certain companies to withhold Resident Withholding Tax from fully imputed dividends and some interest payments.</div></div>]]></content:encoded></item><item><title>Property Management Promotion</title><description><![CDATA[If you need general advice on your investment property, Chris at Harper Properties will be happy to offer a FREE CONSULTATION AND RENT APPRAISAL to Lowthers Chartered Accountants clients. Sign on to their services and you will receive: FREE 12 MONTH COMPREHENSIVE RENT ARREARS/DAMAGE INSURANCE POLICY PLUS FIRST TWO MONTHS FEES FREE Contact Chris on 09-304-2386<img src="http://static.wixstatic.com/media/0d3456_e83221a527b644b68d99a23f5bed476c.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/06/22/Property-Management-Promotion</link><guid>https://www.lowthersaccountants.com/single-post/2015/06/22/Property-Management-Promotion</guid><pubDate>Mon, 22 Jun 2015 10:27:23 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/0d3456_e83221a527b644b68d99a23f5bed476c.jpg"/><div>If you need general advice on your investment property, Chris at Harper Properties will be happy to offer a FREE CONSULTATION AND RENT APPRAISAL to Lowthers Chartered Accountants clients.</div><div>Sign on to their services and you will receive:</div><div>FREE 12 MONTH COMPREHENSIVE RENT ARREARS/DAMAGE INSURANCE POLICYPLUS FIRST TWO MONTHS FEES FREE</div><div>Contact Chris on 09-304-2386</div></div>]]></content:encoded></item><item><title>Modernising New Zealand’s tax system</title><description><![CDATA[The Government has released two discussion papers to engage in public consultation on options for simplifying and modernising New Zealand’s tax system. The documents introduce taxpayers to the general direction the Government intends to take to improve administration of the tax system. Basically, the Government wants to simplify tax for individuals and businesses by reducing compliance costs, and making interactions with the IRD faster, more accurate and convenient with a greater use of<img src="http://static.wixstatic.com/media/b6c4dbe57f954018ab89dcbe0ea3e54d.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/05/15/Modernising-New-Zealand%E2%80%99s-tax-system</link><guid>https://www.lowthersaccountants.com/single-post/2015/05/15/Modernising-New-Zealand%E2%80%99s-tax-system</guid><pubDate>Fri, 15 May 2015 04:11:20 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/b6c4dbe57f954018ab89dcbe0ea3e54d.jpg"/><div>The Government has released two discussion papers to engage in public consultation on options for simplifying and modernising New Zealand’s tax system. The documents introduce taxpayers to the general direction the Government intends to take to improve administration of the tax system.</div><div>Basically, the Government wants to simplify tax for individuals and businesses by reducing compliance costs, and making interactions with the IRD faster, more accurate and convenient with a greater use of electronic and online processes. As the IRD puts it, “tax obligations should be easy to comply with and hard to get wrong”.</div><div>The first discussion paper ‘Making tax simpler – A Government green paper on tax administration’ outlines the overall direction of the tax administration modernisation programme. Key elements of potential change include:</div><div>Simplifying tax for businesses, for example by streamlining the collection of PAYE, GST and other withholding taxes and integrating these obligations into business processes. Options will be investigated for simplifying the calculation of provisional tax – with more emphasis on real time information, together with payment options that better reflect taxpayer’s cash flows.</div><div>Simplifying tax for individuals by providing online income tax statements for individuals pre-populated with income details, so that all that would be required is to ‘check and confirm’. Technology will be used more effectively to better manage both overpayments and underpayments of tax.</div><div>Social policy objectives would be met by using information that the IRD or the Government already holds, providing for timely payments on a more real-time basis, resulting in certainty for individuals and families. With faster, more accurate information, there should be less chance of people receiving too much and going into debt.</div><div>The IRD wants to make tax obligations part of the normal day-to-day business processes, making it quick, easy and harder to get things wrong.</div><div>Consultation closes on 29 May 2015.</div><div>The second discussion document ‘Making tax simpler - Better digital services’ outlines proposals for greater use of electronic and online processes. In particular the discussion document considers whether secure digital services can be delivered using the current policy and legislative framework and discusses options to move people to digital services, these include:</div><div>The IRD working with third parties such as banks and business software developers so that tax interactions are built into a customer’s regular transactions rather than managing tax separately at specific times of the year.</div><div>Non-digital services will need to be provided for those who still cannot use digital services.</div><div>A process would be developed for moving to a digital format those who could potentially use digital systems for some services - in circumstances where there would be wider benefits accrued.</div><div>Consultation closes on 15 May 2015.</div><div>These are the first two releases in a series of public consultations designed to modernise and simplify the tax system. Further discussion documents will be released over the next two years and public feedback is requested.</div><div>The significance of this process can’t be overstated. In an age where changes in lifestyle as a result of technology have moved at an explosive rate, the design, administration and technology associated with our tax system have not kept up.</div></div>]]></content:encoded></item><item><title>Holding a parent company liable for the debts of its subsidiary</title><description><![CDATA[A recent High Court decision, Lewis Holdings Ltd v Steel & Tube Holdings Ltd (2014), demonstrates that structuring a business or entering into new business ventures through separate companies to ring fence risk may not always be as effective as people think. The case involved a property that had been leased by Lewis Holding Limited (Lewis) to Stube Industries Limited (Stube). Stube is a subsidiary of Steel & Tube Holding Limited (STH). In 2013, Stube was placed into liquidation and Lewis filed a<img src="http://static.wixstatic.com/media/f49ac1ee56d5da2f59a0d9ba5218b9cc.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/05/15/Holding-a-parent-company-liable-for-the-debts-of-its-subsidiary</link><guid>https://www.lowthersaccountants.com/single-post/2015/05/15/Holding-a-parent-company-liable-for-the-debts-of-its-subsidiary</guid><pubDate>Fri, 15 May 2015 04:06:38 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/f49ac1ee56d5da2f59a0d9ba5218b9cc.jpg"/><div>A recent High Court decision, Lewis Holdings Ltd v Steel &amp; Tube Holdings Ltd (2014), demonstrates that structuring a business or entering into new business ventures through separate companies to ring fence risk may not always be as effective as people think.</div><div>The case involved a property that had been leased by Lewis Holding Limited (Lewis) to Stube Industries Limited (Stube). Stube is a subsidiary of Steel &amp; Tube Holding Limited (STH). In 2013, Stube was placed into liquidation and Lewis filed a claim against Stube for debts owed under the lease agreement. However, under a rarely utilised provision of the Companies Act, the liquidator sought an order requiring STH to pay Stube’s debts. The provision looks at to what extent a company took part in the management of, and is responsible for the company being placed in liquidation.</div><div>The High Court decided in favour of Lewis, requiring STH to pay the full amount claimed by Lewis, i.e. a parent company was held liable for the debts of its subsidiary. The Court based its decision on the following key findings:</div><div>The CEO and CFO of STH were directors of Stube and did not approach their duties as directors in a way that recognised Stube as a separate legal entity.</div><div>The STH group of companies acted as a single unit. Stube was more akin to a division of that unit, for example, their financial affairs were intertwined and Stube had no separate bank account.</div><div>STH treated the lease as their own and made lease payments to Lewis. This provided Lewis with the impression that Stube was not treated as a separate legal entity by STH.</div><div>Stube had no employees, but used STH’s employees to conduct business. This supply of services was not reflected in a written agreement, and no intercompany charge occurred.</div><div>Stube did not obtain independent advice when entering major transactions.</div><div>Stube’s fate was sealed when STH stopped financially supporting it.</div><div>The decision flags the need to take a best practice approach when operating what is essentially a single business across multiple companies, which is extremely common in New Zealand.</div><div>The decision is to be appealed and the final outcome might change. But regardless of the outcome, it won’t change the need to take a best practice approach.</div></div>]]></content:encoded></item><item><title>New Tax Bill</title><description><![CDATA[On 26 February 2015, the Government introduced the Taxation (Annual Rates for 2015 – 16, Research and Development, and Remedial Matters) Bill (the Bill). It is the first sizeable bill to introduce amendments to the tax rules since November 2013. The Bill contains changes intended to address tax impediments to research and development (R&D) and innovation, and to clarify goods and services tax (GST) rules for body corporates. This article provides a brief summary of the key changes proposed by<img src="http://static.wixstatic.com/media/872746b89cfd4dc081f2c074713c7e0c.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/05/15/New-Tax-Bill</link><guid>https://www.lowthersaccountants.com/single-post/2015/05/15/New-Tax-Bill</guid><pubDate>Fri, 15 May 2015 04:01:08 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/872746b89cfd4dc081f2c074713c7e0c.jpg"/><div>On 26 February 2015, the Government introduced the Taxation (Annual Rates for 2015 – 16, Research and Development, and Remedial Matters) Bill (the Bill). It is the first sizeable bill to introduce amendments to the tax rules since November 2013. The Bill contains changes intended to address tax impediments to research and development (R&amp;D) and innovation, and to clarify goods and services tax (GST) rules for body corporates.</div><div>This article provides a brief summary of the key changes proposed by the Bill.</div><div>R&amp;D tax losses</div><div>The Bill includes legislation to allow tax loss-making R&amp;D companies to &quot;cash out&quot; their tax losses from R&amp;D expenditure. The main eligibility requirements are that the company must be a loss-making company resident in New Zealand, with a sufficient proportion of expenditure on R&amp;D. Companies that qualify will be able to receive 28% (the current company tax rate) of their qualifying expenditure as a cash refund from IRD, capped at $140,000 for the 2015 – 16 year. The threshold increases by $84,000 per year, over the next five years to $560,000.</div><div>Black hole expenditure and intangible assets</div><div>The Bill amends the rules relating to &quot;black hole expenditure&quot; (business expenditure that is not immediately deductible for income tax purposes and cannot be deducted over time as depreciation). The proposals are targeted primarily at black hole R&amp;D expenditure.</div><div>There are a number of anomalies under the current rules which are to be fixed. Intangible assets are generally able to be amortised if they have a defined useful life (such as a patent). If costs are incurred to develop an asset with no defined life (such as a trademark) and that asset is written off, no tax deduction is available. In this situation a tax deduction is to be allowed.</div><div>Also, there is some uncertainty around what costs can be included when amortising intangible assets, e.g. a patent versus the underlying knowledge covered by the patent. The rules will be amended to extend an asset’s “cost” to include the underlying item of depreciable intangible property.</div><div>The list of intangible property that is able to be amortised will be amended to include a design registration, a design registration application and a copyright in an artistic work that has been applied industrially.</div><div>GST and bodies corporate</div><div>There has been considerable uncertainty and media coverage in recent years regarding the GST position of bodies corporate. The Bill proposes to clarify the situation by amending the GST rules to reflect that a service provided by a body corporate to a member is a supply that is subject to GST. However, those supplies are excluded when determining whether the total value of the supplies made by a body corporate exceeds the compulsory GST registration threshold. This effectively gives bodies corporate the option of registering for GST. There are a number of rules being introduced to ensure the rules aren’t ‘gamed’ or taken advantage of – these should be examined in detail before a position is taken.</div></div>]]></content:encoded></item><item><title>Health &amp; Safety reform</title><description><![CDATA[Each year on average, 75 people die on the job and 1 in 10 people are injured at work. With statistics this high, it’s not surprising the Government is reforming New Zealand’s health and safety landscape. A new Health and Safety Reform Bill (the Bill) is currently before Parliament and is expected to pass later this year. The Bill will create the new Health and Safety at Work Act, replacing the Health and Safety in Employment Act 1992 and aims to reduce workplace injury and death tolls by 25 per<img src="http://static.wixstatic.com/media/144e6293cf6b4e2ba91facbc3edda0de.jpg"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/05/15/Health-Safety-reform</link><guid>https://www.lowthersaccountants.com/single-post/2015/05/15/Health-Safety-reform</guid><pubDate>Fri, 15 May 2015 03:53:26 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/144e6293cf6b4e2ba91facbc3edda0de.jpg"/><div>Each year on average, 75 people die on the job and 1 in 10 people are injured at work. With statistics this high, it’s not surprising the Government is reforming New Zealand’s health and safety landscape.</div><div>A new Health and Safety Reform Bill (the Bill) is currently before Parliament and is expected to pass later this year. The Bill will create the new Health and Safety at Work Act, replacing the Health and Safety in Employment Act 1992 and aims to reduce workplace injury and death tolls by 25 per cent by 2020. The Bill introduces changes to the allocation of health and safety duties in the workplace and increases the compliance and enforcement tools available to inspectors.</div><div>Under the current legislation, there is a primary focus on the employer and employee roles and duties are carefully placed on defined participants (such as employers, principals, the self-employed etc).</div><div>The new Bill introduces the concept of a ‘Person Conducting a Business or Undertaking’ (PCBU), which replaces the previous duty holders. The PCBU will be allocated primary duties of care with regards to health and safety at work where they are in the best position to control risks to work health and safety.</div><div>The primary duty of care requires all PCBUs to ensure, so far as is reasonably practicable:</div><div>the health and safety of workers employed or engaged or caused to be employed or engaged, by the PCBU or those workers who are influenced or directed by the PCBU (for example, workers and contractors), and</div><div>that the health and safety of other people is not put at risk from work carried out as part of the conduct of the business or undertaking (for example visitors and customers).</div><div>This means that PCBUs will need to think broadly about who they affect through the conduct of their business or undertaking, rather than just direct employees or contractors. Where there are overlapping health and safety duties (such as multiple contractors on a building site), each PCBU has a duty to consult and co-operate with the other PCBUs to ensure health and safety matters are managed.</div><div>A new duty proposed under the Bill is that an ‘officer’ of a PCBU (such as a company director or partner), must exercise due diligence to ensure that the PCBU complies with its duties. This places a responsibility on people at the governance level of an organisation to actively engage in health and safety matters, reinforcing that health and safety is everyone’s responsibility.</div><div>Workers also have specific health and safety duties at work and the Bill defines the duties they owe and are owed (for example, a duty to take reasonable care of their own health and safety). The Bill will also apply to volunteers in certain circumstances.</div><div>The Bill provides a wider range of enforcement tools for inspectors and for increased penalties for infringements. There will be three types of offences for a breach of a health and safety duty and a breach will be graded based on the conduct of the duty holders and the outcome of the breach. For example, a person may be jailed for up to five years if they have a health and safety duty and, without reasonable excuse, are reckless and engage in conduct that exposes a person to a risk of death or serious injury or illness. A body corporate in a similar position may be fined up to $3 million.</div><div>There will be several months between when the Bill is passed and when it comes into force to give people time to prepare for the new regime.</div></div>]]></content:encoded></item><item><title>Summary of IRD rates</title><description><![CDATA[USE-OF-MONEY INTEREST- the rates on underpaid and overpaid tax rose on 8 May 2015. The interest rate charged on underpaid tax went from 8.40% to 9.21%, and the rate for overpaid tax rose from 1.75% to 2.63%. This movement aims to align the rates with the market interest rates and were last updated in May 2012. ACC EARNERS LEVY RATE - the ACC earners levy rate for the 31 March 2016 year is 1.45%, the same rate as last year. For employees, the maximum earnings on which the levy is payable is]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/05/15/Summary-of-IRD-rates</link><guid>https://www.lowthersaccountants.com/single-post/2015/05/15/Summary-of-IRD-rates</guid><pubDate>Fri, 15 May 2015 03:50:04 +0000</pubDate><content:encoded><![CDATA[<div><div>USE-OF-MONEY INTEREST- the rates on underpaid and overpaid tax rose on 8 May 2015. The interest rate charged on underpaid tax went from 8.40% to 9.21%, and the rate for overpaid tax rose from 1.75% to 2.63%. This movement aims to align the rates with the market interest rates and were last updated in May 2012.</div><div>ACC EARNERS LEVY RATE - the ACC earners levy rate for the 31 March 2016 year is 1.45%, the same rate as last year. For employees, the maximum earnings on which the levy is payable is $120,070.</div><div>FBT RATE FOR LOW INTEREST LOANS - the last notified prescribed rate of interest used to calculate fringe benefit tax on low-interest employment-related loans was 6.70% for the period 1 October 2014 to 31 December 2014. This was up from the previous rate of 6.13%.</div><div>PERSONAL MARGINAL TAX RATES - no changes are proposed to the income tax rates for individuals for the 2016 tax year. The lowest marginal tax rate is 10.5% for taxable income up to $14,000, then 17.5% up to $48,000, 30% to $70,000 and the top rate is 33% on income over $70,000.</div></div>]]></content:encoded></item><item><title>Pan tax</title><description><![CDATA[Of all the weird and wonderful taxes imposed around the world, it was surprising to find one in our own back yard. New Plymouth sports clubs pay tax on the number of toilets they have. This ‘pan tax’ is imposed by the council and is effectively a sewer charge. The problem is that sport clubs have limited cash flow and are struggling to meet their liability. According to media reports, the pan tax is often one of the biggest expenses incurred by clubs, and members believe it is not a fair<img src="http://static.wixstatic.com/media/0d3456_3164dbc770b141feb1557d82aa8d4b06.png"/>]]></description><dc:creator>published by Lowthers Chartered Accountants | Auckland | Tauranga | Christchurch</dc:creator><link>https://www.lowthersaccountants.com/single-post/2015/05/15/Pan-tax</link><guid>https://www.lowthersaccountants.com/single-post/2015/05/15/Pan-tax</guid><pubDate>Fri, 15 May 2015 03:44:23 +0000</pubDate><content:encoded><![CDATA[<div><img src="http://static.wixstatic.com/media/0d3456_3164dbc770b141feb1557d82aa8d4b06.png"/><div>Of all the weird and wonderful taxes imposed around the world, it was surprising to find one in our own back yard. New Plymouth sports clubs pay tax on the number of toilets they have. This ‘pan tax’ is imposed by the council and is effectively a sewer charge.</div><div>The problem is that sport clubs have limited cash flow and are struggling to meet their liability. According to media reports, the pan tax is often one of the biggest expenses incurred by clubs, and members believe it is not a fair expense. &quot;People already pay pan tax at home. It doesn't matter if you are going at home or at the club, you've already paid for it&quot; said a local club member.</div><div>Club calls to flush this tax down the drain have resulted in the Council reviewing the tax in their latest public consultation document</div></div>]]></content:encoded></item></channel></rss>