Our office will be closed from 4pm on Friday 20th December, and will be open again with our normal business hours from Friday 17th January 2014.
Should you have an urgent enquiry please contact Glenn Morris on
0274 500 831 and he will endeavour to contact you as soon as possible.
Alternatively, you can leave a message on our answer phone or email us at firstname.lastname@example.org and we will have the appropriate team member contact you when we re-open.
We look forward to working with you in 2014.
The Team at Searells
The new rules mean that the longer you have been in New Zealand, the more tax you have to pay when you withdraw a lump sum, or transfer your pension to New Zealand.
There is a special concession for anyone transferring their pension to New Zealand prior to 1 April 2014, where you can elect to declare just 15% of the transfer value as income.
If you have been in New Zealand for seven years or more, you may wish to look at transferring your pension now. If the transfer is done after 1 April 2014, the percentage of the transfer that will be included as income in your tax return will be greater than 15%.
If you think this applies to you please contact us and we can advise you on your options.
This change will affect those of you on the Medium Plan with the price increasing
from $49 to $50/month.
For more information on the Xero pricing structure click here!
One of the most difficult decisions to make as a business owner is how much to charge for your products. There is often a reluctance to review pricing because of the fear of upsetting existing customers or due to a lack of time. However, there are a number of actions you can take to make your pricing process smoother and more robust, ensuring that your pricing is correct for you and your customers. The following framework provides practical instructions on how to review your pricing.
- Refer back to your business plan to confirm how you were planning to position your products in the market, and whether your current pricing is consistent with that plan. If you don’t have a business plan, create one.
- Consider what you’re trying to accomplish with your pricing. Pricing can send a direct message to your customers regarding who you are as a business and the type of products you offer. For example:
- Customers can assume, rightly or wrongly, that more expensive products are better quality than cheaper alternatives,
- Customers also tend to resist products they see as too highly priced; however, they also resist cheaply priced products because they assume they are low quality.
- Consider how prices will affect demand and seek active feedback from your customers, including how they value your products.
- Consider the needs of customers and the value they place on your products. This can be a major pit-fall in pricing because customers may be willing to pay more than you realise. Customers who are unhappy with pricing on the other hand will generally let a business know how they feel, or they just won’t purchase the products.
- Consider your competitor’s pricing and any perceived or real difference in value provided. This is to ensure that the business is making as much as it can and also that you are not being priced out of a market.
- Consult with a business advisor. They will have a wider understanding of what is happening in the marketplace and can help guide you through pricing decisions.
- As a general rule you should review your pricing at least annually. This is to ensure that pricing is still consistent with industry best practice and that you are getting all that you can out of your business.
The reality is that incorrect pricing can seriously undermine business performance. In a changing business landscape customer’s ideas on value can change rapidly. Businesses therefore have to be more responsive and proactive in their pricing to ensure that products are priced appropriately.
In an effort to reduce uncertainty regarding the tax treatment of employee reimbursements and payments for meals, accommodation, communication and clothing, the IRD released an officials’ issues paper in November 2012. The IRD is seeking feedback on proposals to introduce legislation specifically pertaining to these types of expenditure.
- Employee meal costs when travelling for work - tax-free if duration of travel to a given location is less than three months, otherwise taxable in full for longer trips,
- Meal expenses (not during travel for work) - tax-free provided payments are not made on a regular basis or as a reward for employee services.
- Cost of employee accommodation when travelling for work - tax-free if duration of work travel to a particular work location is less than 12 months, with a discretion for travel in excess of 12 months in exceptional circumstances - taxable in full for longer trips,
- Cost of accommodation provided as part of employment, e.g. farmhouse - No change - the market value of accommodation to be treated as taxable,
- Employees who work from home - No change - market value of accommodation is taxable,
- Cost of accommodation (more than one permanent workplace) - Factual assessment of the principal place of work to be performed i.e. based on time spent. Accommodation payments for the second workplace may be tax-exempt,
- Cost of accommodation (employees seconded overseas) - Treat as taxable up to the market value of equivalent accommodation in NZ, e.g. a similar property with the same number of bedrooms.
- Payment for employee’s communication costs (including telephone and internet) - Taxable in full except where the private/work portion is able to be separately identified.
- Cost of clothing for employees - Taxable unless the clothing is necessary and peculiar to the employee's occupation e.g. uniforms, protective or specialist clothing.
On a related topic, in December 2012 the IRD released a statement (CS 12/01) that has caused some concern. The statement outlines the IRD’s view on accommodation allowances and accommodation provided to an employee on secondment when that employee continues to maintain a home in their original location. In this situation it is accepted practice for such expenditure to be treated as non-taxable to the employee. This treatment and its approval by the IRD dates back to the now expired (in 1998) Technical Rulings Manual, which included the following statement:
18.104.22.168 Exemption - Cases will arise where an employee is required to live away from his/her normal place of residence. He/she is required to maintain the normal place of residence for the family while working away from home. In these cases, there will be no benefit in respect of the accommodation supplied by the employer as the cost of maintaining the family home will offset any benefit received. The value of the accommodation supplied will not be taxed.
In contradiction to its own historical commentary, the IRD have now advised:
- Where an employer provides accommodation or an accommodation allowance, the amount is taxable and subject to PAYE,
- When accommodation payments have been made by the employer for expenditure incurred by the employee the amount is taxable and subject to PAYE,
- Accommodation for overnight and short-term stays by an employee in another location is not taxable.
The statement has been poorly received as the IRD’s view is arguable, however due to the lack of technical analysis provided, it is difficult to confirm how the IRD has reached its view. The IRD have advised that taxpayers should make a voluntary disclosure if they have not treated amounts correctly. For this purpose the statement should be referred to as the period of reassessment, and application of interest and penalties will vary depending on the facts.
Source: Accountants Client Newsletter, Issue 1: February 2013 - April 2013
Having grown up in the ‘good times’ between recessions, the millennial worker has little loyalty toward an employer and this contrasts markedly with the Baby Boomer generation and to a lesser degree with Generation X. The millennial worker will have a preference to work for more than five employers over their career and it is expected that this number of employers will only increase as current economic difficulties ease and more job opportunities become available.
Recent generations have placed increasingly greater significance on a good education, so it is not surprising that employers who provide opportunities for greater personal learning and development will fare better in attracting and retaining a millennial worker.
As you might expect, the millennial generation is the most technologically savvy generation and so they are interested in working for employers who also share their love of technology. The challenge for any employer in this respect is that a millennial worker will want to communicate using technology and this is likely to cause friction with the Baby Boomers and Generation X who generally prefer to meet for discussion.
This new generation of workers also has a strong appreciation for lifestyle, and the opportunity to relax away from work will be even more appreciated under the current economic difficulties.
Career progression within a reputable business is also high on their list of employment motivators and is surprisingly slightly more important to them than a competitive salary.
We also know that in a global economy, the opportunity to travel and work will be a strong attraction to working for an employer. This preference will continue to be a drain on New Zealand’s workforce.
Finally, the ‘millennials’ will value the opportunity to be mentored by the older generation so the challenge of managing the generation gap will continue to exist as it has done for previous generations.
In summary, here are some key points to assist employers with managing the generation newest to the workforce:
• Ensure your policies and practices enable you to communicate effectively,
• Assess the degree of flexibility that you are able to give employees in a job and align the practices of the business to match. The more flexibility you are able to offer, the better,
• Develop career plans that interest these employees in your business and focus on developing the skills the business needs in the future,
• Consider development opportunities that extend the skills of these workers, what are sometimes referred to as ‘stretch’ assignments are where individuals learn the most,
• Review the range of employment benefits on offer to attract and retain these employees,
• Provide mentoring opportunities to share the experience of older generations.
It's been two weeks since we moved into our new offices at 433 St Asaph Street and it's great to be back in appropriate offices. In fact, we're enjoying it so much here we wanted to share a few more photos with you! Check out our facebook page to see them all.
Thank you for all the positive feedback we've received and we look forward to seeing you again soon.
Check out our facebook page to see some photos of our new office and our journey to get to this point.
We'd also like to make a special mention to the team at Redpaths. Thank you for hosting us through the turmoil of the past year. We are truly grateful for all of your help and understanding during this time.
While you may be unable to reduce this excess we urge you to fully read your renewal documents and be aware of any potential exposure.
Source: Searells Business Improvement & Chartered Accountants
The good news is that we a secured a premise in late 2011 and we have now fast tracked the refurbishment and are aiming to be up and running by late February - we will update you on this closer to the time!
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