100% Deductible Expenses (Pub: 5 Feb 2008)
The cost of meals while travelling on business is fully deductible. However, there are some exceptions. For example, the cost of meals you provide to a business contact, and meals at a party or other social function during travel, is only 50% deductible. The cost of meals for the staff member entertaining the business contact is also 50% deductible.
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A SIMPLE Comment on the Budget 2010 (Pub: 9 Sep 2010)
The second National Party Budget was released on 21 May 2010. Much had been said about what it would contain, and it was expected that the rate of GST would rise - which indeed came to pass. But what else was offered, and how will it affect our businesses?
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BALANCE SHEET MADE EASY (Pub: 11 Feb 2008)
TTBE have received several inquiries about balance sheets from customers who have difficulty reading them. So here is a simple and straightforward article for those of you who are not familiar with company financials.
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Financial Statement Analysis (Pub: 11 Feb 2008)
There are 5 key areas to examine in a business (aside from matters such as good management, proprietary assets, and favourable economic conditions, etc) when looking at financial statements and these are addressed separately below:
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Inland Revenue Confirms Stand on Depreciation (Pub: 10 Dec 2007)
Inland Revenue advises that it considers it is unacceptable for residential rental property owners to break up their properties into smaller components in order to get higher depreciation rates for tax purposes.
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IRD Providing Smarter Online Services (Pub: 14 Sep 2009)
IRD have introduced new online tools for businesses. Two new products were launched on their website in May and IRD is encouraging tax agents to promote these tools to staff and their small and medium enterprise (SME) clients. However, these tools are useful to any business.
The two interactive products designed to help new businesses understand business taxes are the:
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Provisions – Why Have Them? (Pub: 13 Feb 2008)
Provisions are amounts retained on the balance sheet (and thus generally budgeted into the cashflow) to allow for a future expenditure. This may be by way of the renewal of assets or to allow for a future fine that may be imposed on the company for a known non-compliance, etc. A provision is an allowance for a cost that cannot be determined with any substantial accuracy.
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Record Keeping and the IRD (Pub: 14 Sep 2009)
IRD requires that business records be kept for 7 years. Bear in mind that some online bank statements do not show a running total, and a running total is necessary. Also beware of
keeping records online if the programme you use may not allow access 7 years from now. It’s a good idea to PDF everything if you do all filing digitally.
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Residential Rental Properties and Depreciation of Items (Pub: 9 Sep 2010)
After several years of discussion and debate the IRD has released its ruling on depreciation and removes taxpayer discretion.
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Retention of Records (Pub: 11 Dec 2007)
Many businesses will fail the test for appropriate retention of records. We discuss in some detail your obligations with respect to retaining business records and in doing so we have extracted relevant clauses from IRD (GNL-430).
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Some commonly used accounting terms (Pub: 11 Feb 2008)
ACCRUAL BASIS OF ACCOUNTING
The process of recognising revenue when it is earned and not when it is received. Expenses are recognised when they are owed and not when you pay them
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Tax Traps in Subdivisions (Pub: 3 Jun 2009)
There are a number of situations in which the profits received upon resale of land may be deemed to form part of the land owner’s income and so be subject to tax. These include the
following:
• land acquired partially with the intention of on-selling it
• land sold by a land dealer, land developer, sub divider or builder
• land which is developed or subdivided within 10 years of the date on which it was acquired
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Understanding How to Bookkeep Assets (Pub: 12 Feb 2008)
Many of our clients in small businesses do not understand the implications of purchasing assets and how to manage their books accordingly. Assets can either be expensed or capitalised and both have their advantages. However, there is a legal obligation to capitalise any assets purchase at a cost exceeding $200.00 plus GST.
Certain rules relate to this, however, and you need to know these in order to avoid tax evasion:
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Year End Checklist (Pub: 16 Mar 2009)
ACC LEVY
ACC is deductible in the year in which it is due and payable. This means that if you pay the ACC invoice dated April 2009 (due after year-end), it cannot be deducted in the March 2009 financial year, even if the expense relates to that period.
ACCOUNT BALANCES & ACCRUALS
On 31 March 2009 at close of business you will need the following (snapshots):
• A list of outstanding debtors and amounts owed to you by each one (debtors ledger)
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