News

There has been a perception amongst some commentators that with the abolition of gift duty, the need to have annual trustee meetings for a trust is no longer important.

Nothing could be further from the truth as the regime post gift duty and the current Law Commission Review of the Law of Trusts has, in our view, increased the need for trusts to be properly established and managed.

Good record keeping is essential. Where we prepare annual financial statements for the Trust, we also prepare Annual Minutes.

Those Trusts that only own the family home and have recently obtained an IRD number, should seriously consider having an annual meeting of Trustees and preparing annual minutes.

To talk to one of our experts please don’t hesitate to contact us.

Given the importance of keeping your PAYE and GST record-keeping and payments in order, it might be tempting to think that Fringe Benefit Tax, or FBT, is a relatively minor thing. But don’t be fooled. In 2017, Inland Revenue created a dedicated audit team to focus on this issue.

One of the team’s aims is to ensure employers have the right business structures and documentation in place. And it turns out that many don’t.

If this sounds like you, now’s a good time to put things right. Regardless of whether you’re acting correctly or not around FBT, a lack of proper records leaves you in a weak position and liable to negotiated settlements (that is, having to pay more than you expected) or, worse, serious penalties.

Most FBT revolves around company vehicles, so let’s look at what IRD expect from you if you provide one to any of your staff:

• The employee’s job description and employment contract
• The company policy on motor vehicles
• Any private use restriction letter in place, signed by the Directors and the employee
• Documentation that shows regular checks on the vehicle to ensure it’s not being used for private matters
• The employee’s performance review notes confirming they’re sticking to company policies.

FBT…so, what can you do?

For an SME owner, that’s quite a daunting list, and a good reason to talk to your accountant. An expert, independent set of eyes will help you determine what you need to do in all cases, what you don’t need to do, and also how to go about doing it (including creating proper documentation).

The value of expert advice is heightened by some of the finer points of FBT legislation. For example, did you know that if an employee takes a vehicle home one evening and returns to work with it the next morning, the laws says it’s been available for private use on two days?

Did you know that IRD expects you to check that employees are adhering to restricted use policies at least once every quarter?

Did you know that just because a vehicle has your company logo on it, that doesn’t automatically make it a work-related vehicle, which then means it doesn’t automatically become exempt from the usual requirements of FBT?

Did you know there is also a new option for some companies that have one or two vehicles to elect to use the motor vehicle expenditure rules rather than pay FBT in certain circumstances?

If you didn’t know all those things, take a bow – you’re in great company! FBT is complex, to say the least.

The good news is that IRD also recognises this and will work closely with you to help you comply. The best approach is to get professional advice (that’s us) and, where appropriate, go to IRD for a written opinion on any matters that aren’t crystal clear. That way, even if IRD disagrees with your FBT return, they’ll see that you’ve taken reasonable care to get things right and may not impose penalties.

So, when are you liable for FBT?

Any time you provide non-cash benefits to your staff – which means the list is potentially endless. In practice, however, most non-cash benefits fall into one of these categories:

• Insurance premiums
• Motor vehicles
• Subsidised transport
• Staff vouchers
• Offsite carparks

Contact us today with any question you have regarding FBT – we’ll be very happy to help.

Johnston Associates South is a progressive three partner CA firm that has an impressive reputation in the market for the quality of our business advisory, and professional accounting services in the Nelson, and Marlborough regions. Our firm offers leading technical expertise in a number of areas, including financial accounting, management reporting, tax, management consulting, and advisory.

We work with a wide range of clients across industries such as aquaculture, manufacturing, construction, agriculture, horticulture, viticulture, forestry, retail, property development, and hospitality to name just a few.

We have a great opportunity for a bright individual to join our Compliance team in Nelson, Richmond or Blenheim. We seek a Senior Accountant with a depth of experience and an understanding of the complexity of finance operations, reporting requirements, and best practice around systems, controls, maintenance and configuration.

Your strong relationship management skills will compliment your ability to interpret business needs and your customer service approach will enable you to provide the appropriate level of business support, financial modelling, and reporting that our clients require.

This is a multifaceted role which will suit a candidate with strong hands-on financial ability, along with commercial nous to work within an environment which is busy, and yet has a youthful energy about it.

Ideally, you will have:
– The ability to communicate and liaise effectively across the organisation, and with clients.
– A solid and proven background in the core accounting roles.
– A commercial understanding around systems, inventory, cost control, budgeting, forecasting, and reporting.
– Excellent system skills with the ability to interpret data quickly and efficiently.
– A mind for numbers and the ability to translate numbers well for nonfinancial stakeholders
– The ability to manage multiple projects and work effectively to deadlines
– A strong customer focus and be known for your ability to build & maintain effective relationships.
– Attention to detail.
– Self-motivated and enjoy working as a team.
– Thrive on quality and success.
– Experience with a number of accounting systems such as CCH iFirm, MYOB, AO, Banklink and Xero is advantageous but not essential as full training will be given to the suitable candidate.

What you need:
– 5+ years of BAS experience in a New Zealand CA environment.
– Excellent verbal and written skills, and the ability to liaise with a range of clients.

This role offers a competitive salary for the right candidate as well as ongoing professional development, and external training courses. We are an ATE and will support your professional development through in-house and external training.

To register your interest and to find out more about this opportunity, please contact Ben Halliday: bhalliday@jacal.co.nz

Leading Accounting and Business Advisory firm Johnston Associates South is pleased to announce the appointment of Mark Davies as our Director of Tax, firmly positioning the firm as the region’s leading tax advisers.

Mark brings over 28 years specialist tax experience to our team, starting his career with IRD before moving into roles as a tax specialist for Big Four and regional firms. His experience is broad, covering numerous areas but more recently Mark has focussed on advising family businesses of all shapes and sizes, taxation of migrants and new residents, primary industries, and managing IRD disputes.

“I’m excited to join the Johnston Associates South team and focus on delivering high-quality tax solutions to clients, and extending our service availability to all of our region’s businesses. We believe the tax team we have created is able to provide a level of genuinely local expertise and service not available elsewhere in our region – that’s really exciting in terms of the benefits we can provide to our clients. Combined with Johnston Associates South’s proven expertise around accounting and business development we are in a very strong position for the future”.

Mark joins Katrina Scorrar and Kelvin Scoble on the Johnston Associates South tax team.

Johnston Associates South celebrates its 10th anniversary this year and is proud to be the fastest growing accountancy and business advisory firm in the Top of the South with offices in Nelson, Blenheim and Havelock.

Money laundering is big business in New Zealand. Every year $1.35 billion of fraud and drug-related money is laundered through seemingly legitimate businesses. In response, the Government introduced specific Anti-Money Laundering and Countering Financing of Terrorism legislation to address this risk.

Previously, only a few types of organisation had to comply with the legislation. Following amendments to this legislation passed last year, it is now confirmed that this legislation extends to these groups taking effect from these dates (or earlier if the Government legislates by an Order in Council):

1 July 2018: lawyers, conveyancers and businesses that provide trust and company services
1 October 2018: accountants who provide particular kinds of business services
1 January 2019: real estate agents
1 August 2019: businesses trading in high-value goods, sports and racing betting

If you are in any of these categories, of course you must make sure that your business complies. We can point you in the right direction. But please also note that as your accountant we are in one of the categories that must comply with the changes. And to do this, be aware that we will sometimes need to ask you for more information than we have in the past. This is because we need to be able to document that we have verified your ID and both you and your business entities are all above board.

For more information don’t hesitate to contact us.