CALL US: 03 374 9393

 Welcome to the Accounting Solutions Blog


The Minister of Revenue announced that a Supplementary Order Paper to the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Bill has been introduced to extend the bright-line period from 2 to 5 years.


What does that mean for you?


If you are thinking of selling land/property, other than your family home, and have owned this less than 5 years it's likely that you will fall under the bright-line period and be subjected to capital gains tax but you have a small window of opportunity between now and when the Bill becomes an Act (Royal Assent) to sell your property without incurring the capital gains tax (as long as you've owned it for more than 2 years).

This is important for anyone considering selling property (other than the family home) over the next 5 years, please feel free to ring us to discuss your situation. 


We think this is a well written article which may be of interest to you. A few organisations have written about these topics but we found that this one is the easiest to understand.


• Paid Parental leave extended
• Minimum wage increases
• Equal Pay
• Introducing statutory redundancy compensation.
• Contractors getting increased rights
• Changes to Trail Periods
• Collective Bargaining
• Reinstatement
• Increased scope for minimum standards.
• Fair pay agreements

For more information on these topics and the full article click here

Just a reminder to watch out for any Xero requests for paying bills and to look closely at what email address they are coming from. The phishing scam is still going around.

Here's the link for more information:

Warmest Regards,
Louise Neville
Director, Chartered Accountant

Tenants Must Be Informed of Insulation Status

It's been compulsory since 1 July last year for any new tenancy agreement to include an Insulation Statement. That means landlords must record if rentals have insulation, where it is, the type of insulation and its condition. That allows tenants or potential tenants to make more informed decisions about renting.

Insulating Rentals is now mandatory!

On top of that, if you have a rental property without floor and/or ceiling insulation, you have until 1 July 2019 to install it. If you don't have an Insulation Statement, or your property remains uninsulated from 1 July 2019, you can be fined up to $4000.

The insulation requirements don't apply to in-ground concrete floors and integral ceilings-floors in a multi-storey dwelling.

Note that it's illegal to install or repair electrically conductive insulation, known as foil insulation, in any residence. A breach could cost you up to $200,000.

For this and more information on these new requirements see:


R & D Tax Credits Can Boost Cash Flow

Changed research and development (R&D) tax credit rules, which came into effect at the start of the 2016 income year, can help business cash flow.

The R&D Tax Credit regime allows a "cash out" of an organisation's R&D tax losses. The cashed-out amount must be repaid from future income.

In general, a taxpayer will be eligible for the cash out if they:

• Are a New Zealand tax resident company
• In a tax loss position
• Maintain continuing ownership of intellectual property.
• Have a "wage intensity" of at least 20 percent (calculated as total R&D labour expenditure ÷ total labour expenditure).

The "cash-out" is subject to maximum caps and will be clawed back in certain circumstances such as a substantial shareholding change or the disposal of R&D assets.  Only expenditure that doesn't meet the threshold to be capitalised as an intangible asset qualifies for the tax credit. If you think you may be eligible and we haven't already discussed this with you, please contact us.


Creditors Get More Protection From Indebted Businesses

A threshold for reportable tax debt has now been proposed by the government, giving creditors greater protection from businesses owing debts of more than $150,000.

The IRD will soon be able to disclose to certain credit reporting agencies, information about companies with significant tax debt. An Order in Council set a threshold of $150,000, so a company's tax debt over that amount may be disclosed.


A Tip for Employers - Kiwisaver Contributions

We have noticed on the MBIE (Ministry of Business, Innovation and Employment) Employment Agreement Builder that the Employer's Kiwisaver Contribution can be included in their total pay, rather than as an added benefit. This must be negotiated in good faith and made clear to the employee during pay negotiations so keep this in mind next time you are writing a new employment contract.

For this and more information please see the link below


Contractors Get More Tax Choice

The way contractors pay tax changed on 1 April, giving greater choice, and making it easier to get tax right. The rules around schedular payments have changed to allow this, and are compulsory for all contractors hired by a recruiter - or other labour hire business - and those previously under schedular payment rules.Other contractors can opt in if their payer agrees to deduct tax on their behalf.

Contractors already under schedular payment rules
Contractors must complete the new tax rate notification form (IR330C) when starting any new job. On this form, they pick their preferred tax deduction rate. New Zealand tax residents can pick any rate from 10 percent to 100 percent. If you complete the form but don't pick a tax rate, the labour hire business will deduct tax at 20 percent. If you don't complete the IR330C, the no-notification rate of 45 percent will apply.

Self-employed contractors
If you contract directly for any business and do not have to have tax deducted by the hirer, you may choose to have tax deducted from your payments. You and the payer must agree to this approach, and a written record of the agreement should be kept. If you work for several businesses, each must agree to the request. If a payer doesn't agree, you will continue to pay tax for that work as done previously.

Use-of-money interest charges for underpaying provisional tax are also changing. From the 2018 tax year, new rules mean fewer people will have to pay it.

Paying contractors
If your business hires contractors you need to follow the following steps when paying them:

• Check the accounting software includes the option to choose variable tax rates
• Brief the payroll team
• Download the new tax rate notification form (IR330C) and get contractors to complete it
• Add the contractor to your EMS and complete as you would for any other person receiving schedular payments - ignore additional deductions
• If you employ contractors directly, you must record the agreement with them to deduct tax


Contractor or Employee? $65,000 Fine for Getting This Wrong

Not correctly disclosing who is a contractor and who is an employee correctly can have serious repercussions on a business.

In a recent scenario two car sales companies with the same director were penalised $65,000 for incorrectly categorising their staff as independent contractors and not allowing them their basic human rights. The owner did not have a written agreement because he believed that as his staff were contractors this was not needed but that wasn't enough to convince the labour inspector.

For more information on the differences between employees and contractors please click here


Warning! Xero phishing emails are going around

We have had Notification that there has been some Xero phishing emails going around as "Xero Invoice Reminders" and "Xero Billing Notification" emails.

Please be on the lookout for any emails posing as legitimate emails generated from Xero. Please note that you do not need to be using Xero to potentially be affected by this phishing attempt.

If you receive a Xero Invoice reminder or another type of email that looks suspicious to you, check the following:

  • What email address has it come from? A genuine Xero email will always come from a domain or sub-domain address, e.g.,,,,,  If it's not from a address, be suspicious.
  • Is the company/contact that the email came from someone that you normally deal with?
  • Is the PDF a normal email attachment or link? If it is a link then it is likely to be a phishing email.
  • Is either the PDF link or the bill asking you to allow software to make changes to your computer? If so STOP IMMEDIATELY! This may lead into you getting a virus.

For examples of a few phishing emails that have happened and further information from Xero please see the link below:


Warmest Regards,
Louise Neville
Director, Chartered Accountant

What Next? The Future of our Economy

Hi Everyone,

Just thought I'd send you a link to "What Next?" 

I'm thoroughly enjoying & feeling totally out of my comfort zone watching what New Zealand is likely to look like in 2037 (only 20 years away).  University of Auckland, Nigel Latta & John Campbell are presenting every night this week 8.30pm, TV1 finishing Thursday night.

Last night's episode "The Future of Our Economy" was about what the next generation business looks like. 

Click HERE to view the show.

Would love to hear your feedback & how you think this will affect you but more importantly, what will your business look like in 2037?

Should you have any questions at all please call me on 03 374 9393.

Christmas Pays

The public holidays over Christmas and New Year are:

  • Sunday 25 December 2016 (or Tuesday 27 December 2016 if your staff don't usually work Sundays)
  • Monday 26 December 2016
  • Sunday 1 January 2017 (or Tuesday 3 January 2017 if your staff don't usually work Sundays)
  • Monday 2 January 2017

As two of the public holidays fall on a Sunday, this would be observed on the Tuesday following, unless your employee normally works a Sunday in which case you would record the public holiday taken as the Sunday.

We have a great flow chart that can help you work out what public holidays to pay staff if they are either working or not working on the statutory holidays. Just give Jill a call on 374 9393 and she will email you through a copy. 

Calculating Holiday Pay

Holiday Pay must be paid at the greater of either:

  • "Ordinary weekly pay" (the amount an employee receives under their employment agreement for an ordinary working week), or
  • "Average weekly earnings" (an employee's average weekly earnings for the 12 months immediately before the end of the last pay period).

If it isn't possible to determine an employee's ordinary weekly pay, the Holidays Act 2003 provides a formula to use. Click HERE to see the formulas or give us a call and we can help you.

If you have employees working or on call over public holidays, please contact us and we'll help you with the extra requirements.

Employees can ask to take paid annual leave holidays in advance when they do not have an entitlement – either because they have not completed 12 months of service, or because they have used all their entitlement.  Approval of this is at the discretion of the employer, unless it is included in their employment agreement.

The payment of holidays taken in advance is still based on the above rules, the greater of either "Ordinary weekly pay" or "Average weekly earnings". To calculate average weekly earnings where the employee has less than 12 months service, take the gross earnings from their start date until the last pay period before the holiday and divide by the number of weeks worked.

Tax on Christmas Parties and Presents for Clients/Employees

I'm sure a lot of you will be gearing up for Christmas parties if you haven't already had them.  You may be able to claim either 50% or 100% of your party expenses in your GST and income tax returns if the expenses are related to your business (depending on where the party is). Just give Emilie a call on 374 9393 for more information.

Christmas presents and/or bonuses for employees can also be deductible but may fall into the FBT or PAYE rules so again, please contact Emilie for advice on this.

We have a PDF we can email you that breaks the rules down further, just email for a copy.


Accounting Solutions Christmas Break

We will be closing down over Christmas and New Year for 3 weeks. Our last day in the office will be Thursday 22 December 2016, returning on Monday 16 January 2017.

We hope that you have a wonderful Christmas break and you come back with passion and enthusiasm for a cracker of a year in 2017!

Warmest Regards,

Louise Neville
Director, Chartered Accountant


How to Increase Cashflow Over Christmas

Eliminating Christmas Cashflow Crisis

This has been what we have been focusing on with a number of clients over the last month, as the coming three to four months will be tough on cashflow. It's the hardest time of the year on money and planning. The majority of businesses go into negative cashflow, in January more so than in December, unless you're in retail.

With only 3 weeks left to generate the extra cash required to cover any shortfall, a place to start focusing on is sales and output. Plan your selling and production now for your last 3 weeks if you haven't already and definitely for January. Ensure good quality control to eliminate errors and loss of production/time. Watch discounting and waste as this eats into your cash due to reduced profits.


Cash Owing To You (Accounts Receivables)

Be diligent this month, this week is your opportunity. Ring now to collect all 30 day or older debtors. On 15 December ring all current debtors, as well, to confirm with your customers that they have received your invoices and that you both have the same amount showing as outstanding for payment.

Follow up and ring all outstanding debtors by 21 December.

Make sure you get all your December invoicing out on time, in fact sending them out early will help. Weekly invoicing could be a good idea for the next two weeks if you don't already do this. Then again on the 16 January ring all outstanding balances & try to get these all collected for 20 January.


Cash To Pay Out (Accounts Payable)

The majority of you will close down over the Christmas period for two to three weeks and decisions of what suppliers will get paid will have to be made. 

Make sure you plan out paying your accounts payable. That's why doing a cashflow budget for the coming four to five months is a fantastic idea – if you pay your creditors out before you've received your accounts receivable in, your bank account has to fund the gap, including all the wages and overheads. That's a real pull on cashflow.


Tax Due on 16 January 2017

Remember that Provisional Tax and GST payments are due 16 January 2017. If you are unable to pay your Provisional Tax or GST on time, organise a pre-arrangement with the Inland Revenue which prevents penalties. There will still be Use of Money Interest but likely no late penalties. Contact Emilie on 03 374 9393 to arrange this for you before 22 December (we reopen on 16 January 2017).

Tips for Cashflow Over December/January

  • Look at getting a bank overdraft now for over the Christmas break (organise this week if needed).
  • Sell surplus assets or stock at reduced prices – get on Trade Me selling.
  • Get deposits, where possible, for December and January work especially.
  • Be focused, make every minute count up to the final day of work.
  • Watch dates with ordering stock, usually done on or after the 1st of each month, but because of close down watch you order in time and have supplies for the week you arrive back. Remember you can always negotiate with suppliers to extend credit just for December/January.

Awareness and clarity gives you power and knowledge so you can act accordingly to prevent there being a cashflow issue and if there is one, it's managed.

We can work out your cashflow drop through Christmas. I can't give you a quick formula as every business is different, depending on what accounting system you were on last year and any changes in your business this year, so call me on 03 374 9393 and we can discuss your cashflow over the phone.

Coming Back After Christmas

When you come back from your Christmas break, hit the ground running with work already booked in and supplies organised. This will help the team be productive from day one with a smooth, easy start to the year.  Remember to look after your team – say thank you and remember January is hot, it's holiday mode, and not a good month for overtime and extra work.


Group Business Mentoring for 2017 - LIFT Wealth

Our first LIFT Wealth & Lifestyle group have just had their third workshop and I have seen the benefits all year from their group. The business owners share advice and provide perspectives, realising their issues are shared amongst the group and they are not alone. It doesn't matter what business it is, everyone is experiencing or has experienced something similar. Talking openly and discussing different options plus implementing their new learnings, they help with accountability and sharing what's working and what's not working. Their goals and business planning that were written down in the first workshop are coming into reality. To get to the end of their year and see the knowledge being utilised and progress being made is rewarding for everyone.

There is an opportunity to join the next Lift Wealth & Lifestyle small group that starts late February and runs for a full year.  Please contact me if you would like to discuss what you could possibly get from this workshop.  Only 4 more businesses can register for this before it's full.


Louise Neville
Director, Chartered Accountant

You Can Have Better Creditor Protection

To help protect you from not recovering bad debts because you are an unregistered creditor, add a 'Personal Property Security' clause into your "Terms of Trade Agreement" and then register it with the Companies Office. This works for all types of businesses including trades & services and helps you line up in front of the other unregistered creditors. Contact us to get a copy of the clause and find out how to register the security. It is simple, effective & long lasting.



How Does the Budget Affect You?

Budget Perspective

I read the budget seeing more opportunity for Christchurch business through the Christchurch Regeneration Announcement, with their focus now on rebuilding and developing schools. They will be injecting another $40.7million into Christchurch schools physical infrastructure and another $800million to start on public sector projects. Aligning yourselves with key project leaders and sub branches of these projects is an opportunity for continued work over the coming 3 years.

On the tax front, nothing has come into force immediately. It is mainly about the Inland Revenue new tax administration changes to make the tax system fairer and simpler with the main change being how you calculate and pay your provisional tax plus a reduced interest and penalty regime. None of this takes effect until 1st April 2017 and is not yet legislation so I will keep you informed once it is a definite and the amendment has passed.

 Multinational Companies

The Government announced that they will be making further changes, targeted at multinational companies, to make it harder for them to avoid paying their fair share of tax. What those changes are, we don't yet know but it is probable they hinge on sharing tax compliance information internationally as the Government is now party to the OECD multilateral competent authority agreement. This enables automatic sharing of country-by-country reporting and is part of a larger OECD project to reform the international tax framework.

Other Business Announcements

Other areas I think are of interest to you are:

  • Enhanced internet access to government websites: $12.7m is allocated over four years.
  • Free trade agreement implementation: the Ministry of Foreign Affairs and Trade is allocated $4.6m to help exporters access the benefits of free trade agreements, including the Trans-Pacific Partnership.



PAYE & Wages

For changes to PAYE/Wages refer to our last newsletter about these changes that came into effect 1st April 2016 by clicking HERE. 



R & D Tax Credits

Looking into this further, very few businesses can apply for this. As documented in our previous newsletter, a business conducting research or development which is making a tax loss may be eligible to cash out your R&D tax losses for the 2015/16 tax year. We are looking into this for a few of our clients, contact us if you would like to know more.



Mileage Rate Changes

The Commissioner has reduced the mileage rate from 74c to 72c/km for the 2016 tax year. If you rely on the standard mileage rate when reimbursing your team for travel, make sure your payroll system is updated to reflect the reduced rate.



New GST Online Filing

To use this service you need two things: you need to be using Xero or MYOB but you also need confidence that your systems are set up to capture your GST position correctly. You want to be sure you won't be exposed to tax penalties for underpayment further on.

If you would like to discuss this further, please contact us.



Withholding Tax for Contractors

  • Contractors will be able to elect their own withholding tax rate.
  • Contractors working for labour-hire firms can now be covered by withholding tax.
  • Contractors and their payers can forge voluntary withholding agreements so that contractors can have tax withheld on a payday basis, reducing the impact of provisional tax.



Changes to Land Sales Could Affect You

Are you selling residential land? From 1 July 2016, a new withholding tax – residential land withholding tax (RLWT) – may need to be deducted from a property sale/disposal where the property being sold/disposed of is in New Zealand and meets the definition of 'residential land', and the vendor:

  • acquired the property on or after 1 October 2015, and
  • has owned it for less than two years before selling or disposing of the property, and
  • is an offshore RLWT person

Obviously, this affects non-residents. Less obviously, an 'offshore RLWT person" includes New Zealand resident companies who have shareholdings of 25% or greater held by foreign persons and also trusts where more than 25% of the trustees are foreign persons. Just because your business is a New Zealand Company, it doesn't mean that you will not be caught by these new rules. It is possible for certificates of exemption to be applied for affected taxpayers. Contact us if you think this may affect you in the future.



Health & Safety, Employment Law and ACC Seminar

In early August, we will be holding a seminar to go over the issues that have arisen with the new Health & Safety legislation and how to implement and also prevent common pitfalls

We will send out another email and an invitation to the seminar mid-July with further details.


If you have any queries or would like to discuss how any of these changes will affect you, please give me a call on 374 9393.

Louise Neville
Director, Chartered Accountant

Important Changes from 1 April 2016

PAYE deductions are Changing

PAYE on all wages is changing from 1 April 2016 due to a reduction in ACC levies. If you use a payroll software package, this should be done automatically but if you pay wages manually, you will need the new 2017 tax tables. Read on for information about the ACC levy changes.


Minimum Wage Increase

The adult minimum wage is increasing to $15.25 per hour effective 1 April 2016 ($0.50 increase per hour). The starting out and training minimum wage also increases on 1 April 2015 to $12.20 an hour. Starting out and training minimum wages are 80% of the adult minimum wage.

The Adult Minimum Wage

The adult minimum wage applies to all workers aged 16 and over who are not starting-out workers or trainees, and all workers who are involved in supervising or training other employees.

The Starting-Out and Training Minimum Wages

The starting out wage is focused on:

  • 16 and 17-year-old employees who haven't yet completed six months of continuous employment with their current employer;
  • 18 and 19-year-old employees who've been paid a benefit for six months or more, and who haven't yet completed six months continuous employment with any employer since they started being paid a benefit. Once they have completed six months continuous employment with a single employer, they'll no longer be a starting-out worker, and need to be paid at least the adult minimum wage rate;
  • 16 to 19 year olds in training in a recognised industry-training course involving at least 40 credits a year.

The training minimum wage applies to employees aged 20 years or over who are doing recognised industry training involving at least 60 credits a year in order to become qualified.


Enforcement of Employment Standards

From 1 April 2016, changes will strengthen the enforcement of minimum employment standards, such as minimum wages and holiday entitlements. These include a new infringement notice regime, clearer record keeping requirements and tougher sanctions for the most serious breaches, such as exploitation.

For more information on the requirements, please contact Jill on 03 374 9393.


Zero Hour Contracts

From 1 April 2016, you must write any agreed or flexible hours of work in the employment agreement for each employee.

If you and your employee agree to set hours (ie. any number of days, start and finish times, or days of the week), include these details in their employment agreement. But if you and your employee both prefer flexibility, you don't have to agree to any set hours and state this in the employment agreement.

If you plan to require an employee to be available for work, (ie. on call) then you must give them at least some guaranteed hours of work. 

Employers can't cancel a shift without giving their employees reasonable notice or reasonable compensation.

This has been brought in to stop unfair employment practices as it makes it hard for employees to plan their finances and personal lives. The aim is to allow flexibility when you and your staff both agree to it, and to give employees some certainty about what they can and cannot expect from their employer.

Make sure you review your employees' contracts to make sure they state flexibility or the minimum hours of work, ie. any guaranteed hours of work, start and finish times and days of the week.

If you don't have suitable employment agreements, please ring Kate on 03 374 9393 and she can assist or prepare these for you.


Child Support

From 1 April 2016, the age children can be included in child support is reducing from 19 to 18, unless the child is enrolled in and attending school. 

Child support calculations and what attributes to earnings has changed. If this affects you, please contact Louise on 03 374 9393.


ACC levies will reduce from 1 April 2016

Up until now, the Work, Earner's and Motor Vehicle levies have all been made up of two parts:

  • A current portion (changes each year)
  • A residual portion (needed to collect a fixed amount by 2019)

From 1 April 2016, the residual portion of the levies will be removed for the Work and Earners' Accounts and from 1 July 2016 will be removed from the Motor Vehicle Account levies.

This will result in lower ACC levies, depending on your industry and risk.

Your employees will also notice a small increase in their tax home pay as the Earner rate will decrease from $1.45 to $1.39 for every $100 of liable earnings.


Changes to Parental Leave

The current 16 weeks of paid parental leave will increase to18 weeks for babies expected or born on or after 1 April 2016.

The new law extends parental leave payments to more workers, including:

  • Casual and seasonal workers
  • Those with more than one employer
  • Those who have recently changed jobs

Previously only biological or formal adoptive parents could claim parental leave payments. The law change extends this to others who take on the permanent care of children under the age of 6.

Eligible parents of premature babies will receive parental leave payments for longer.

Staff who have worked for an employer between 6 and 12 months will be entitled to 6 months parental leave. This includes the 18 week paid period plus 8 weeks of unpaid leave.


Minimum Family Tax Credit
Low income working families eligible for the minimum family tax credit (MFTC) will receive an increase from $443 per week to $457 per week from 1 April 2016.


Health & Safety Law Changes

Further to our October 2015 newsletter, the new health and safety laws come into effect on 4 April 2016.

The new law states that everyone must play a part in working in a safe and healthy way. You must also do what is "reasonably practicable" to manage health and safety risks at work. Your business must make sure all workers can contribute to health and safety decisions at work.

Most asbestos removal work over 10m2 will require a licence from 4 April 2016. This affects not only asbestos removal businesses, but also builders, roofers and other tradespeople who remove asbestos.

If you work in construction on premises built before the late 1990's, you will probably be working with materials containing asbestos. This could include replacing lino, removing soffits, external wall cladding, corrugated roofing sheets and textured ceilings.

With the new law, you will either need to use a licensed remover, or get a WorkSafe removal licence if you want to remove asbestos:

For more information about this and obtaining a licence please click HERE.

If you need some health and safety advice, we held a seminar last year and had a great guest speaker who can help you implement your health and safety and works alongside you if accidents or audits do occur. Please give us a call and we can refer you on.


If you would like any further information on any of the upcoming changes please do not hesitate to give us a call on 03 374 9393.

  • "With our previous accountant, I had all this information but didn't really get a grasp of what it meant. Now with Accounting Solutions I understand my overall business and where we are going."
    -Richard Allin, Managing Director, Push Bikes Ltd
  • Accounting Solutions has surpassed my previous experience of a large international accounting firm. An experienced accounting team who can manage complex financial tasks."
    -Phil Bryant, Channel X
  • "We have been clients of Accounting Solutions for over 13 years now. Their proactive approach has helped our business to continue to grow and helped make business simple, profitable and enjoyable."
    -Bernie Hunt, Managing Director, Sydenham Joinery Limited
 Get news, tips and advice
* essential


P: 03 374 9393
F: 03 374 9392

77 Gasson Street
Christchurch 8023

Copyright Accounting Solutions Ltd © |  Site Map | Websites for accountants by Wolters Kluwer | Website by CorporateZoo and CCH