February 2023 – Take Note

Hi there!

Another tax year is almost over. Keep an eye out for the annual checklists, these will be sent out late March.

Rachel is in the Amberley Office on Wednesdays. Feel free to drop in any Wednesday from 9:00 – 2:30.

North Island Floods

Our thoughts are with those affected by the weather and floods.

If you have filed a return or made a payment late as a result of the floods, an application will need to be made to Inland Revenue to seek relief. Please contact us about this.

Upcoming Tax Dates

2022 Terminal Tax is due on 7 April 2023

Third instalment of 2023 Provisional Tax payment is due on 7 May 2023 (unless you have a non-March balance date).

March 2023 GST is due on 7 May 2023.

End of year tax planning

There are several things you can do to help us get your annual accounts correct including:

  • Review last year’s Schedule of Fixed Assets, let us know if any assets have been scrapped, sold, or traded in.
  • Do a stock take and remember to value the stock using GST exclusive prices. You can use Cost, Replacement Price, or Market Value to calculate the value of your closing stock, we recommend cost for most situations.
  • Bad debts: make sure that any bad debts have been written out of the debtors’ ledger by the 31 March 2023, so that we can claim them as an expense.
  • Count livestock on hand on 31 March 2023.

If you would like to discuss future business needs, or forecasting/budgeting please let us know.

Minimum Wage Increase

From 1 April 2023 the minimum wage will increase to $22.70.

Recession Planning

There has been widespread discussion around a looming recession in New Zealand. Below is a good article from Xero about how to prepare for a recession. The key takeaways are:

  1. Don’t stop advertising & marketing
  2. Get invoices out quickly and offer different ways to pay including online payments
  3. A price increase may become unavoidable
  4. Reduce Stock levels, review which goods and services you are providing
  5. Do a Cashflow Forecast so you can talk to your bank about your lending needs
  6. Look for opportunities with other businesses selling or closing down

Read full article on Xero

Residential Rental Property Interest Changes

If you buy a residential rental property any time after 27 March 2021 you can no longer claim interest on a loan taken out to purchase the property. There are a few exceptions i.e. new builds and housing used for social housing.

If you bought the property before 27 March 2021 and had an existing loan, the amount you can claim on interest is as below. So for the 2023 year, we will only be claiming 75% of the interest on residential rental loans.

Trusts Reporting Changes

From the 2021-22 tax year most trustees will need to prepare financial statements and provide additional information with their income tax returns including:
a. The nature and amount of any settlement made on the trust during the year;
b. The details of anyone who is a settlor of the trust;
c. The amount of any distributions made during the year, and the details of the beneficiary who received the distribution;
d. Details of any person who has powers to appoint or remove trustees and beneficiaries or amend the trust deed.

Xero Training

We offer one-on-one Xero training if you’d like to get a few pointers or have some questions. Get in touch to learn more.

Handy Xero Tip

Xero has an inbuilt calculator that allows you to calculate amounts as you create transactions.

When you enter a calculation in a field, then press Enter or Tab on your keyboard, Xero calculates the result.

The calculator is available in the Quantity, Unit Price and Disc % fields in transactions, and the Debit and fields in manual journals. In new invoicing, discount percentages are calculated automatically, so the calculator is not available.

The basic arithmetic functions you can use are:
Add +
Subtract –
Multiply *
Divide /
Group ()

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