PKF International
PKF Poutsma Lemon Limited
PKF Poutsma Lemon Ltd, Keri Keri, New Zealand
Accountants and business advisers

Discrectionary relief has been offered to dairy farmers affected by the dairy price downturn for the 2015-16 income tax year from the Inland Revenue. Read more in their latest release. 

"We're aware the dairy price downturn may cause financial issues for dairy farmers and will materially affect some farmers financial position for the 2015-16 income tax year.

Income equalisation scheme - deposits

As the price downturn was evident very early in the 2015-16 tax year the use of the general discretions for late deposits is unnecessary. However, dairy farmers who are materially affected by the dairy price downturn can still make individual application for late deposits.

Income equalisation scheme - withdrawals

Normally income equalisation deposits are not available for refund until 12 months after the deposit is made. However we do have discretion to allow early refunds, particularly in the case of "adverse events" or when the person is suffering serious hardship.

We will allow those dairy farmers who are materially affected by the dairy price downturn and who are therefore suffering financial hardship to make early withdrawals in their 2015-16 or 2016-17 tax years.

All applications for an early refund must be in writing and will take approximately 20 days to be processed. It should be remembered that the refund will be income in the year that the application is made unless it is elected to treat the refund as income in the prior income year where the application for refund is made in the specified period."

If you have been affected and are struggling to deal with your tax affairs, please contact us sooner rather than later so we can help. The best way to do this is to call the office on 09 407 7142.

A long time ago, in a galaxy far, far away…

For a lot of us, the Star Wars saga is the greatest film experience there is. From the first time we saw it as kids, to taking our own children to see the later installments. It's a story that speaks to all generations and transcends both age and gender. Bar a few regrettable cartoonish characters and bit of brother and sister pashing – Star Wars it's perfect as it is.

Watching it now though, you can't help but wonder if things might have turned out differently if some better business processes had been implemented. So the Xero team has put together a few scenarios where things may have played out better if the Star Wars team had've used a cloud accounting platform.

1. "I've got a bad feeling about this…"
So here's the situation: Han Solo botches a smuggling job for Jabba the Hutt, he ends up with a price on his head and for years, Bounty Hunters are scouring the galaxy looking for Han.

How much is all this debt recovery costing Jabba? All those Bounty Hunters contracted. All of those space travel costs, from one end of the galaxy to the other. Not to mention the destruction of property and loss of life. Surely there must be a better, more efficient solution? As it so happens, there is.

Jabba could have sent Han Solo an Online Invoice using Xero and with Invoice Reminders, it would have saved that awkward conversation at the canteen table (where Han DEFINITELY shot first). Jabba could've seen that Han had received and opened the invoice and Han could have paid it online, as soon as he received those Galactic credits after returning Princess Leia to the Rebel Base. No nasty Bounty Hunters, no carbonite freezing. Life would've been so much simpler.

2. "But he asked the impossible…"
After the spectacular destruction of the Death Star - a planet-destroying, superweapon and space station - The Empire decided to construct something bigger, badder and indestructible (spoiler alert: it got destroyed). They gave the updated version the inspired name of "Death Star 2" – or "the second Death Star".

Moff Jejarrod may have been the Project Manager, but The Emperor was a tough boss. He set unrealistic deadlines and sent in scary middle management in the form of Darth Vader for unscheduled site visits.

Had the Empire used Workflow Max to track job costs and manage contractors, they may have delivered Death Star 2 on time and on budget. Then The Emperor could have chilled on the micro-management and checked out how everything was going at a glance and in real time, using Xero's Performance Dashboard. No torture by force lightning or choking. No HR violations. Everyone wins.

3. "That's no moon…"
While we're on the subject, the plans to the Death Star fell into the wrong hands not once, but twice! Did the Empire not learn the first time that there must be a better, more secure way to store and send these? Perhaps if they had emailed the plans to the Xero Files Library, it would have stayed out of the hands of those pesky Bothan Spies. Xero's recent 2 Step Authentication feature would have also added that extra layer of security, to stop R2D2 accessing vital information.

4. "These are not the droids you're looking for"
The Jawas are a race of Desert scavengers, eking out a living selling the bits of scrap space junk and wandering droids they find in the dunes of Tatooine. They are a small business and a basic inventory system could have saved them a lot of trouble (ie. possibly not getting massacred by Stormtroopers). Furthermore, if the Stormtroopers had invited users into the Jawas Xero organisation, Global Search would have helped them confirm that those were most definitely the droids they were looking for.

5. How do you know you can trust the Bounty Hunter you're hiring?
You never have to set foot in a wretched hive of scum and villainy again, with the Xero Add-On Marketplace and Partner Directory. Find a trusted Partner in a Galaxy closest to you and see how other users have rated them.

My CA Journey

Last month I became a Chartered Accountant, a Chartered Accountant! Saying it out loud it still feels surreal. I have been on quite an adventure since Alison hired me in July 2007. I have graduated with a Bachelor of Accountancy, married, been on an OE, had a baby, started building a house and met a lot of lovely people along the way.  

An accounting career is by no means where I thought I would end up; I was initially studying conservation and environmental management at Northtec. Knowing I wanted to stay in Kerikeri I considered my job prospects and was still undecided when I saw PKF Poutsma Lemon Limited (formerly Horwath Poutsma Ardern Limited) advertising a job in their Paihia Office. So off I toddled with my CV, nervous as heck to drop it off personally at the Paihia Office (I lived in Kerikeri at that time). Shortly afterwards I received a phone call requesting an interview in the Kerikeri Office , not the Paihia Office as had been advertised.

Interview day rolls around and I'm really nervous (I had only experienced one job interview as I stayed at my former job for 7 years– thank you Kerikeri New World). I became even more nervous as I bumped in to Alison in town while wearing civvies! Anyhow the interview must have gone well because I am still here today 8 years later!.

The Chartered Accountancy journey is a long but fulfilling one, I took a slightly different path to most and completed my studies while working rather than going to university full time. The journey usually goes a bit like this:

1)      Obtain a three year degree while completing the paper requirement specified by Chartered Accountants Australia and New Zealand. When I first started there was a requirement to complete four years of university study, I completed 7/8 of the fourth year when the rules changed again back to three years!! (of course!). I completed my papers by correspondence through Massey University so it took me a lot longer than three years to graduate.

2)      Obtain three years practical work experience under the guidance of a mentor who is a member of the Institute (thank you Alison).

3)      While working, candidates are required to complete further study in the form of a Postgraduate Diploma in Accounting through Chartered Accountants Australia and New Zealand. This consisted of four core modules specialising in Audit & Assurance, Taxation, Management Accounting & Applied Finance and, Financial Accounting & Reporting. Then finishing with a Practical Module which brought together all the others as well as our work experience. This also required attendance at three full day workshops in Auckland and a lot of group work.

I, of course, do everything 110%. I had my baby girl Mackenzie two weeks before my taxation exam. She went with nana to a friend in Whangarei while I sat the three hour exam. I was also still feeding her through the Capstone Module as she was very young; those full days were interesting and a bit uncomfortable!

My whole journey has been worth it and I am so glad I responded on a bit of a whim to the job advertisement all those years ago. Thank you so much to my mentor Alison Lemon, for firstly hiring me and then supporting me through all of my studies. I am looking forward to actually receiving my certificate "officially" next year.

Well that's all from me for now. Have a very Merry Christmas. Keep safe and see you in the New Year. Our Kerikeri Office is closing at 12pm on Wednesday the 23rd of December and re-opening on the 18th of January at 8.30am.

Cash in on Holiday Fever

Cash in on Holiday Fever

As the countdown to the holiday season continues, the ever-growing Christmas shopping list becomes forethought on many minds. When time is limited and you still have to get something for Nanna, three Aunties and your second cousin twice removed, it gets to the point where you just want to throw money at it to be done. And that's not even mentioning the madness of Boxing Day sales! Here are 6 hot tips to make the most of the busiest sales time of the year and ensure that people like me are throwing money in your direction.

1.  Get more staff.
There is nothing more frustrating than waiting in line. I'm sure I'm not the only person that has looked at the 5+ people deep line at the counter and decided to go somewhere else. I'm not talking too many so you can pay them to stand around and do nothing, but if you have customers waiting in queues, you need more staff.

2. Know your products.
Make sure you and your team know what you're talking about, or at the very minimum can direct enquiries to a more knowledgeable member. If I don't feel I'm getting a good service, I look elsewhere. I don't want to be sold a dud, by a dud. There's a great chance for additional sales here because I don't know what else I need with that sale and a well explained (but not pushy) sales pitch might make me buy that accompanying product.

3. Smell like success.
Studies have shown that a good smell can increase spending by up to 20%. Popular scents are lemon and orange which supposedly make a customer feel alert, refreshed and focused. Naturally, pine is a festive choice for Christmas. Along the same theme, flowers or fresh baking can do the trick.

4. Set the mood with slow music.
Like the effect of smell, slow music adds to the relaxing atmosphere that says "Hey. You there. Valued customer. Stay awhile." Fast, loud music has it's own energy and wants people to move their feet and dance out of your place of business.

5. Take the money, quickly.
Shoppers everywhere are in a hurry. If you can speed up transaction time by even a few seconds you will not only keep the customers happy as their wait time is shorter, but you can serve more over the same period of time. If you don't have PayWave or contactless EFTPOS terminals, get them. Immediately.

6. Paint the town red.
Spontaneous holiday sales can be encouraged by fostering a sense of urgency. Buy now. Limited stock. Selling fast. One day only. Red is definitely your colour of choice. Interestingly, yellow is often associated with attention and hunger which is why yellow and red are so frequently occurring at fast food restaurants.

So there you have it. 6 hot tips to boost your holiday period sales. Try them today and watch how these simple ideas have an immediate effect on your back pocket.


 On the tenth day of Christmas I'm feeling like Santa  Clause, let's sponsor something for a good cause.
You can deduct 100% of the cost of entertainment you supply to the general public for charitable purposes.

 

On the ninth day of Christmas I've escaped in the car. I need a meal since I've travelled oh so far.
If you or one of your employees buys a meal while travelling on business, the cost is 100% deductible. That's despite the rule that says food and drink provided away from your business premises is only 50% deductible. However, you can only deduct 50% if the travel is mainly for the purpose of entertainment, if the meal or function involves and existing or potential business contact, or at a celebration meal, party, reception or similar while you are travelling. You can deduct 100% of the food and drink you provide at a conference, education course or similar event that lasts for four hours or more.

On the eighth day of Christmas my secretary wants from me, some chocolate biscuits for her morning tea.

Light refreshments, like morning and afternoon teas, are 100% deductible.

On the seventh day of Christmas my staff want from me, a bonus (preferably tax free).

A cash bonus is taxable income to your employee and will be subject to PAYE. Income to the employee, fully deductible expense for the employer.

A gift voucher that is in lieu of cash is treated as a cash bonus. 

You can generally claim 100% of the cost of gifts, such as food baskets or event tickets.

 

On the sixth day of Christmas we've got to book the hall, everyone is invited – one and all!

As the event is open to the public, it is 100% deductible expenditure. You would be able to claim all the food, drink and other associated costs.


On the fifth day of Christmas they're now telling me, "Inviiiiiiiiite all the cliennnnnnnnnts!"

But as only clients are invited, the event is only 50% deductible. In order to claim 100%, the function must be open to the public.

 On the fourth day of Christmas my staff want from me, a Christmas party at the Pear Tree.
Food and drink provided away from your business premises is only 50% deductible.

On the third day of Christmas to appreciate their hard work, I'll give my staff a Christmas party at work.
You can only deduct 50% of the cost of food and drink you provide at your business premises (other than light refreshments). This includes a social event, eg, celebration meal, party, reception or in an area restricted to senior employees, such as an executive dining room. This rule applies whether the entertainment is provided to staff or to guests invited from outside the business. If you provide entertainment that's  only 50% deductible, you can only deduct 50% of any supporting costs such as hire of crockery, glasses, waiting staff and music.

On the second day of Christmas my business gave to me, less tax to the IRD. 
Read what you need to know about tax considerations of the holiday season including the staff party and Xmas bonus in our latest blog "The Grinch that Taxed Christmas".


The Grinch that Taxed Christmas


It's time to tick another one off the calendar and celebrate with loved ones and workmates – not necessarily one and the same. But someone always has to be the party pooper and in this case it's the usual suspect – the IRD. As a business owner what are the tax considerations of the holiday season? The traditional Christmas knees-up for staff is a legitimate business expense right? Not like that sneaky 'buying trip' to Auckland that happened to coincide with taking the kids to see the production of "Annie". Well, it's not always that straight forward.

Generally, expenditure on entertainment is only 50% deductible. Even though the Christmas party for staff is an expense related to your business, there's also a significant private element. Party expenses you can claim 50% of can include venue hire, food, drink and entertainment. The only exception to this is light refreshments, such as a morning tea, that is provided on business premises which is 100% deductible. No thanks, Alison. The team wants a night out – cocktails and all.

A cash bonus is taxable income to your employee and will be subject to PAYE. Income to the employee, fully deductible expense for the employer. A gift voucher that is in lieu of cash is treated as a cash bonus. You can generally claim 100% of the cost of gifts, such as food baskets or event tickets. But you may need to pay fringe benefit tax (FBT) on such gifts. The threshold depends if calculations are accounted for quarterly or annual but generally no more than $1,200 per year per employee and $22,500 across all employees. Anything exceeding this, not only do I want a job, but the whole value of the gifts become subject to FBT, not just what exceeds the threshold.

If you provide other types of goodies, like accommodation in a holiday home, use of a corporate yacht or lunch at a restaurant, then these come under entertainment expenses – and are 50% deductible as long as they're business expenses. I'm sure I'm not alone when I ask "Where's the job application?"

Client gifts fall under the marketing umbrella and should be considered 100% deductible. However, the same can't be said for client functions. In order to claim 100% of all food and drink costs, the event must be open to the public so that anyone can attend. Any other function would be limited to the usual 50% deductibility.

Entertainment can be a tricky subject and the staff at PKF are more than happy to be invited to your event to provide some personal advice. All the team would like to wish you a safe and merry holiday season. The Kerikeri office will close at 12:00 pm on 23 December 2015 and will reopen at 8:30 am on 18 January 2016.

 

PKF Poutsma Lemon Limited

Jancy Stott

Town Meets Country


Tomorrow we're taking a day out of the office and going to meet and greet the unwashed masses. While I say that tongue in cheek, as there certainly will be a lot of primping and preening going on around the district tonight, I dare say that a decent portion of that will be horses and livestock for show. Please tell me I'm not the only one that didn't know that horses wear makeup to these sorts of events?

 

Did you know that The Bay of Islands Pastoral & Industrial Show is the oldest agriculture show in New Zealand with a history predating 1888? It was initially started as an "agricultural demonstration" and held in the area on local land until the first permanent site was established at Grove Cottage Farm.  A nikau and pole structure formed the first Show Hall. These days, the show incorporates The Food & Wine Pavilion, showcasing local producers, wineries and cafes in the indoor RDA arena, as well as the more traditional events such as Equestrian and Livestock classes, indoor Hall Exhibits, competitions, demonstrations, live entertainment and over 150 Trade Site exhibitors.


Now how does a group of "townie accountants" fit in with that? You say why, we say why not? It allows us to be out and about, interacting with our clients, people we know and the community in general. Every now and again they do let us out of our windowless offices and away from the computers and calculators to stretch our legs and fill our lungs with country air. They tell me it does a soul good.

 

I had to catch myself as I nearly wrote "It's not all fun and games." But tomorrow, it is. Just for coming and talking to one of our lovely team, you can go in the draw to win a Xero package worth $500. But what's more, we appreciate that it's not a prize (as fantastic as it is) that interests one and all. So we've got cold hard cash on offer. Back by popular demand is our competition to guess the combined weight of a lamb and a calf. Have your laugh now as it will indeed be Alison Lemon chasing and catching them in the dark this evening. After a bit of stick that the adults couldn't play last time, this year they can as there is separate adults and kids categories. Don't worry, we haven't forgotten the tiny tots as we've got colouring in and balloons to keep them distracted under our gazebo while you have a good ol' yarn to us.

 

We look forward to seeing you at site 78, Bay of Islands Pastoral & Industrial Show, 205 Showgrounds Road, Waimate North. Gates open 8am. Adults (13 years and over) - $10. Children (12 & under) Free. Free parking.

 

PKF Poutsma Lemon Limited

Jancy Stott – Chartered Accountant


Don’t call us Llamas

I love my Alpacas, 4 of the cutest mowers I have ever owned. Question is, would I turn Irving, Woody, Walt and Louie – my boys - into tonight's dinner?

Farming alpacas has been a cottage/hobby industry in New Zealand since the late 1980's. I am sure you have come across the ubiquitous "alpaca scarves" sold in craft shops. How many scarves does one need, especially up here in the winterless north?

Alpaca farmers have been very busy over the last few years developing innovative ways to grow, spin and weave the luxurious fleeces of these amazing animals. As a result they are starting to produce fine woollen yarns to rival the softness of the best cashmere and merino. This has the potential to take the New Zealand industry beyond craft and into high fashion.  Louis Vuitton and Versace are showcasing alpaca fibre from Peru on the runways of Paris and Milan. Designers are on wait lists as mills in Europe and Asia rush to buy up Peru's supply.

This has great potential for New Zealand Breeders, but they would need to increase flock numbers to produce enough fibre to be competitive. The downside of the breeding programmes to build stock numbers with the genetics to produce the finest fibre possible, is the oversupply of males. This is managed by culling, selling males as pets – how I found my boys, or sending them to pet food manufacturers.  For the industry to reach its full potential the whole animal needs to be utilised, fleece, skins and meat.

In 2014 Australians ate 32 tonnes of alpaca, resulting in producers gaining hundreds of thousands of dollars, from sales to restaurants and specialty butcher shops. Alpaca meat has half the saturated fat and a third less cholesterol than beef, and the lowest calories of any land-based meat. It is tender and mild tasting. There are only 2 abattoirs licenced to process alpacas in New Zealand. Mesa Meat Company of Hawke's Bay, produces 100% New Zealand gourmet Alpaca meat products, from prime cuts to a range of small goods, such as sausages, burger patties, pies and meatballs, sold to restaurants, home chefs and speciality meat outlets throughout New Zealand. The prices range from $50 kg for tenderloins to $15 kg for mince.

I have yet to try alpaca meat but would have no issue eating it at a restaurant some time. However the possibility of one of the boys becoming dinner tonight seems remote, although if that Irving gets me with another direct hit when he is having a spit, he better look out.

Last word from the boys is, we are ALPACAS, please don't call us Llamas.

 

PKF Poutsma Lemon Limited

Janice Simpson


Know where your business is at!

As a business owner, I know how important it is to understand where your business is financially.  Most importantly… Do I have enough money in the bank to keep my business running? Depending on your industry, debtor payment terms are often the 20th of the following month, meaning I need to have enough cash to pay employees, taxes and suppliers in the weeks leading up to the 20th.

 

This is one of the main reasons I switched my accounts to Xero 5 years ago (and I haven't looked back). Each month in Xero, I enter all supplier invoices, calculate employee wages, prepare PAYE and GST returns and invoice my clients. I also reconcile my bank account regularly and often do this from my smartphone or iPad when I have a spare 5 minutes.

 

By keeping Xero up to date, I am able to generate reports that show me exactly what my current cash needs are and whether my incoming cash will cover the outgoing cash requirements on the 20th. Sometimes there may be a cash shortfall, which sometimes happens when supplies are purchased in one month but a job is invoiced in the following month (usually due to the weather). By using Xero, I know what my cash requirements are and can plan for a shortfall in advance of the payment date.

 

If you haven't heard of Xero or if you are thinking of converting to Xero, come along to our "Introducing you to Xero" seminar on Tuesday 13 October 2015 in our Kerikeri office. Email us at kerikeri@pkfpl.co.nz or phone us on 09 407 7142 to book your seat.


PKF Poutsma Lemon Limited

Janine Telfer

Stay in Touch

My Dad is one of the strongest men I know. He works harder than anyone I've ever met. Never one to shy away from hard work. He and Mum had four kids. With my siblings, that's a life sentence right there.  Plus he's a dairy farmer in Northland this season. But he's a bloke's bloke. I don't know if he'd ask for help if he really needed it.

Mental illness is a touchy subject. Historically, it was seen as a long term burden to society. There was a high degree of shame, prejudice and stigma attached. People were locked up in mental institutes – out of sight, out of mind.

Times changed when Sir John Kirwan become the public face. He told us it wasn't ok to tell people to pull yourself together. "Harden up. Everyone's doing it tough." This is the last advice someone suffering from mental illness wants to hear as it trivialises the way they are feeling. If someone was brave enough to share their problems with you and they get brushed off, they might not reach out again. Discrimination is one of the biggest barriers to recovery.

Surveys reveal that farmers want advice. Recent research shows 

  •  3 out of 10 were carrying too much weight
  • 4 out of 10 had trouble sleeping
  • More than half had issues with high blood pressure
  • Nearly half wanted advice on how to achieve better work-life balance
  • Over a third wanted to know more about managing tiredness and fatigue
  • 4 out of 10 are concerned about the impact of stress and burnout

 

Coping with financial stress

Everyone feels down from time to time and it's normal for people to feel stressed when they are facing problems with money. However, if you are finding your thoughts and emotions keeping you awake at night, you may need some extra support. It's really important to take care of yourself when things get tough – and don't feel bad about asking for help when you need it.

Get advice about money. By getting a handle on the bigger picture, you can take back some control in your life which will help you feel better about yourself and stop that feeling of being overwhelmed.

Discuss your financial situation with the team here at PKF Poutsma Lemon Ltd. Like they say, a problem shared is a problem halved. We can work together to set goals and make a clear and realistic budget and plan to get through the season.  Let us help you get peace of mind and control over your cashflow. Our most successful clients are those who've set targets each year and monitor their results on a regular basis – tough season or not. They know how they are actually performing against budget and can quickly respond to any changes on the horizon.

I'm issuing a challenge. Talk to your neighbour. Talk to your partner. Talk to your kids. Ask how things are going. Actively listen to what they have to say. Let them talk and talk to them about them. It's important to look out for your family and friends. We can make it through hard times by pulling together. I'll rest a whole lot easier knowing a community is looking out for my Dad, and other men just like him.


PKF Poutsma Lemon Limited

Jancy Stott

 

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