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Showing posts from November, 2015

Technology and your accountant could be the difference between success and failure

Want to succeed as a small business owner? Have a mentor or an accountant.  Xero's recent Make or Break? report shows that asking for help from mentors and advisors, and having a good relationship with your accountant, means you have a leg up. The research was timed to coincide with Global Entrepreneurship Week which kicks-off today. Surveying 2,000 small business owners across the US and the UK, we found that those owners who collaborate with an accountant or bookkeeper, 42% of survivors describe that relationship as "excellent," compared to 27% of those whose company failed. This statistic shows just how important accountants are to the ongoing success of the small businesses they serve. Those who succeed also invest in technology for increased productivity in finance. It was also found that they dedicate funds to marketing and customer service. Nearly six in 10 survivors (58%) use software to manage their finances vs. a marginal 14% of failures. Plus just shy

Fringe benefit tax: Private use of vehicles

Is your employee about to use a work vehicle for their Christmas holiday road trip? Such a perk is known as a fringe benefit – and is taxed. Businesses often provide perks for employees in addition to their salary or wages. One example is having a vehicle available for private use by employees. The most important point to remember is you’ll have to pay FBT, whether or not your employees actually use the vehicle. Just having the vehicle available for their private use makes it a fringe benefit. You will need to register with Inland Revenue for FBT and file FBT returns. What is ‘private use’? Private use includes travel by an employee from or to their home, and any other travel that involves a personal or domestic element. If you’re a sole trader or partner in a partnership and you use a business vehicle privately, you don’t have to pay FBT. But you will need to account for the private use by making an adjustment in your income tax and GST returns. Use a logbook to keep track of

Holiday pay and entitlements: How to calculate

The holiday season is a chance to relax with family and friends. Take the time to calculate and pay your staff what they’re entitled to, and everyone will have a merry Christmas. Public holidays, annual closedowns, different pay rates – there are many considerations in the run-up to Christmas apart from buying presents. Employees are entitled to a paid day off on a public holiday if it would otherwise be a working day. Many businesses have an  annual closedown over the Christmas period , when staff have to take time off, even if they don’t have any annual leave. If public holidays fall inside your annual closedown period, you must pay employees for them if they're on days they’d usually work. This Christmas season two public holidays – Boxing Day and January 2 – fall on a Saturday, so this has  implications for employees . For staff who don’t work weekends, the first workday after these dates will be treated as their public holidays – so they won’t have to work on Monday

Tax on Christmas parties and presents

It’s coming up to that time of year when you might be planning a staff Christmas party. It's great for morale and a chance to mark the end of the year. But what are the tax considerations? You may be able to claim as business expenses events such as Christmas functions or giving gifts to employees. However, you may not be able to claim all of the costs, and they may also be subject to fringe benefit tax (FBT). FBT is a tax paid on benefits that workers receive as a result of their employment. You may be able to claim 50% of your party expenses in your GST and income tax returns if the expenses are related to your business. But there’s also a significant private element. Party expenses you can claim 50% of can include: venue hire food and drink entertainment You can generally claim 100% of the cost of gifts, such as food baskets or event tickets, as a business expense. But you may need to pay FBT on such gifts. If you provide other types of goodies, like accommodation