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  1. Post
    I just got a refund for a faulty keyboard I bought for my business and have never had to deal with this before.

    Do I simply treat both the non GST portion of the price as revenue? and the GST portion as GST received?

    or do I need create a new entry in my chart of accounts to deal with this?

  2. Post
    labcat wrote:
    I just got a refund for a faulty keyboard I bought for my business and have never had to deal with this before.

    Do I simply treat both the non GST portion of the price as revenue? and the GST portion as GST received?

    or do I need create a new entry in my chart of accounts to deal with this?
    Usually you would just put it as a "negative expense" against the original expense account you coded the keyboard to.

  3. Post
    Awesome, thank you.

  4. Post
    My pay rise started last week, but also had one day of sick leave. (Thursday)
    Sick leave was charged at old rate and rest of week at new rate. Is this an error?

  5. Post
    jords wrote:
    My pay rise started last week, but also had one day of sick leave. (Thursday)
    Sick leave was charged at old rate and rest of week at new rate. Is this an error?
    Unless the sick day was taken before your pay rise kicked in then yes likely an error. They probably didn't update the rate for your sick pay in payroll.

  6. Post
    brand wrote:
    Unless the sick day was taken before your pay rise kicked in then yes likely an error. They probably didn't update the rate for your sick pay in payroll.
    Thanks mate, she uses Xero and is not properly qualified so **shrug**

  7. Post
    jords wrote:
    Thanks mate, she uses Xero and is not properly qualified so **shrug**
    Xero payroll is quite clunky to be fair.

  8. Post
    hi, we have one employee who has a casual contract however he was being paid like a contractor. so no paye was being deducted from his pay. He was being paid public holidays and sick leaves as well. Now, he resigned from the company and is demanding to be paid 4 weeks annual leave. Is he right? I know we should have paid his taxes but the person handling the accounts before isn't so informed with all this. He just pays the people that works for him.

  9. Post
    magdashdas wrote:
    hi, we have one employee who has a casual contract however he was being paid like a contractor. so no paye was being deducted from his pay. He was being paid public holidays and sick leaves as well. Now, he resigned from the company and is demanding to be paid 4 weeks annual leave. Is he right? I know we should have paid his taxes but the person handling the accounts before isn't so informed with all this. He just pays the people that works for him.
    First what does their employment contract about the nature of their employment? Is it a true casual contract with no guaranteed hours?

    Second were they a true casual worker in that they weren't working regular or expected hours?

    If they are a true casual worker they will be entitled to 8% (assuming they weren't being paid out their holidays as part of their regular pay).

    NOTE: A casual worker doesn't get paid public holidays unless they worked that public holiday. Paying them for a public holiday could just be a mistake or it could be an indication they had regular hours and were expected to work on that day (if it wasn't a holiday) in which case they may not be a casual worker.

    If they are not a casual worker then holiday pay may be worked out slightly differently.

    Regardless they are entitled to holiday pay. It won't be a full time 4 weeks at 40 hours week but it will be something.

  10. Post
    no guaranteed hours, they get paid with the hours that he comes in. Every week is different hours but he works not less than 20 hours each week.

    His contract says casual employment contract. Another dilemma is he wasn't being withheld with PAYE. He was being paid with the whole amount of his hours.

    brand wrote:
    First what does their employment contract about the nature of their employment? Is it a true casual contract with no guaranteed hours?

    Second were they a true casual worker in that they weren't working regular or expected hours?

    If they are a true casual worker they will be entitled to 8% (assuming they weren't being paid out their holidays as part of their regular pay).

    NOTE: A casual worker doesn't get paid public holidays unless they worked that public holiday. Paying them for a public holiday could just be a mistake or it could be an indication they had regular hours and were expected to work on that day (if it wasn't a holiday) in which case they may not be a casual worker.

    If they are not a casual worker then holiday pay may be worked out slightly differently.

    Regardless they are entitled to holiday pay. It won't be a full time 4 weeks at 40 hours week but it will be something.

  11. Post
    magdashdas wrote:
    no guaranteed hours, they get paid with the hours that he comes in. Every week is different hours but he works not less than 20 hours each week.

    His contract says casual employment contract. Another dilemma is he wasn't being withheld with PAYE. He was being paid with the whole amount of his hours.
    Yeah that isn't ideal. What (if anything) was filed with IRD when he was paid the full gross amount?

  12. Post

    Ethical Dilemma

    I developed a website for a client operating two businesses. One business is GST registered (providing services to businesses) and the other is not (providing services to non business customers). Both businesses provide the same service through the same website.

    These details were not included in the initial requirements for the website. The requirement to be able to charge GST to only selected orders/invoices was introduced a few years into the project. At the time, I questioned whether this was legal and the client said their accountant had informed them that it was. To fulfil the requirements of my contract I needed to deliver a live website. The client insisted that this new requirement need to be implemented before the site could go live (unfortunately I didn’t get written confirmation of this).

    My first questions are:

    Is this business practise legal? Or just unethical?

    If illegal and the IRD investigated these businesses, could I face any legal issues for developing the website functionality to enable these business practises?

    The reason I have started to think about this further is that I was recently CC’d into an email. In the email my client initial provides a potential customer with a quote indicating a price which GST would be added to. After negotiating with the customer, another quote is provided which the customer accepts and this quote does not include GST. My gut feeling is that this is definitely tax avoidance and if not illegal at least highly unethical.

    I don’t really have any interest in becoming a whistle blower but want to make sure I do not face any legal issues in the future. Would I face any legal issues for not reporting this behaviour to the IRD?

    Note: I am posting this on a different account for privacy reasons. Also I am planning to get legal advice regarding this but thought I would post to see what people think.

  13. Post
    I can't comment if what they are doing is above board or not but the ability to charge or not charge GST on an invoice is pretty standard.

    This is because sales to overseas customers would be "zero rated" (i.e. have 0% GST).

    So a website offering goods/services internationally as well as to NZ customers would need to be able to change the GST rate depending on the residence of the customer.

  14. Post
    Yeah, I understand zero rating however both of the businesses serve only NZ customers so to me doesn't seem quite legit.

    For example, I don't think an electrician can operate two separate businesses (for one residential customers and one for commercial customers). I could be wrong though and maybe that is totally acceptable, what do you think?

  15. Post
    I can see situations where you could legitimately set something like this up but it would require more separation between the two businesses than what you seem to be describing.

    The thing is... trying to get around GST in this way isn't really practical. Once you hit $60k of sales (NOTE: Sales not profit) you are required to register for GST anyway.

    So you're going to keep your sales capped at below $60k each year and laugh to yourself at how you got one over on the tax department?

    It just seems I dunno... petty? redundant?

  16. Post
    It's his responsibility, not yours to ensure he follows tax legislation.

  17. Post
    Hi guys, I am wanting to purchase a car from my company which will be used for business use mon-friday and personal use on the weekends. The value of the vehicle is $48000. Is it true that because its not a "Ute / Work related Vehicle" I would have to pay fringe benefit on all days in a week. Secondly I read that closed companies can elect to opt out of FBT which may be a better option. In this method is GST, Depreciation and loan interest still fully deductible or proportioned according to use.

  18. Post
    Hi Brand, question: a friend of mine had transferred her house on a trust 30 years ago and haven’t kept a book for it. He’s wanting to take up a loan which requires him to have submit a book of the trust. Can she use the latest valuation of the house?

  19. Post
    brand wrote:
    It depends . If interest is under $5,000 for the year you don't have to do anything.

    Otherwise you should register for RWT and file a return and pay RWT for each interest payment plus an overall return for the year:
    https://www.ird.govt.nz/topics/incom...ithholding-tax
    Just getting round to doing this now, the IRD website is confusing it says

    Resident withholding tax (RWT)
    Any company, agent or trustee that pays dividends treated as interest can register for RWT.
    Are you:
    • paying dividends treated as interest
    • making Māori authority distributions
    • an agent or trustee who pays RWT on dividends on behalf of another person?
    Are you: • paying dividends treated as interest • making Māori authority distributions • an agent or trustee who pays RWT on dividends on behalf of another person?


    The interest will be over $5k, but its not "dividends treated as interest" its just interest...

  20. Post
    effectivekrishy wrote:
    Hi guys, I am wanting to purchase a car from my company which will be used for business use mon-friday and personal use on the weekends. The value of the vehicle is $48000. Is it true that because its not a "Ute / Work related Vehicle" I would have to pay fringe benefit on all days in a week. Secondly I read that closed companies can elect to opt out of FBT which may be a better option. In this method is GST, Depreciation and loan interest still fully deductible or proportioned according to use.
    Yes unfortunately a motor vehicle is considered always "available" for private use. So unless you remove the back seats or something FBT will apply for all days in a week.

    The alternative basically treats the motor vehicle the same as a sole trader so everything will be proportioned based on use.

  21. Post
    magdashdas wrote:
    Hi Brand, question: a friend of mine had transferred her house on a trust 30 years ago and haven’t kept a book for it. He’s wanting to take up a loan which requires him to have submit a book of the trust. Can she use the latest valuation of the house?
    I don't really know what you mean by "submit a book of the trust". What is the bank actually asking for? If they are wanting to take out a loan secured on the house then the bank probably wants the Trustees to sign a guarantee and yes provide a valuation of the property.

    You need to go back to the bank and ask them to list exactly what they want preferably in an email.

  22. Post
    stacrafty wrote:
    Just getting round to doing this now, the IRD website is confusing it says

    Resident withholding tax (RWT)
    Any company, agent or trustee that pays dividends treated as interest can register for RWT.
    Are you:
    • paying dividends treated as interest
    • making Māori authority distributions
    • an agent or trustee who pays RWT on dividends on behalf of another person?
    Are you: • paying dividends treated as interest • making Māori authority distributions • an agent or trustee who pays RWT on dividends on behalf of another person?


    The interest will be over $5k, but its not "dividends treated as interest" its just interest...
    *sigh* if you are trying to do this online you are either in the wrong place or the way IRD have implemented the registration process is stupid. See if it will let you just skip/continue.

    If not then do it the old fashioned way and fill in the paper form:
    https://www.ird.govt.nz/-/media/Proj.../PDF/ir450.pdf

    This has been a problem with IRD looking to bring everything through myIR. The online registration process tries to take into account each and every circumstance and asks so many questions that it is just easier to fill in the manual form instead.

  23. Post
    brand wrote:

    This has been a problem with IRD looking to bring everything through myIR. The online registration process tries to take into account each and every circumstance and asks so many questions that it is just easier to fill in the manual form instead.
    Amen to that.

  24. Post
    brand wrote:
    *sigh* if you are trying to do this online you are either in the wrong place or the way IRD have implemented the registration process is stupid. See if it will let you just skip/continue.

    If not then do it the old fashioned way and fill in the paper form:
    https://www.ird.govt.nz/-/media/Proj.../PDF/ir450.pdf

    This has been a problem with IRD looking to bring everything through myIR. The online registration process tries to take into account each and every circumstance and asks so many questions that it is just easier to fill in the manual form instead.
    Thanks buddy!

  25. Post
    Hello Brand

    I'm a programmer and the company I work for reimburses gym expenses. This is being taxable, so I end up not getting back the full amount I spent.

    I'm trying to understand page 34 of the IR Employer Guide (https://www.classic.ird.govt.nz/reso...ir335-2019.pdf), where it says Benefit allowances are taxable, but "the taxable value of the benefit is the difference between the market value of the benefit provided, and any amount the employee pays".

    Since the company reimburses the full amount I paid, there's no money on top of I paid and therefore the difference is zero, so no tax.

    But I don't even know if gym reimbursement is a Benefit allowance, or a Reimbursing allowance (page 35) or if it is an allowance at all, or something else.