Frequently Asked Questions

Can I claim gifts made to clients as a business expenses?

If you provide a gift to a client, depending on the type of gift it may be completely deductible or only 50% deductible.

If the gift is “entertainment”, such as food and wine, it will be 50% deductible. Bottles of wine, meal vouchers, chocolates and Christmas hams are 50% deductible.

Calendars, gift vouchers and tickets to the movies are 100% deducible.

Contact us if you want to know more

I’ve withdrawn funds from my foreign superannuation scheme. How will this be taxed?

If you withdraw or transfer a foreign superannuation scheme into:

  • A New Zealand or Australian superannuation scheme, or
  • A bank account

You are liable for income tax.

If you transfer your foreign superannuation scheme from an overseas country to a foreign superannuation scheme in another country that is not New Zealand or Australia you are not liable for income tax.

If you withdraw or transfer from an Australian superannuation scheme to a New Zealand superannuation scheme you are not liable for income tax.

Contact us if you want to know more.

I am buying a new vehicle - should I buy it or should I lease it?

When making a decision to lease or buy a vehicle you must look at your personal priorities and your financial situation.

Consider:

  • Is having some ownership in your vehicle more important than low upfront costs and no deposit?
  • Do you need the use of a new vehicle but lack the funds for a deposit upfront?
  • Is it important to you to pay off your vehicle and be debt free for a while, even if it means higher monthly payments for the first few years?
  • What will be your likely financial position at the end of the lease or loan period?
  • These days there are no risks of major repairs because all new cars have extended warranties of 3 – 5 years and a minimum of 100,000 kilometres on the speedometer.

 

I conduct plenty of business from home, what expenses can I claim?

Where a self-employed taxpayer uses part of their home to conduct of a business, they are entitled to a partial deduction for the outgoings which relate to the use of the home for the work related activities. These include heating, lighting, rates, insurance, mortgage interest/rent, house and contents insurance, repairs and maintenance and telephone rental. The portion of outgoings deductible is based on the percentage of the total area of the home used for the business.

I have heard that your provisional tax can be calculated based on the GST you are paying. How does this work and should I be doing this with my business?

If your residual tax liability is between $2,500 and $150,000 and you are GST registered (either 1 or 2 monthly) you may be able to use the GST Ratio Method for calculating provisional tax.

Advantages of the GST Ratio Method;

  • You will no longer be subject to Use of Money Interest
  • Your income may be seasonal. This method matches tax payments to gross income declared hence allows better cash flow management.

Disadvantages of the GST Ratio Method:

  • It means making six payments of provisional tax rather than the standard three.
  • There’s a potential to overpay if asset sales are not adjusted for in the GST return

Before you make any decisions on whether this option has benefits for you, we recommend that you discuss this with us.

Can I pay my spouse a wage for the work he/she does doing the books?

If you are a sole trader, no deduction is permitted for wages paid to a spouse, unless the Inland Revenue Department consents in writing to that deduction. There are no special rules for payments to spouses if you are trading as a partnership, trust or company.

I’m starting out in business. What business structure should I trade under?

There are four main structures used to operate a small business.

These are:

  • Sole Trader
  • Partnership
  • Company
  • Trust

The type of business structure you choose will affect your taxation position, your personal legal liability, the life of your business, and the availability of capital to establish and operate your business. It is therefore important to make the right choice.

Contact us to discuss which is the right option for you.

I seem to be paying high ACC levies. How can I lower these?

We recommend all clients should look very closely at their ACC premium invoices. We commonly find that changes should be made and often these will reduce the ACC premium.

Key areas to look at are:

    • Is your business classification code correct? ACC uses 539 classification codes. They attempt to rank the risk potential of each business. A “very risky” business e.g. helicopter pilot will have a very high premium.
    • Are you classified as part or full time? This will apply to small businesses operating as sole-traders or partnerships.
    • The most common ACC premium is called ACC Cover Plus. There is another alternative premium available to the self employed called ACC Cover Plus Extra. This calculates the ACC premium based on an agreed cover rather than your taxable income. Many self employed people can lower their premium if they choose this alternative.

Contact us if you want to know more.

What People Say About Us

Ian Gundensen 
Ian Nicholas and his team at "The Accounting Room" have been our accountants for 10 years simply because we believe they are the best for our situation. We learnt many years ago that to be successful you need a good team around you.

We needed someone who would listen, treat us as a person and not just a number. Above all someone who had the knowledge, skills and professionalism to help us achieve our goals.

Marion and I appreciated the advice they gave us when we set up "The Gundy Development Company" and we have no hesitation in strongly recommending their services to anyone who requires professional guidance with such complexities as taxation.


Ian Gundesen - Director. Author, Inventor, Licensed Auctioneer.



During the 3 years I worked out of NZ, Ian and the team from the Accounting Room kept me right with the New Zealand tax laws. The Accounting Room team worked closely with my Australian tax accountant and between them I was able to minimise my taxes. I found them to be a very professional team and would have no hesitation in recommending them as the accountants of choice.



Sandy Mutch - A B MUTCH CONSULTANCY PTY LTD



4 seasons
|| www.4seasons.co.nz ||

We have been clients of The Accounting Room (formally Everest and Vincent) since we purchased our business 10 years ago. As first time business owners we needed an accountant who would explain things in language we would understand, someone we could trust 100%. We found that and more with the staff at The Accounting Room, especially Anthony Vincent who has and still does look after us. Anthony is our accountant but we also regard him as a friend. Nothing is ever too much trouble for Anthony or any of the staff and when you call you are always greeted warmly. Without hesitation we have and would recommend The Accounting Room and wish the team every success in their endeavours.


Glynn and Debbie Taylor - Owner operators - 4 Seasons NP Ltd



Therapy Works
|| www.therapyworks.co.nz ||

Therapy Works has worked with Ian and The Accounting Room from the outset of starting up our business just over 10 years ago. We have greatly valued his advice and expertise in ensuring our financial systems are both efficient and easy to understand. Ian’s high standard of professionalism and attention to detail cements our high level of trust with the company. We look forward to an ongoing working relationship and have no hesitation in recommending The Accounting Room to other businesses!


Michelle McIntosh – Therapy Works Ltd



Guize Clothing
|| www.guize.co.nz ||

I have been a client of Anthony Vincent and the team at “The Accounting Room” for many years. I have found there financial scrutiny and customer service to be second to none. They are very approachable any time of the day whether to obtain advice or just to clarify taxation queries. I have found them to be very knowledgeable within their field and always up to date. Their manner is always professional and courteous. I am very happy to have Anthony and the team working for us, and look forward to many more years of this working partnership.


Brett Stokell – Managing Director – Guize Clothing Ltd



CSA Surfboards
|| www.csasurfboards.co.nz ||

The Accounting Room save our company time and money – just what you want. We are grateful to have an accountant that is up-to-date with technology, approachable, prompt and a clear communicator. We are a small business but Ian gives us the time, advice and respect to be big.


Bianca Aldridge | CSA Surfboards



The Cleaning Angels
|| www.angelswhoclean ||

I would highly recommend Anthony Vincent and The Accounting Room team to anyone needing accounting services. Anthony has helped my business grow and has been there for me anytime I had queries. Anthony is kind, patient and genuinely wants to help. All the staff I have encountered at The Accounting Room are like this, very helpful and genuine people who all do an extremely good job.


Glenwyn Flynn – The Cleaning Angels



Brokers Panel & Paint
|| www.brokerspnp.co.nz ||

The Accounting Room are a very professional and helpful group of people to deal with. When I started my business I had no knowledge of accounts or any of the processes involved in running the financial side of a business. The Accounting Room made this learning period very simple and were always available to explain and help me to learn. Now that my business has grown they are still helping me with new advice to help continue the growth of my business.


Kurt Broker – Owner/Manager , Brokers Panel and Paint Ltd