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Welcome to the first issue of our
Beyond the Numbers newsletter

As directors of Carey Smith & Co (from left to right Murray, Prue and Bryce) we’re keen to share information that will help you navigate developments affecting your personal and business finances, so we’ll be putting together newsletters like this regularly. Please let us know if there are any particular topics you’d like us to cover in future issues of Beyond the Numbers.  Upcoming Events - Register online or phone Astria on 06 345 8179  Over the next few months we will be offering the following seminars on topics that we're sure you will find interesting. We'd love you to join us at our office for drinks and nibbles and an informative presentation, with the opportunity to have your questions answered: Trusts - is a trust right for me? An open evening for parents and students - what would a career in accounting be like? Economic Update - what's happening out there and how does it affect me? Please register online if you are interested in attending any of the seminars listed or if there are other things you would like to discuss in a workshop setting. We'll email you with dates and further details nearer the time.

Introducing our new General Manager  Sonja Loveridge joined us in November 2009 so we could spend more time with clients. It's been a positive move for the practice and we have all benefited from Sonja's fresh approach and energy. As a Chartered Accountant with management experience in both the public and private sectors Sonja has hit the ground running and challenged us in all sorts of ways. Sonja's appointment is part of our strategic plan. It was time to hand over the day to day management and together we are defining and refining our goals for the future.

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Carey Smith & Co Ltd, 162-166 Wicksteed Street, Whanganui
and now on the web...

We're  pleased to announce the launch of our new website. The online services available to you at http://www.careysmith.co.nz include the following sections:

• Key Dates - to help you keep track of important dates and deadlines
• Tax Facts - where you can learn more about tax requirements 
• A Secure Area to make it easier for you to provide us with your bank transaction details or view your financial statements via your own password protected secure area. This way you no longer need to install BankLink software on your computer or transfer files... all you need is access to a computer with an internet connection.

• Book an Appointment - so you can organise an appointment with Murray, Bryce, Prue or any of the team at any time of the day or night via our online appointment form.

Please contact us if you'd like to know more about how your own login and password can work for you, or whether online access to BankLink would suit you. We are also able to offer MYOB software and Xero (on-line), so talk to us about how to make the internet work for you and your business. 

If you have any questions, comments, or suggestions please contact us at any time. We'd love to hear from you!

If you have family or friends who might like to receive our informative newsletters, please forward this issue of Beyond the Numbers to them and suggest they visit our website to subscribe.

Sonja Loveridge
General Manager

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The biggest changes to the tax system for 20 years

GST GST will increase from 12.5% to 15% from 1 October 2010. To raise awareness in the community, and especially among businesses, IRD will run a marketing campaign and will hold various community seminars in the lead up to the change.

Specific issues that may require a discussion to ensure all the implications have been taken into account are:

• De-registering for GST and retaining assets personally
• Decisions regarding the sale or purchase of major assets
• Delayed settlement of property transactions.

Some points that may help you:

1. The tax fraction will change - instead of using 1/9 to calculate GST on a gross figure, you will need to use 3/23 (just multiply the GST inclusive figure by 3 then divide by 23 to get the GST content); e.g. For an item that costs $115 inclusive of GST: $115 x 3 /23 =$15 GST.
2. GST returns that span the change over period, for example a return for September-October, will be completed in two parts and the figures for both months will be combined. The IRD will automatically send out the correct return for your circumstances.
3. One-off rate change adjustment - If you are on a payments or hybrid basis, you'll need to complete a rate change adjustment form. To complete this adjustment form you will need to calculate your debtors and creditors at 30/9/2010. This rate change adjustment is important as it will save you money (assuming your debtors total more than your creditors). There is a short time frame to work this out as the return will still be due as early as 28/10/2010.
4. Invoicing for September work - It will be important to complete invoicing for September work as quickly as possible. These invoices must be dated September, completed before 11 October, and be due for payment within 60 days - otherwise you will be liable for GST at 15% on this income.

Other things to consider for a smooth transition to the new rate:

• Advise the banks to update Automatic Payments or Direct Debits for the new rate
• Pre-pay certain annual bills, rather than paying by instalments, if you are not GST registered (e.g. rates)
• If you own commercial rental properties you need to advise your tenants of the new payment amount and issue updated tax invoices showing the new GST rate
• Plan the changes to retail prices to adjust for the new rate 

If you need any help with GST planning or return preparation, please call us.

Other Changes on 1 October 2010

PAYE rates
Personal tax rates reduce from 1 October 2010 so please ensure you use the new rates. The IRD have advised they will send out a revised PAYE tax tables booklet. For those using on-line tables these will be adjusted on 1/10/2010. If you use a computer based payroll system, ensure this is updated by your software supplier.
The new income tax rates will apply to PAYE for the first pay period that ends on or after 1 October 2010. For pay periods that span the 1 October date and are for a month or less, PAYE will be deducted at the new rates. Please call us if you have any queries.
 

	Old tax rates applying to PAYE for the period 1 April 2010 – 30 Sept 2010	New tax rates applying to PAYE for the period 1 Oct 2010 – 31 March 2011
$0 – $14,000 $14,001 – $48,000 $48,001 – $70,000 $70,001 and over	12.5% 21% 33% 38%	10.5% 17.5% 30% 33%

 

 

 

 

 
FBT
The Fringe Benefit Tax flat rate changes from 61% to 49.25%. The alternate fringe benefit rates for the year ending 31 March 2011 have changed in line with the composite tax rates. Talk to us if you have any queries.

Provisional Tax 
With a change in income tax rates your upcoming payments of provisional tax will be marginally reduced compared to the figures you have been advised with your annual accounts. We will provide updated payment slips prior to your payment due dates.

We hope you have enjoyed your first copy of Beyond the Numbers and that you find the information helpful. Remember to visit our new look website at www.careysmith.co.nz and call the office on 06 345 8179 if you'd like to know more about any of the topics we have covered here or wish to make an appointment to meet with one of our partners. At Carey Smith & Co we believe there's more to life than death and taxes (with apologies to Benjamin Franklin)...and we offer much more than just tax advice.  Murray, Bryce and Prue Directors