Benefits of using a Chartered Accountant

Benefits of using a Chartered Accountant

Chartered Accountant (CA) is a prestigious professional designation that recognised around the world. There are strict requirements to become a member. Being a Chartered Accountant means that someone has completed a significant amount of study and work experience, which usually takes at least 7-10 years.

CA’s are known for their high ethical standards and technical expertise, with on-going learning to ensure that they are up-to-date with current tax and business developments.

Chartered Accounting Firms
JZR Accountants & Consultants is a Chartered Accounting firm, and are recognised as such by Chartered Accountants New Zealand and Australia (CAANZ). We are also an approved training organisation by CAANZ.

The implications of entrusting your financial affairs to an accountant that does not have the necessary competence and qualifications can be enormous and can be the difference between your accounts being handled professionally and above board, versus you being disadvantaged through lack of knowledge or care.

Some great advantages include:
1. Reliable Advice – When it comes to your finances, you need to know your money is in safe
hands – CA’s must comply with professional development standards, ensuring their knowledge and skills are always kept up-to-date and gives you the reassurance that the advice you are receiving is both accurate and informed.

2. Highly Regulated – You’ll benefit from professionally qualified persons that are bound by a strict code of ethics and professional standards. They also undergo monitoring of compliance and quality reviews of their professional practice.

3. Highly Experienced – To qualify as a CA, you will have gained a vast amount of experience
and will be comfortable working with high performing businesses as well as those under
financial pressure. CA’s are required to put in considerable hours of hard work and in addition to being tertiary qualified, take many official exams in order to get certified after university. There is then another level of competence to offer services directly to the public. That’s a lot of time spent honing their craft.

4. Integrity – Your accountant will be dealing with your business finances (and likely your personal information too) so you need to have confidence that they can be both trustworthy and discreet. CA’s are bound by a strict code of ethics to uphold a set of professional principles, endeavouring to always put their clients’ interests above their own.

5. Peace of Mind – To focus on your responsibility as a business owner and to make sure that your financial affairs are in order can take a big chunk out of your time. So, get back to the fun stuff and hire a CA to take care of the number crunching for you.

 

Qualified Tax Professionals
Hiring a qualified accountant such as a CA is crucial for small as well as large business owners. CA tax professionals bring profitable results to the company and also deals with complicated tax issues.

Income tax matters hold a crucial place in the business. Slight negligence can put into great trouble. So, it is a better decision to hire a good CA to managing all your tax matters.

Doing income tax filing by yourself will waste precious time and as the deadlines of income tax filing come near, it then becomes difficult for you to find the correct tax figures resulting in a lot of confusion. We at JZR Accountants & Consultants are also registered tax agents with the IRD, which means that we can help to reduce your stress and look after your income tax filings.

Extension of Time (EOT)
Being a registered tax agent also means that all our clients receive what’s called “an extension of time” with the IRD.

Extension of time arrangements means tax returns and terminal tax payments can be made at a later date than normal. We have set out the details below.

Tax returns due:

  • Normal – 7 July in the same year (e.g. 31 March 2019 year end due 7 July 2019)
  • With EOT – 31 March the next year (e.g. 31 March 2019 year end is due 31 March
    2020)

Payments due:

  • With EOT – 7 April the next year (e.g. 2019 end of year due 7 April 2020)
  • Without EOT – 7 February the next year (e.g. 2019 end of year due 7 February 2020)

By having an EOT is very beneficial especially for the purpose of a business’s cashflow.

 

Tax Laws
CAs practicing in the area of taxation (such as JZR) knows all the latest updates of income tax. Furthermore, they also help you in getting the correct amount of tax refunds or make sure the right amount of tax is paid. Not more than what the law stipulates, whilst upholding strict ethical standards and adhering to all laws and regulations.

Being a small business owner, it becomes difficult for you to know all the changing and updated laws of taxation and a CA will inform you of all the updates in the field of taxation. This will help you to stay on the right side of the law.

 

Liaison with IRD
Liaison with the IRD is a regular process irrespective of whether it is a small or large business. Every now and then the IRD request additional information or make enquiries about certain tax related transactions.

It sometimes feels that the IRD is speaking in another language, full of jargon and sometimes not a lot of business sense, so your CA is well prepared to liaise with the IRD by way of acting as a go between, whilst adding their experience to get you the best results.

 

 

If you want to work with a Chartered Accounting firm that are experts in their field and are
dedicated and cares about your business, then please do not hesitate to contact us for an
obligation free chat. We look forward to speaking with you.

Written by Johan Potgieter

January 23, 2020

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Tax Types you need to know if you’re a business owner

Tax Types you need to know if you’re a business owner

Taxation is usually a complex subject. So, as part of our New Years present to all of you, we thought we could simplify the different tax types.

Some of the most common taxes are as follows:

Income Tax

Income tax is payable on profits for businesses and on personal income earned by
individuals. The rates of tax that applies depends on the type of entity or if you are an
individual.

Companies and Trusts pay tax on income at a rate of 28% and 33% respectively whereas
individuals pay tax at the marginal rates between 10.50% and 33%.

End-of-year tax (this is also known as terminal tax) is payable before 7 February the
following tax year, or 7 April the following year if you have a tax agent.

Provisional Tax
Provisional tax breaks up the income tax you pay to IRD by letting you pay it in installments during the year as opposed to one big sum at the end of the tax year.

Any taxpayer – whether they be an individual, company or trust – who earns income where tax is not deducted when it was received like self-employed or rental income may have to pay provisional tax.

You become a provisional taxpayer if the income tax due for the previous year (this is known as your residual income tax) was more than $2500. There are some other rules that applies to first year of business.

The payment is based on the provisional tax method you’ve chosen. There are four methods available to calculate your payments: Standard uplift, estimation, GST ratio method and the accounting income method (AIM).

In most cases, you will pay three installments of provisional tax throughout the year: 28
August, 15 January and 7 May, However, this may vary depending on the calculation
method and how often you file your GST returns.

The calculation methods, dates and provisional tax rules will be discussed in more detail in
more blogs to come.

Goods and Services Tax (GST)
GST is a tax on most goods and services supplied in New Zealand by registered persons. It
also applies to most imported goods, and certain imported services. GST of 15% is added to the price of taxable goods and services. If you're a GST-registered business, you pay GST on your supplies and collect GST on your sales. The difference between these two is what you pay to Inland Revenue.

You are required to register for GST if your turnover was more than $60,000 (average
$5,000 per month) for the last 12 months or expected to exceed that amount in the next 12 months.

There are 3 methods of accounting for GST: Payment, Invoice and Hybrid basis of which the payment basis is the most common and the filing frequency for GST is monthly, two and six monthly. The method and filing frequency are subject to rules that apply based on turnover.

Pay As You Earn (PAYE)
Employees earning a wage or salary are taxed directly from their pay. This is known as
PAYE (pay as you earn).  As an employer, you’re responsible for deducting and paying
PAYE on your employees’ behalf.

Different rules can apply to some payments, eg. lump sum payments like bonuses or
redundancy payouts, or to special types of workers. The amount of PAYE you deduct
depends on the employee’s tax code and how much they earn.

Each pay period you need to calculate and deduct PAYE. Each payday you send Inland
Revenue the pay details for your employees. This is called payday filing, and you can do all
of this directly from your accounting software (like SmartPayroll), or online through Inland
Revenue’s myIR service.

The easiest way to file your PAYE returns is to use a payroll software such as Smartpayroll.

Fringe Benefit Tax (FBT)
Benefits given to employees other than their salary or wages are fringe benefits which are
levied on the value of the fringe benefit provided to employees.

The main groups of taxable fringe benefits are:

  • motor vehicles available for private use
  • Free, subsidised or discounted goods and services
  • Low-interest loans
  • Employer contributions to sickness, accident or death benefit funds, superannuation
    schemes and specified insurance policies.

You’ll have to file an FBT return either quarterly or annually, depending on the election
made.

FBT can be calculated at 49.25% single rate (flat rate), or at multi rates depending on the
income of the employees.

FBT is tax deductible by the employer as an expense in their income tax return.

Written by Johan Potgieter

January 21, 2020

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