Welcome to the Vision Accounting e-newsletter for December 2015. Another year has gone by, it has been a busy year with lots of positive moments, we hope you have had a similar year.
What's very important
Do you have back up?
‘Tis the season to … do some network housekeeping. What would you do if the unexpected happens while you’re on the beach giving it some Christmas cheer? There’s a blackout, your laptop is stolen from your car, or downloading someone’s dancing turkey video has infected one or more computers on the network with a virus? A backup plan takes it from what could be an utter disaster to somewhere on the inconvenience scale.
Even if you don’t have a rolling contract with an IT provider, it might be worthwhile for peace of mind to have them audit your system and review your IT plan. It should cover backup for all data and files and protection for viruses and malware. It can also be good to have clear protocols for all users so they don’t put the business at risk by failing to backup key files or unwittingly attracting a virus.
Start the holidays with peace of mind and come back in the new year with all systems go.
Network health check
- Do you have protection from viruses and malware? Is it up-to-date to carry you through the holiday period?
- Do you have a routine backup of data and files? If you backup to external disk or tape, does this include all shared drives or just some? What happens with your laptops? Do you need to make sure you and team are saving to the shared drives and not leaving critical files or the latest versions in their My Documents folders? Are your backups stored securely off-site?
- If you have cloud data backup, does it cover all cloud data and desktops? Do you need to synchronise office laptops and hard drives to your cloud storage? If so does this happen automatically whenever users log into the network or do all users need to follow a manual process?
- It’s important to have some kind of rolling plan to replace out of date equipment. Even if your computer setup isn’t all absolutely up to the minute, it should at least be up to the operating requirements of the applications you need to run your business. If you’re largely operating in the cloud, hardware capability (and internet speeds) should be such that it doesn’t slow you and your team down whether downloading, uploading and just getting things done. Give some thought to whether this should be a priority.
What's very handy?
I recently had an extremely informative meeting with Doug Warren from HiFX Currency Services. I am always on the look-out for interesting and useful services for my clients, and as such encountered Doug. He has kindly provided me with a little graph which show the latest weekly exchange rates just from the last fortnight, to give you an indication as to the volatility of our NZ dollar. For those of you that have to contend with foreign currency transactions on a regular basis, perhaps give a thought to using a company such as HiFX Currency Services to assist with ensuring that you have the best exchange rate and funding option available, as there appears to be a bit of disparity between the various service providers.
What you need to know
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
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 Fringe Benefit Tax (FBT) on such gifts.
If you provide other types of goodies, like accommodation in a holiday home, use of a corporate yacht or lunch at a restaurant, then these come under entertainment expenses – and are 50% deductible as long as they’re business expenses.
Business entertainment rules are outlined in the IRD’s Entertainment Expense guide (IR268) plus see our website and select 'Gift Duty'
If you give your employees some sort of entertainment – like a voucher to use at any time – you may need to pay FBT. There are detailed rules about FBT, including for entertainment expenses. There are some thresholds, so you may not always have to pay FBT if you only provide minimal fringe benefits. If you need more information access our website under Tax – and select the 'Fringe Benefit Tax (FBT)' tab.
If you provide Christmas food and drinks at a local venue, the cost is not subject to FBT – because employees can’t choose when and where to enjoy the benefit. However, the rules for entertainment expenses still apply.
If you give employees vouchers for entertainment, meals or gifts and the employee can choose when or where to enjoy the benefit – and you’re not giving the benefit as a necessary part of their work duties – then these are subject to FBT.
Confused? Please don’t be, just jot us a line via email about your specific situation and we will clarify it for you.
Vision Accounting Christmas and January Closure
Our last working day will be Tuesday 22nd December, returning to work on Monday 18th January 2016.
Safe and Happy Holidays
On behalf of all the Vision Accounting Team – we would like to wish you and your families a very happy, safe and fun filled Christmas and New Year. Enjoy the holiday time with family and friends, and we look forward to working with you in 2016. Remember we are in the office until the 22nd December, so here if you need us – just give us a call...
We offer the service of a one on one meeting to review your financials and help set you up for a strong 2016.
This one meeting can make a huge difference to the cashflow and profit of your business.
If you would like to schedule a business review meeting, or have a no-obligation chat – we’re happy to help.
Thanks, and have a great month,
Virginia and the team at Vision Accounting
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