Edmonds Judd

business

Postscript

Claiming legitimate business expenses

With the recent media coverage about the claiming of business expenses, we thought it timely to remind you to always keep in mind what expenses are tax-deductible and what are not.

expenses

If you’re self-employed, there is very useful information here at Business NZ: https://bit.ly/31WdFgS

For those of you who work in a corporate environment, your organisation will no doubt have an expenses policy to ensure all claims are legitimate.

Continue reading


Risk of hefty penalties if you don’t

There are plenty of war stories about recordkeeping blunders. Think of offices crammed with paper, ‘lost’ documents, fireplace filing systems and online voids.

Section 194(1) of the Companies Act 1993 requires boards to keep correct accounting records. Records are supposed to ‘speak for themselves’[1] and allow the company’s financial position to be determined at any time with reasonable accuracy. Failure to keep proper records can badly hurt your business.

Continue reading


Guest editorial: Kirsten Patterson,
CEO, Institute of Directors

The damage from governance failure can be profound, and can attract significant unwelcome media and public scrutiny. Focusing on the learnings from these cases is how we can get some real benefit and continuous improvement in corporate governance.

 

He tāngata – it is the people

Governance is, above all, about people. It’s a team game and, like any team, the board’s composition, and its culture and dynamic, are all critical to its effectiveness. Boards need a broad mix of skills and experience now and for the future. Individual attributes of directors are also highly relevant such as integrity, courage, judgement, emotional agility, energy and curiosity. Other factors relating to board composition include diversity, new membership and tenure. Getting the right mix and balance can be as much art as science. Putting time and thought into developing a skills matrix to determine the board’s needs is worth the investment.

Continue reading


Emissions Trading Scheme

Implications for owners of forestry blocks

New Zealand’s Emissions Trading Scheme (ETS) was established by the Climate Change Response Act 2002. The ETS was created as the vehicle for New Zealand to meet its obligations for the reduction of greenhouse gas (GHG) emissions under the Kyoto Protocol. The purpose of the ETS is to achieve a reduction in GHG emissions through emissions trading. Emissions trading is the exchange of carbon credits between those parties with surplus credits and those who are required to contribute credits as compensation for their production of GHG emissions.

Although the ETS affects nearly all New Zealanders in some way, it has significant impact if you are buying or selling forestry blocks, and/or own a forestry block. The first part of this article focuses on the implications of buying and selling of forestry lots, or land destined to be planted in forests. The second part gives you some background on the ETS, New Zealand’s obligations under the Kyoto Protocol and this country’s acceptance of the Doha Amendment. Continue reading


Business briefs

Mainzeal case – highlights director responsibilities

The recent high-profile Mainzeal case[1] has highlighted the importance for directors to know and understand their duties under the Companies Act 1993.

Four of Mainzeal’s directors were found liable for $36 million in damages for breaching section 135 of the Act which is headed ‘reckless trading’. This section prohibits directors from agreeing to cause or allow the business of the company to be carried out in a way that is likely to create substantial risk of serious loss to the company’s creditors.

Continue reading


PPSR lease losses

Can be a real risk for business

When the Personal Property Securities Register (the PPSR) was established in 1999, most businesses were quick to catch on that it was a good idea to register security over goods that were sold under a line of credit. What wasn’t so easily recognised is that the register was designed to also capture leases of goods that are indefinite or extend past one year.

Businesses that frequently lease goods, or provide hire purchase arrangements, with the intention of remaining the true owner of the goods leased, do not always register their lease on the PPSR. They believe it to be an effective means of security that they retain legal ownership of the goods. This ownership can, however, be defeated by a registered interest on the PPSR and result in significant loss to their business.

Continue reading


As expected the government’s The Wellbeing Budget, presented by the Minister of Finance, the Hon Grant Robertson, on 30 May focussed very much on mental health and child wellbeing.

The wider economy was looked after with increases in funding to KiwiRail, the establishment of a new venture capital fund, investment in science and research, and so on.

wellbeing

The government has indicated that New Zealand’s economy is in good shape, despite some softening of the global economy.

Continue reading


Over the fence

Minimum wage review 2019

The government reviews the minimum wage each year.

On 1 April 2019 the adult minimum wage will increase from $16.50/hour to $17.70/hour. The starting out and training minimum wage will increase from $13.20/hour to $14.16/hour. The government has also set indicative rates of $18.90/hour from 1 April 2020 and to $20.00/hour from 1 April 2021. These rates will be subject to each year’s annual review.

minimum

We recommend you review all wage and salary structures to ensure your employees are paid at least the minimum wage at all times for hours worked.

Continue reading


Review due in May

The National Environmental Standards for Plantation Forestry (NES-PF) were first proposed in 2010. Following a period of consultation, the Standards came into effect on 1 May 2018, with a review due in 12 months after that (May 2019) to ascertain whether or not they are being successfully implemented.

Forestry

Ironically, the NES-PF came into effect a month before torrential rain north of Gisborne in the Tolaga Bay area in June 2018. This storm caused flooding which led to tonnes of forestry debris being strewn across farms and blocking rivers. The cleanup was expected to cost around $10 million and to take up to a year to complete. The cost and responsibility for this cleanup is still being determined.

Continue reading


Business briefs

Directors have personal liability for company debt in liquidation

A recent decision in the Court of Appeal[1] has made a director liable for almost $500,000 of company debt due to the company’s failure to keep adequate accounting records. The decision highlights the importance for directors to understand their duties under the Companies Act 1993. The Act requires directors to ensure that the company keeps proper financial records.

If you are a director and fail to keep adequate accounting records, and the company is unable to pay its debts in liquidation, then the court can make you personally liable if the failure has resulted in:

Continue reading