Campbell Tyson Blog

Stephen Lynch from Results.com has a great strategy he uses to ensure when he is meeting with a team member, its a productive discussion:

As a leader, you want to encourage your people to think though the issues first, and make good decisions themselves.  Alternatively, if it is a situation where they really do need your input or sign off - you want them to present all the options along with their thoughtful recommendation as to what the right decision should be.

I recommend training your people to use GROW framework to think through the issues – and even have them present issues to you in this manner.

G = Goal

What is the goal?  What is the outcome we want to achieve here?

R = Reality

What is the current reality?  What is happening and why?

O = Options

What options do we have?  What are the implications of each option?

W = Will

What WILL we do?  Here is my recommendation

Yes, things may take longer to resolve initially – but you must be disciplined if you want to stop getting sucked into “reverse delegation.” Push back, and tell your people to go away and present their issues to you in this manner until it becomes their new default behavior.

In effect, you are now learning to delegate more effectively.  You GROW your people by making these situations a valuable coaching opportunity – with the intent to teach your team how to problem solve and make great decisions without you needing to be there all the time.

Simple, but you can see how it would be effective.

Till next time.

Hi there

Lovely weekend to be indoors.

There was a recent case through the courts in respect of record keeping (or the absence of it) for IRD purposes.  Here's a summary:

Commissioner’s default assessments confirmed, 12 July 2012

In a case where a taxpayer did not keep useful or complete records and failed to file income tax and GST returns, the Taxation Review Authority (TRA) has held that the Commissioner’s revised schedules were the most reliable reconstruction allowed by tax law and confirmed them as the new assessments for the years in dispute.

Background

The dispute concerned the tax liability of the taxpayer for the years ended 31 March 1995 through to 31 March 2000 and GST assessments for GST periods falling between 1 April 1994 and ending on 31 March 2001. During the course of the hearing, the Commissioner accepted some amendments to the assessments based on new evidence produced by the taxpayer in the course of the hearing.

At material times, the taxpayer was a property developer with various other sources of income from dealing in motor vehicles on a part-time basis and taking on residential boarders.

The taxpayer did not keep adequate business records in accordance with s 22 of the Tax Administration Act 1994 or s 75 of the Goods and Services Tax Act 1985. He did not keep a cash book, a note book, journal or balance sheet. In this respect he was operating in breach of his obligations as a business taxpayer under the Tax Administration Act. He also failed to file timely tax returns.

The Taxation Review Authority

The TRA noted that in the absence of business or personal records over material times, it was very difficult for the taxpayer to prove the ingredients of the Commissioner’s assessments to be wrong on the balance of probabilities. The taxpayer’s difficulties were also exacerbated in this challenge by the delays occasioned by him failing to prosecute the case in a timely manner.

The TRA found that apart from specific examples where documentary proof had been provided or where the TRA had particular views, the taxpayer’s evidence was too unreliable to be accepted. The TRA said that there was no room for “reconstructions” and “guess work” in taxation. The taxpayer had failed to comply with the statutory duty placed on business taxpayers by the Tax Administration Act to keep accounts.

The TRA accepted that the assessments represented an honest attempt by the Commissioner to arrive at the amount of taxable income and the amount of tax due by the taxpayer for the income years in question. The taxpayer’s challenge was dismissed.

Case 1/2012 TRA [2012] NZTRA 01, TRA 148/04, 2 July 2012.

Morale of the story, make sure you keep adequate records for the time required, or the IRD has practically  the right to state the facts.

Till next time.

Hi there

This link will take you to a summary of a most excellent seminar that Campbell Tyson put on with BNZ, Perceptive and Co.7

Enjoy!  http://youtu.be/vuIYO8sicPA

Till next time.

I'm married to a teacher and so have been very close to what has been going on in the media as a result of Budget changes for schools.  I must say, I really feel for the schools.  As Gary Sweeney alluded to at a recent NZAIMS conference, the current issue is not about Teachers wages or contracts, it is about budget cuts affecting their ability to do the job they were charged with - teaching children.  It appears that Intermediate schools will no be doing everything they can to voice their displeasure and bring pressure to bear on the Ministry.  I believe this is a sensible approach to highlight policy decisions that will have a negative impact on what must surely be the most important thing we do as a country - the education of our future generations.

What saddens me is that there is no discussion around what other areas could be cut back.  Balancing a budget as a country is vital.  Just look at Ireland, Greece, Spain and Portugal to see what happens if you throw caution to the wind and borrow to fund a lifestyle beyond our means.  We have short patience for any one who does it personally, let alone a country that should know better.

Fine, campaign to stop the attempted $43million savings the Government are pursuing in a admirable attempt to balance the budget, but rather than whinging with your hand out, say what you are willing to give up to make it possible.  Suggest the areas that the Government could save money to offset the Educational Spending.  To the protesters, contribute more than clever banners and poorly sung Pink Floyd songs.  Start some meaningful dialogue rather than singing rhymes.  Show some of the maturity you are supposed to be passing on to the youth you are seeking to protect.



To avoid being a hypocrite, I should say what I would do.  What about:

• Treating prisoners in Prison as though they are there to be punished.  Drop the perks provided (under-floor heating, personal TVs, etc.) that would be denied to our Elderly in their homes

 

• Get rid of Tertiary Institutions that teach no courses of value (and "steal" funding from those that do)

 

• Get rid of funding for PC initiatives that bring no value other than promotion of "diversity" in society - if they were so valuable we would be doing it ourselves

 

• Remove the option of being a beneficiary as a lifestyle choice (I have a wonderful view of the Pukekohe Courts, and I can see where your tax-payer dollar is going)

No I don't have a perfect answer, and I know there are people who would take exception to my suggestions above, but for us to be a country that is proud of the way we teach our children, we still need to balance our budget.

Till next time.

Had a bit of a break from social media due to moving residences.  Thought you might all be interested in this little graphic, given what is going on in Europe at the moment.

Thanks to Dean Edgerton at the ANZ!

Till next time.

New minimum wage rates take effect from 1 April 2012. The new adult minimum wage rates (before tax) that apply for employees aged 16 or over will be:

· $13.50 an hour, which is

· $108.00 for an 8-hour day or

· $540.00 for a 40-hour week.

The new minimum wage rates that apply to new entrants and employees on the training minimum wage (before tax) will increase to:

· $10.80 an hour, which is

· $86.40 for an 8-hour day or

· $432.00 for a 40-hour week.

Record keeping is very important regardless. To cover potential claims, questions and audit, you need to:

1 Keep worked time records. This is a legal requirement and ensures you know how many hours everyone is working.

2 Ensure that in any pay period the salary amount paid to your staff member meets the minimum wage rates above.

Till next time.

For those of you with a standard balance date (31 March), we have the financial/tax year end coming up fast.  The following are a number of ways you can legitimately manage your tax position.

1. Consider prepaying certain expenses - Some expenses can be prepaid in March and claimed as a tax deduction in the year to 31 March 2012, regardless of their amount.  These include stationery, postage and courier charges, vehicle registration and road user charges, rates, subscriptions for papers or journals, and even audit and accounting fees!Other expenses have limits on the extent to which they can be claimed if prepaid.  These include rent, consumables, insurance premiums, professional or trade subscriptions, travel and accommodation, advertising, periodic charges and other services.  The rules surrounding prepayments are quite complex, so if you’re planning this type of expenditure, please contact us.


2. Trading Stock- Trading stock (excluding livestock) must be valued at the lower of cost or realisable value.  General adjustments for obsolete stock are not acceptable to Inland Revenue.  It’s important therefore to perform a physical stock take at year end and actually dispose of any obsolete lines or alternatively write that stock down to its net realisable value.Clients with an annual turnover of less than $1.3m can value their closing stock at the opening stock value, but only where closing stock can be reliably estimated to be less than $10,000.


3. Loss offsets and subvention payments - 2011 loss offset or subvention elections must be filed with IRD on or before 31 March 2012.  Subvention payments relating to the 2011 income year must be paid by 31 March this year.  The IRD changed its practice of requiring an actual physical payment, and now accepts that a subvention payment can also be made by book entries so long as the payment obligation is discharged. 


4. Write off any bad debts - To claim a deduction for a bad debt you need to physically write the debt off in your debtors’ ledger prior to the end of your financial year.  For most clients that’s 31 March 2012.  There should also be evidence that you have taken reasonable steps to recover the debt prior to writing it off.


5. Employee expenses - Any amounts owing to employees at year end (such as holiday pay, bonuses, long service leave, redundancy payments) can be claimed for tax purposes in the current year as long as they are paid within 63 days of balance date.


6. Review last years fixed asset register - The book value of assets can be written off for tax purposes if the asset is no longer in use by the business, the business has no intention of using that asset in the future and the cost of disposing that asset is expected to be greater than the proceeds from its sale.  Actually, it’s simpler than that.  Scan your asset schedule from last year’s accounts and you’ll probably notice assets that no longer exist (the mobile phone that you dropped in the tide at Christmas time), or simply don’t work.


7. Retentions - Retentions on building contracts are generally taxable in the year the contractor becomes legally entitled to receive them.  This can result in significant deferral of income.


8. Discount Reserves - A deduction for a discount reserve, to cover for example prompt payment discounts, is allowable where debtors are entitled to such a discount.  In the first year a deduction of the actual discount percentage is allowed and in subsequent years a calculation is made to maintain the discount reserve at that percentage level.  If the credit period offered to customers exceeds 93 days, different rules apply


9. Repairs and maintenance - General adjustments for repairs and maintenance reserves are not allowed as a tax deduction.  Instead it may be worthwhile to undertake any necessary repairs and maintenance on key assets prior to the end of the financial year to ensure a full deduction.  Deciding whether expenditure on an asset is deductible as repairs or maintenance or should be capitalised is not always cut and dried, so please contact us if you aren’t sure.


10. Imputation credits and dividends- Companies that have imputation credits for tax paid at 30% have until 31 March 2013 to distribute dividends with those imputation credits attached up to the previous maximum of 30:70.  But tax paid at 28% for the 2011-12 income year and onwards can only be attached at the new rate of 28:72.In addition, imputation credit account balances must not be overdrawn as at 31 March each year.  If so, they attract penalties.
    
    We realise the subject for imputation credits is complex for many of our clients.  Rest assured we will contact you regarding any necessary dividend and taxation planning before 31 March.


11. Income - Be sure to review any credit notes issued to customers following balance date that can be applied to the previous year, i.e. 31 March 2011.  In doing so, you will be entitled to effectively reduce your current year’s taxable income.

If you are uncertain on any of the above issues, or had a query concerning what you are able to do to plan for the year end, don't hesitate to drop me a line.

Till next time.

The cat is out of the bag. CTCW will no longer be CTCW on 1 April 2012.  Campbell Tyson will be the name replacing Campbell Tyson Cooper White, something Jacqui our receptionist is greatly looking forward to.  Have you ever heard someone rattling off a seven syllable name before she even gets to hers up to a couple of hundred times a day?  Exhausting!

It does raise an interesting point, how important is a name?  We believe it is very important for us.  Campbell Tyson celebrated its 90th birthday on 1 March 2012.  Admittedly, the name has changed many times over the years, but the Campbell name has been there longer than most.  That cornerstone name has provided the impression of gravity and stability that the firm has stood for.  The Tyson name has, through shared "real estate", taken the same connection.  The Cooper White aspect, not given up lightly, has contributed significantly to our culture, and while the names may not be on the letterhead, they still influence what we do and how we do it.

How will the name change affect what we do?  It won't.  We will still be striving to go beyond what our clients expect in terms of performance and service.  We will continue to be "thinking forward" rather than focusing on historical data, looking for opportunities for our clients.

You will no longer see a list of the Partners of the firm on our letterhead.  Our Team approach to supporting our clients means that everyone on our staff is integral to the service we provide.  Putting 56 names on our stationery would be over the top, however!

What you will see is different signage, different colours, a different motif and easier phone introductions in your dealings with Campbell Tyson.  Same great service!

Till next time.

When cash flow gets tight, we all look for ways to delay payments, use financing that is available, and do everything possible to ensure the business (and household) keeps on running.

Sadly, the IRD is sometimes seen as a potential financier.  In NZ we rely on self assessment, and the filing of returns is seen as something separate to the payment of the tax.  In my experience, some tax payers believe that this provides a possible avenue of funding when things get tight. 

Unfortunately, the cost of this "finance" is almost always the nail in the coffin for a struggling enterprise.  As the following graph indicates, your debt grows at a rate most likely faster than the profits you retaining the cash has created resulting in a bigger car wreck in the end.

 

 

 

 

 

From the graph you can see that sometime during the 3rd to 4th year, your debt will have doubled.  Thats expensive whatever way you look at it.

If you are getting in to difficulties with your cash flow, talk with your professional advisor about what you could be doing differently, the sooner the better.  If you are already behind with the IRD, get in touch with us and we can talk about strategies before things get out of hand.

Till next time.

Hard to believe six weeks of fantastic sport are almost over. The wait for the Rugby World Cup seemed so long and now we have the final being played tonight at Eden Park. I still remember the building excitement and euphoria of the first world cup in 1987, and the subsequent bitterness of defeat in the cups since. I never want to be a "good loser", but I do feel better equipped to congratulate the competition when they win. I hope this finely honed skill is not required tonight!

A personal gripe of this World Cup is the number of people out there whinging about how bad things are (Canterbury Earthquakes, Rena grounding, PSA, Global Financial Crisis, child poverty, etc.) and how we should be ashamed of being so focused on a sporting event. Without the richness of experience that sport and other pursuits give us we would all be lost in a cycle of continuing misery. I've always been a glass half full kind of person and while these events deeply sadden me, I would rather focus on the positives I see everywhere.

I've seen incredibly generous people opening their homes and wallets for those in need. I've seen friendly, passionate people enjoying sporting events with competitor supporters in a good natured way. I've seen gracious tourists who have taken the time to thank us for their experience, and promise to come back soon. And I am looking forward to a great final tonight!

On a business front, I read a report recently by myYardstick that based on surveys completed by over 1000 business owners across Australia and New Zealand, the biggest challenges currently facing small to medium enterprises include:

Issue/Challenge Percentage of Respondents
Funding 45%
Business Strategy 38%
Estate Planning 34%
Legal Affairs 34%
Succession 33%
Source: myYardstick Professional 2011

While I don't think that the issues raised are new to business, the quantum would suggest that it's still a struggle to run a business, and that business owners biggest need is to have a succinct plan on what they want to do and how they are going to do it. Not that great volume that is propping up a desk or bookshelf, but a practical document that conveys certainty and clarity for those charged to achieve success in the business.

So, are you developing the plan or implementing it?

Till post-RWC2011.

Lincoln

Crikey, I love daylight saving but the timing of it is a bit rough. A super win by both the All Blacks and the Warriors has put the country on a high, but the results of the celebration can be a little difficult to wear when you're an hour short on sleep!

Thought I'd give my view on something that seems to develop opinions a mile apart. The Government is seeking to rush through emergency legislation to give the Police vastly increased (or should I say legalize what they have done in the past) powers to record going-ons and use these recordings to prosecute. Cue Social Liberty groups hitting the headlines talking about heavy handed, power abusing Police who go to the Government with a wish list any time they need increased powers, expecting the Government to do it. Deborah Coddington (a writer I highly admire) says we need to "be guarded from the enormous powers of the state".

What a load of bollocks. If someone commits a crime, all evidence available should be brought in to the light of day so that (as much as possible) people aren't wrongly convicted. I would have thought people would have welcomed this? And if they have committed a crime, and been caught doing it through surveillance, what's the problem? Slippery slope to a Police State? Our political system and media provide a safety valve for this, surely. After all, the Government that is attempting to create the legislation is the party that most NZ'ers voted for.

Given the proliferation of video recording devices and electronic social media, aren't we all on show anyway?

SO WHAT HAVE WE LEARNED IN THE LAST 2065 YEARS?

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." CICERO, 55BC

EVIDENTLY, NOTHING!

Campbell Tyson Cooper White has been a bastion of male-ness for almost 90 years. Although our Team is mainly female (80%), all the Partners/Directors positions have been held by males. This has given the place a decidedly male feel to it. Until this year.

When Sarah Miskell was appointed Director in April this year, something changed. I can also say it changed for the better. Tanya Potter, our General Manager brought a female perspective to our Board Meetings, as well as to the implementation of our strategies at the coal face. However, there had not been the involvement of a female at Directorship level to give it the "full 360". Sarah coming on board has changed this.

Sarah's impact may not even always be direct. Having a female on the Board has, in my opinion, emboldened others to speak up. The decor has improved (the feminine touch has brought far more tasteful colours and decor), meetings have a more collaborative feeling, people seem more open in terms of their opinions and are welling to discuss and negotiate. It was not that this was lacking previously, it is more the amplification that has changed. There has also been a conscious effort to empower all staff which I think has also contributed to a great feel around the office. Our Teams are more sharing and collaborative in their approach, with a real ground-swell of concern and desire to help our clients as a Firm.

It really feels as though we are moving beyond being accountants, and becoming more holistic in the way we run our business and care for our clients.

Till next time.

Lincoln

Hi there

I was caught out on the weekend.  I received a tweet with a condensed link from someone who follows me and whom I follow.  It seemed innocent enough, suggesting a link to a blog that mentioned me.  Having been to the Ice Ideas Conference and catching up with a few friends there, I thought I would check it out.  Nothing happened.  Or so I thought.  I shut down my session on my IPad and went about my business.

About 12/24 hours later I received messages from some people asking if I was a “bot” and to leave them alone.  Oh no.  I then received tweets from friends saying my Twitter account was sending them spam.  Double oh no.  I even received a tweet from someone asking how the heck had I sent them a DM (direct message) and they were about to report me.

So the last 48 hours has been spent apologising, removing software, changing passwords, contacting technical support at Twitter, acknowledging I’ve stuffed up and endeavouring to make things right.  To those of you out there who got rubbish from me; “SORRY!”.

Lesson: Even if you receive a message from a friend, consider carefully any link before you open it, especially those link shortening websites.

Catch you round soon.

Lincoln

Hello again

Been away from the blog for a few weeks now as I have been finishing off the Icehouse Owner Manager Programme. It's been a great few months, and although we will be meeting up for a couple more implementation sessions, I really enjoyed meeting some wonderful people and learning some interesting things about me and my business. Part of the course focused on developing a growth plan for Campbell Tyson Cooper White.

My growth plan centered on many issues I have been raising in my blog. It's about being relevant, adhering to a value proposition for clients, being true to our values:
- Personal - relevant to the client
- Inquisitive - wanting to know more
- Enthusiastic - not being a disinterested accountant!
- Future Focused - not being lost in the past we frequently report on
- Outcome Orientated - substance over form

The thing that excites me is that we have the staff to achieve this. CTCW has staff who are very interested in what their clients do, they look on and assist as though it was their business they are fighting for. They care passionately about results and know they provide value to our clients. What we need to get better at is conveying the message to those we help. And that we perhaps our greatest challenge moving forward.

Catch you again soon.