We tend to judge people and things simplistically, deciding whether someone or something is good or bad, acceptable or unacceptable, based on our rules for determining good or bad. Even in fiction, superheroes and villains have reputations and are characterised by the way they behave. The hero almost always demonstrates qualities we admire, whilst the villain has ‘bad-guy’ qualities we find unacceptable or distasteful.

A reputation can take years to build but only seconds to damage or destroy. With as much effort as it takes to switch on a computer, anyone, anywhere in the world, can find out how someone ‘rates’ in the reputation stakes. Literally millions of pages on the internet are full of people’s opinions – mostly of other people. It has become far harder to control how the messages we put out are received by others as the number of available alternatives has exploded.

Employers will not need to agree to the request and do not need to provide a reason for declining the request. Where employers receive a request they must consider the request, advise the employee in writing as to whether the employer accepts or declines the request and respond in a reasonable timeframe.

Employers are entitled to have a policy that allows the employer to rule out all requests for a pay out. This could apply to the whole or part of the business. This is
intended to reduce compliance costs for businesses where it is not financially practicable to pay out leave.

The Bill also provides that if an employer has incorrectly paid out a portion of the employee’s annual leave i.e. which falls outside the 1 week’s leave in any 1 entitlement year, the paid out portion is restored to the employee’s annual leave balance, regardless of the payment being made.

It would be unlawful for employers to require employees’ leave to be paid out, even if the requirement is specified and agreed in the employment agreement. The payment for leave could not be raised in negotiations relating to salary or wages.

The ability for leave to be paid out will provide employees with the option if that is what they prefer while ensuring that they still have to take a decent break during the year. It is refreshing that employers retain the control given that the wages bill could potentially double in a pay cycle.

There are the predictable comments about the 90 day trial heralding abuse and mayhem but most employers, at some stage, have experienced employees who simply do not work out and 90 days is long enough to know if someone is patently unsuitable for a role. The key for employers is that they need to manage this time frame and ensure their paperwork is in good order.

A recent Department of Labour survey of employers showed that 40% would not, or were not likely to, have hired a new person without the trial period in the agreement. The Survey results also showed that three quarters of those employed on trial were taken on permanently.

“Income” now has a very strange meaning. For example, if you hold shares in a United States company which does not generate any dividends, you have income. This is because your income is calculated based on the value of those shares.

Overseas life insurance policies and superannuation funds can also be classed as a source of income, even though you might not receive any money from them. Be sure to tell us if you have one of these. If a policy is taken out in New Zealand with an overseas insurance company, there’s no tax problem.

The IRD has been making agreements with a large number of overseas countries to swap information, so don’t rely on not being caught.

Some people think they need to declare income only if they bring money back to New Zealand. This is not correct, even if they have paid tax overseas. New Zealand residents are taxed on their worldwide income. Usually, there is a credit for some or all of the foreign tax paid. There can be special tax rules, in regard to declaring overseas income, for people coming to live here from overseas. They last for four years. If you think you qualify, contact us.

Our client was very excited about a fashion agency business. It involved smart fashion items and regular overseas travel. Well, somebody has to do it, don’t they!

The Business Sales Consultant produced an excellent presentation brochure. The business was quite profitable, but as always no deduction had been made to compensate the owners for the work they would need to put in to run the business day in and day out.

The value of the business was based on a multiple of past normalised profits after adjusting for non business expenses. Because there was little stock and fixed assets, the business value was almost completely represented by hundreds of thousands of dollars of Goodwill. My problem was that if my clients did not run the business successfully then they would have nothing left, the Goodwill would have disappeared.

I reviewed the business records and found them to be in order. It was halfway through the financial year but no interim accounts were available. Thank goodness for GST. I was able to deduce from the GST returns that sales for the first six months were down 22% on the previous year. Not a good sign.

The final result was a low but realistic offer from my client. This was not accepted by the vendor but my client still has his retirement funds safely invested.

Source : RSM Prince

A new entrant is an employee who is 16 or 17 years old except if they have :

• Completed 3 months or 200 hours of employment, whichever is shorter, or
• Been supervising or training other employees; or
• who are trainees.

1. When a company pays a CoverPlus Extra premium, it will be tax deductible in the same way as for shareholder-employees. The Earner premium remains a personal cost.
2. Shareholder-employees will be able to use their occupation for levy purposes as opposed to the occupation of the company.

Dividends issued after the new rate takes effect can be imputed at the existing 30% rate for up to two years if company tax has been paid at the 30% rate.