What’s wrong with this picture?

On the ANZ Direct Online (DLO) business banking site we see ANZ are dropping support for Chrome…

Good on ya ANZ

Wiki tells us Chrome is the most popular browser…

wiki browser stats

The NZ Herald tells us ANZ ranks bottom in the 2015 NZ Banking customer survey

2015 banking satisfaction survey

And also in the Herald we see the top paid CEO in New Zealand is the ANZ CEO!

ANZ CEO

So I guess there is nothing wrong with this picture, it all hangs together nicely.

anz

Come on ANZ, lift your game – this really isn’t good enough! Your Direct Online business banking website is dreadful (and you charge $29 a month to use it!!), you have no direct bank feeds to Xero for your credit cards and your internet banking is down. Maybe pay your CEO a bit less and spend the savings on sorting our your IT systems.

If you could sort out your IT systems you might become our favourite bank.

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Disclaimer: I have nothing personal against the ANZ, some of my best friends work there :-), it is just that their java requiring Direct Online site is an insult to anyone who has to use it. If you want to see how to do it properly check out BNZ’s site.

 

Cuba Libre

Having just returned from Cuba a few weeks ago I was delighted to learn yesterday that the 45 day legislative objection period had lapsed without objection, and the US had removed Cuba from its blacklist of terrorist countries, allowing diplomatic relations to be restored as a first step in easing trade and economic sanctions.IMG_3795

Clearly this is going to have huge changes for Cuba and they are in a unique position to choose what changes they want and how they want to change, having observed world progress over the last 50 years. I’m glad I got to see the country before these changes. Cubans secured their independence from Spain in 1898, were boycotted by the US over 50 years ago, and then abandoned by the Soviet Union in 1990 with the break up of the Soviet Union.

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For the last 25 years they have operated in a virtual wilderness. This is reflected in the iconic 1950s vehicles that we associate with Cuba. Interestingly these are now being imported from the US as they are a major tourist attraction.

The reality is that most of the cars are that old and many of the buildings are crumbling although the government is working to rebuild some of the classic older buildings, retaining their facades. It also partners with non-US hotel chains to build hotels, particularly in the capital, Havana, to provide for the tourists, a major source of revenue.

Our trip included driving through the country side, on highways with little traffic but lots of horses and carts, while oxen ploughed the fields. Almost everything is homegrown. So when we saw lamb on the menu we asked where they graze their sheep since it is so close to the equator. Apparently their “sheep” have horns and are what we call goats. But lamb is better understood by the tourist so lamb it is.

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Our visit to the cigar factory showed rows of people hand rolling cigars – the country produces around 1 million a day. Everything is very labour intensive with locals earning around $US10 a month. Tourists use a different currency aligned with the US dollar.

So what does change look like for Cubans we spoke to? They know they don’t want fast food outlets on every corner or multi-national chain stores throughout the main streets. They’re looking forward to greater opportunity to run their own businesses, a higher standard of living, more access to the internet and the outside world, and the opportunity to travel – things we take so much for granted.

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I’m looking forward to re-visiting in 5 years to see Cuba then.

More than you ever wanted to know about ACC (and a bit about how to reduce your levy)

Clients, particularly new clients, often ask about “registering” with the Accident Compensation Corporation, ACC.

The short answer is that no registration is required. ACC will find you!

When you file an income tax after 31 March each year the salary and wages information (including shareholder salaries) from that return is sent from Inland Revenue to ACC. ACC then calculates the amount of levy based on the business’ Business Industry Classification (BIC) number and the amount of salary and wages paid. Each employee is only charged a levy up to $118,191 of salary and wages so if an individual earns $150,000 a year then they will only be charged a levy on their earnings to $118,191.

Your BIC number is determined by the industry you operate in rather than the type of work you do. So if you do general administration work then you may be able to use an administration code but if you do administration work for a forestry company then you will need to use the forestry BIC.

Industries with higher accident costs will have higher levy charges.

The levy is made up of several portions: current and residual portions of the work account levy, current and residual portions of the earner levy, and the health and safety in employment levy. The earner levy is charged through the PAYE system for employees but is part of the total employer levy for shareholder employees.

When you set up your business you will generally be asked for your BIC when you register for GST or obtain an IRD number. If you already have an IRD number but are below the $60,000 GST registration level then ACC will contact you for your BIC.

Because your first ACC levy is charged after the business tax return has been filed, it may be some time before you receive your first ACC invoice. For example, if your income tax return for the year ended 31 March 2014 is filed in October 2014 you may not receive your ACC levy invoice until the following February or March. At the same time ACC will send you a provisional invoice for the current year based on last year, usually resulting in a large bill for your first year.

Very roughly you would expect the levy to be around $1,000 for every $100,000 of salaries and wages paid.

A couple of things to remember about earnings cover under ACC:

  • it only covers accidents and not illness. You may therefore want to have some income protection insurance
  • you may not have reasonable loss of earnings cover if you are in your first year of operating your business. You may therefore want to consider Cover Plus Extra – see below for more details.

Earner levy deductibility

While the cost of the ACC levy is deductible for both GST and income tax purposes, the earner levy is not deductible for either. The earner levy constitutes the bulk of the levy.

For employees who are on PAYE it is deducted from the employee’s regular pay in addition to their PAYE so is considered a personal cost, not a business cost. Therefore for the self-employed and shareholder employees this portion of the levy is not deductible for the employer even though the employer may pay for it.

Reducing your levy

Given that the ACC levy is a significant cost for any business, we recommend that you review the BIC to ensure it is appropriate for your business and to consider Cover Plus Extra as an option to reduce both cover and premium costs.

There are also various ways to reduce your levies such as a discount if you have a low payroll (less than around $500,000) and can demonstrate good workplace safety in a high risk industry, reduced rates if you have a history of no claims etc although these can be easier to achieve if you operate in a trade rather than a desk role.

CoverPlus Extra

Around 12 years ago ACC introduced a new product called Cover Pus Extra for shareholder employees. While the levy is calculated to a maximum of $118,191 per shareholder employee, Cover Plus Extra allows you to choose a different level of cover with a corresponding effect on the levy premium.

So for example if you usually earn $100,000 in shareholder salary, you may decide that you only need cover for income of $60,000 or less if you have an accident and cannot work. You may be happy to have a lower level of ACC cover because you have income protection insurance or have income from other sources.

The lower level of cover reduces the premium but ACC’s computer systems cannot calculate the Cover Plus Extra premium when the cover is taken out each year. You will be charged the standard premium and after year end ACC will manually calculate the amount of premium refund you are due. With a large backlog recently ACC has been running up to 2 years behind in paying these refunds.

ACC is a complex cost for any business so for everything you ever wanted to know about ACC levies go to their website at www.acc.co.nz.

Changing accountants – yes/no/maybe?

How hard is it to change accountants? Not hard at all – much easier than changing banks.

People are generally quite loyal and don’t like changing accountants even if they are unhappy with the service, the product or the price. Partly it is because the pain of the annual accounts process is soon forgotten and it is just another put off-able low priority chore to change accountants, and partly it is that they don’t know who to change to and are not confident that changing will improve things. A year quickly rolls by and the process repeats.

Some do change though – every week we get enquires from people who are not happy with their current accountant. When I hear their reasons it is often because their current accountant is either unresponsive, providing poor quality advice, expensive or all of the preceding.

I’m appalled and embarrassed to be in the industry when I hear that sort of thing. Sadly though it isn’t that uncommon, I was on an IRD run course a while ago and I was astounded how many accountants and tax agents were behind in their taxes with IRD. If you can’t look after your own affairs then you probably won’t do a very good job for your clients.

It is reasonable to expect your accountant to:

  1. Be responsive and available – answer the phone and emails promptly and treat you with respect.
  2. Provide excellent service. Give quality and timely advice, schedule the work and complete it when they say they will.
  3. Provide good value and no surprises. Charge a fair price and tell you what it will cost up front. You shouldn’t be charged for short phone calls and emails, that’s part of the service.
  4. Understand that each client is different and has different needs. Accountancy isn’t a factory producing identical widgets, it is service industry providing clients with the services they want.
  5. Be proactive – if things are going wrong for you they should fix it before it gets serious.
  6. Suggest you use Xero. I had to add this as we get so much feedback from our clients saying things like “we really like working with you and what you do for us, but one of the the best things you have done for us is recommend we use Xero”. We have never lost a client by recommending Xero (but we have gained quite a few).
  7. Allow you to choose to move accountants without trying to lock you into contracts that bind you (check the fine print). If you want to change accountants it is your choice, all you should need to do is pay for any work your current accountant has done to date. Any contract probably won’t be enforceable anyway.

So how do you change accountants? Easy, call us, find out what we can do for you and what it will cost then if you want to change to us you sign an engagement letter that lays out what we do and the costs and we take care of it from there. Sit back and enjoy the ride while we contact your previous accountant to get your records, and we link up to IRD as your accountants.

Later on if you change your mind about us, no problem, changing accountants is easy!

Martin

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