What it also means is that when you cut the trees down you will have the liability still to surrender credits based on how much carbon is removed, but if you have not claimed them, you will not have NZU Credits for that 5 years period you missed.
If you have land and trees in the Post 89 Forest regime and have not filed returns it is strongly recommended you turn your attention to this.
Did you know that where a post-1989 forest is registered into the ETS and the landowner either sells the property or changes the names on the title by more than 40% (i.e. change in Trustee or Partner) a Mandatory Emissions Return (MER) and Transfer of Participation must be submitted within 20 working days; if you think this could apply to you get in contact with us to discuss this further.
Robbie has been involved in the farming sector for most of her life. Growing up on a sheep & beef farm, Robbie and her husband Andy dairy farm in Ashley Clinton, CHB. They have 3 young children & are an active part of the community. Robbie enjoys working with a wide range of clients in both a compliance and advisory capacity and helping them grow their business.
Claire has been working in a chartered accounting environment for approximately 16 years. She is Hawkes Bay born & bred and grew up on an orchard. She married farmer Sam. They have 2 children and are lucky enough to farm Sam’s family farm in Wakarara, CHB. Claire enjoys interacting with a variety of clients but has a special interest in farm accounting.
Our team of directors and accountants have a sound background in the business of farming and therefore our firm has a strong farming focus. It is our philosophy that “good business” and achieving goals starts from a platform of making “good decisions”. Making good decisions on a consistent basis relies heavily on having the relevant information on a timely basis.
Matt, Tony, Donna,
Kate and Nick
PAID REST BREAKS
From April 2009 all employees have been entitled to two paid 10-minute rest breaks and one 30 minute unpaid meal break if an employee works between 6 and 8 hours. These rest breaks are to be paid at the same rate that an employee is ordinarily paid for their work. (Section 69ZD of the Employment Relations Act, the ERA). This is easy to calculate for employees who are paid on an hourly rate but becomes a bit more complicated to calculate when you have employees who are paid a variable rate (such as piece rate workers), which include shearers, fruit pickers or thinners and vineyard pruners.
Piece rates cannot have the paid break built into them.
Employment records should, as appropriate, show:
• payments made for rest breaks;
• compensation paid for rest breaks not taken;
• time recorded for compensatory paid time off work.
The Department of Labour is aware that not all employers are complying with the above and following recent amendments to the ERA which came into force on 1 April 2016, the Labour Inspectorate has increased powers to monitor and enforce compliance with employment standards, including the provision of paid rest breaks.
At BM Accounting we know that employing staff can be a minefield especially when things go wrong and you have relied on a hand shake and goodwill to get you through. We will be holding a seminar in February 2018 on employment law, to offer you advice on dealing with employing staff including employment contracts, keeping accurate holiday records, paid rest breaks.
The second instalment of provisional tax is due for most of our farmers in March. if you believe that there has been a significant change in the profitability of your business; get in contact with us today to look at a provisional tax estimate. Not only does this assist you with tax planning but it can also reduce any UOMI exposure.
2018 tax year the rules around farm house related expenditure have changed;
50% telephone rental
20% home expenses
Watch Tier 1 & 2.
Click here for more details or get in contact with one of our team today.
Fond Farewells & Warm Welcomes
Many of you know Karen Edwards and Amy Campbell who assist so many clients with their wages/PAYE and their GST processing. They are excellent at keeping the cogs turning and the figures flowing smoothly. Karen has decided that it is time to retire and have more time to enjoy family and hobbies. Amy left us in December to move to a part time position with a local law firm to fit in with her busy family life.
We have searched to find two extremely capable people – and are pleased to announce that Rachael Campbell and Amanda Drake will be joining our team at the beginning of January. Both have years of experience in all aspects of administration and accounting as well as the benefit of farming backgrounds.
Karen will be around in January to ensure a smooth transition for your accounting work and looks forward to introducing you to Rachael and Amanda.
FARMING NEWSLETTER - December 2017
If you are a farmer and have trees in the Post 89 Forestry scheme then time is running out to collect the last tranche of Carbon credits under the current “Commitment Period – 1 January 2013 to 31 December 2017.
What this simply means is that if you have not filed a return under the Post 89 regulations since the first Commitment Period, which closed on 31 December 2012, then you will not be allocated those Carbon Units you have earnt by way of your trees growing and you have been entitled to over the 5-year period (1 January 2013 to 31 December 2017).
EVER WONDERED WHY … the interest rate you pay on your farm loan is different to your neighbour down the road?
Banks apply different loan interest rates to different customers as each farm and the people involved have different risk profiles. Banks essentially measure the risk of each customer, which affects their ability to borrow money and the interest rate they pay. They want to know that the business they are investing in has the ability to meet its operating costs and service and repay debt.
When assessing a credit proposal, the bank will look at 6 key areas.
Industry What industry are you in, and key factors
Asset Efficiency Your business performance based on production, eg lambing percentage/meat and fibre a hectare etc
Profit History Quality and consistency of your earnings over time
Budgets and Cashflows Looking forward at the proposed debt structure
Debt capacity Can the debt be serviced and paid over time
Balance Sheet An appropriate balance sheet and equity levels in relation to debt, capacity and risks
How do I reduce my risk profile?
Your risk profile is unique to you. While there are some things you cannot change, such as the industry you are in, there are many others that you can manage and help reduce your risk profile.
Risk may be reduced by demonstrating good financial management, operating profitability and having an appropriate level of debt relative to your asset value and profitability.
Good management practices are something we can control and can easily demonstrate. Good management practices include the following:
Staying within credit limits
Completing financial accounts on time and providing to the bank
Preparing budgets and monitoring them regularly and taking action when things change
Proactively communicate with your key stakeholders and the bank
Plan and budget
Manage cash – know your seasonal cash flow fluctuations
Having an appropriate equity level and provide lenders with adequate security
Understand the relationship between production and profit
Banks will look at both risks and the mitigates ie what will offset the risk. They understand every business is different and businesses can change profit through better management and investment. Demonstrating good cashflow management is the key factor though. Bankers want to see managers who understand and will respond to change, be it the weather, commodity prices or interest rate changes.
The team at BM Accounting see a budget as essential to have better financial practice, improved profitability and improving the banks risk assessment of your business. Give your BM advisor a call to help you on your journey to better financial management and lower interest rates!
Your bank will be more than happy to discuss with you your business and give some ideas around how to reduce your risk profile. Some of these will be easier to change than others and others will take time. But every little change and adjustment will benefit your business going forward.
FARM ENVIRONMENTAL MANAGEMENT PLAN
If you own 4ha or more of productive land in the Tukituki catchment – or if you are a low intensity farm over 10ha – you need to complete a Farm Environmental Management Plan by 31 May 2018.
If you farm in the Hawke’s Bay, there are specific Farm Environmental Management Plan templates that have been approved by the Hawke’s Bay Regional Council’s regulations (Tukituki River Catchment) on the Beef and Lamb website to assist you with this process.
Disclaimer - This publication has been carefully prepared, but it has been written in general terms only. The publication should not be relied upon to provide specific information without also obtaining appropriate professional advice after detailed examination of your situation