Posts

Sari Hodgson Awarded FCA Status

Each year the Council of Chartered Accountants Australia and New Zealand recognises outstanding achievement in the profession of accountancy by awarding Fellowships to its members.

Fellowships, are awarded to members who are nominated by their peers for outstanding career achievement or contribution to the profession.

The 2019 awards are to be formally announced in a few days but we are able to share some fantastic news with you – Sari Hodgson, Director of Savage & Savage Limited, has been made a Fellow of CA ANZ this year.

The founder of Savage & Savage Chartered Accountants, Mr Noel Savage, was himself an FCA and Sari says she is proud to follow in her father’s footsteps. “I am also delighted to be able to help our clients succeed in business as well as contributing to our community whenever I can.”

Sari is a Past President of the Nelson Tasman Chamber of Commerce, was the Chair of the Bishop Suter Art Gallery Trust and guided the organisation through the process of changing from a private trust to a Council Controlled Organisation. Sari has been the Chair of the School of Business Advisory Committee at NMIT for more than fifteen years. She has also written several books aimed at helping small to medium businesses. She is a Rotary Paul Harris Fellow. She also supports many community organisations through Savage & Savage.

 

FELLOWSHIP CRITERIA
The member must have demonstrated excellence through:

1. Outstanding achievement in the profession of accountancy through his
or her career
And/or
2. Outstanding contribution to the profession of accountancy through
a. Service and participation with distinction to CA ANZ, ICAA or NZICA
or other organisations within the profession; and/or
b. Services to the community or business; and/or
c. Teaching, research and or writing within the field of accounting that
reflects positively on the profession.
The member may be nominated under criteria one, any part of criteria
two or a combination of these criteria.

Insurance consumers should welcome Fire and Emergency NZ review

The Insurance Council of New Zealand and Internal Affairs Minister, Tracey Martin, applaud government review of current levy funding regime.

From the ashes of a Fire and Emergency New Zealand (FENZ) restructure has risen significant merger costs that, under the current funding regime are recuperated through a levy imposed on all home, contents, and auto insurance premiums.

In March, the Government decided to review the funding system with an eye to seek alternative solutions that are fairer to the wider population and insurance buyers. The move has been overwhelmingly supported by the Insurance Council of New Zealand (ICNZ).

“The current levy is a grossly unfair tax that penalises people who try to do the right thing to protect their assets, lumping them with the cost of running FENZ while also supporting access to emergency services for those who choose not to insure,” said ICNZ Chief Executive, Tim Grafton.

“The Government has made the right call to review how to fund FENZ in a way that is fair to everyone, simple, low cost to administer and lines up with what happens in most other countries,” he continued.

The benefits of the levy are not in dispute, with Internal Affairs Minister Tracey Martin acknowledging the services FENZ provide. “The establishment of FENZ has gone well and New Zealanders are beginning to see the benefits of a modern, unified fire and emergency service,” said Martin. “For example, FENZ has responded admirably to the Nelson/Tasman fire.”

But she, like the insurance industry welcomes the review and potential alternative funding solutions going forward. “FENZ, like the fire service before it, is funded by a levy on property insurance and there are flaws in insurance-based funding: property owners that do not insure are able to ‘freeride’, as they do not pay a levy but still benefit from FENZ’s services; charging people on their insurance increases insurance costs and can reduce the incentive for them to properly insure their properties; and levy collection is complex to administer for insurers, and FENZ’s levy income may become uncertain as the commercial insurance market evolves.”

“The Government considers that there may be better ways to fund such an important organisation,” she concluded.

This article was originally published in Crombie Lockwood’s SURE magazine

Moving on from cheques

IRD recently announced their decision to no longer accept cheque payments for any form of tax from 1st March 2020. We will be in touch with those who for one reason or another (ie no rural broadband) can’t pay online to help you identify other payment methods.

Here’s what IRD had to say in their news release:

Cheque usage continues to decline every year. Last year cheques only accounted for 5% of payments to Inland Revenue and some people who used cheques also used other payment methods.
From 1 March 2020, Inland Revenue will no longer be accepting cheques if customers have an alternative payment option available. This includes post-dated cheques (cheques dated after 1 March 2020).

Around 90% of the cheques we receive come from clients of tax agents. If you or your clients use cheques you will be instrumental in the transition to alternative payment methods. There’s plenty of time before next March for people to explore their options and find a convenient and secure way that works for them.

There are many different ways to pay – electronically or in person.

Ways to pay

Here’s a summary of payment options:

  • myIR: You can pay by direct debit and make debit card and credit card payments securely through myIR online services. Visit our website (ird.govt.nz) and login or register for myIR.
  • Online banking: You may be able to make payments using online banking. Contact your bank for more information.
  • Credit or debit card via our website: Use your credit or debit card to make online payments through our website. Visit ird.govt.nz/pay.
  • In person at Westpac: Pay by EFTPOS or cash at a Westpac branch or Smart ATM.
  • Money transfer: If you are overseas you can pay us using a money transfer service. Search for “make a payment” on our website for more information.

Charges may apply for some payment options.

We are soon going to start contacting cheque payers (and their tax agents) to let them know about this change and alternative ways to pay.

In the meantime, if you would like more information visit our website at ird.govt.nz/pay.

What is work?

There will be significant implications for many employers following a recent Employment Court Case. If your employees attend training, meetings, work functions or travel for work purposes you may need to reconsider how you pay them.

The case involved the Smiths City Group. Every morning prior to opening, the sales manager at each of their 29 locations holds a 15 minute morning meeting to discuss issues and talk about sales promotions and targets. The employees were not paid for their attendance.

In January 2016 a Labour Inspector issued an improvement notice to Smiths City that required the organisation to undertake an audit to identify where wages had been paid below the statutory minimum. The audit was for all employees who attended the 15-minute morning meeting who was on, or close to, the minimum wage rate and it applied across all 29 stores. The audit had to cover all current and previous employees for the last six years. The company was to calculate the arrears of pay below the minimum wage and reimburse those arrears accordingly.

Smiths City objected to the improvement notice claiming the 15 minute meeting was not work. In addition, Smith City was claiming the commissions and bonuses paid to employees ensured they were paid above the minimum wage even when the hourly base rate was at the minimum wage and the 15 minute meeting was deemed to be work. The matter went to the Employment Relations Authority and the Authority agreed with Smith City, rescinding the notice. The Labour Inspector appealed, and the case was heard by a full bench of the Employment Court.

The Employment Court looked at the Idea Services case (known as the Sleepover case) as the basis for determining whether the 15-minute meeting was “work” for the purposes of the Minimum Wages Act.

Smiths City argued that the employees were not compelled to attend the meetings, that the meetings didn’t put a significant degree of constraint on the employees, and there was no responsibility on the sales staff during the meetings, and they argued that the meetings were not critical to the business.

The Employment Court found that staff were required to attend the meetings, and that while there were different expectations of behaviour in the meetings compared to when they were in the store, that it did not alter the fact that their personal freedom during those 15 minutes was constrained by the employer.

The Court rejected Smiths City’s claim that there was no responsibility on the employee during the meetings, but rather like a training course, the employees were expected to sit, listen and learn the information being presented by the Sales Manager so they could apply it during the day.

The Court also rejected Smiths City’s claim that both the employer and the employee benefited from attending the morning meeting, by earning higher commissions.

Accordingly, the Court found that the sales employees who attended the morning meetings were working during those 15 minutes.

That left the Court to consider whether Smiths City had breached the Minimum Wage Act. Smiths City contended that when the sales commission was taken into account, all of their sales staff earned more than the minimum wage. The method of payment was justified by the company because wages, and commission, were earned over the whole pay period which it considered to be the correct interval for the calculation of minimum wage.

The Court accepted that the commission does form part of wages, but said it didn’t satisfy s 6 of the Minimum Wage Act. The Court found that commission and incentive payments were not earned for attendance at the meetings and were not connected to hourly rates of pay generally. They were achieved against targets specified by the company. The commission payments were deemed to be additional income earned over and above the contractual hourly rate, and not a substitution for it.

The Court stated that Smiths City’s method of calculation did not satisfy the Minimum Wage Act. The Court reinstated the Labour Inspector’s Improvement Notice. This means Smith City will be required to backpay, for a six year period, any hourly paid employee who attended the morning meetings.

If you have concerns about how your remuneration is structured and whether you are inadvertently failing to meet minimum wage requirements, please contact our team.

Accountants to comply with AML/CFT legislation

Some time ago New Zealand has passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT).

The purpose of the law reflects New Zealand’s commitment to the international initiative to counter the impact that criminal activity has on people and economies within the global community.

The first sector required to comply with this legislation was the Finance sector (Banks, Financial Planners etc), lawyers are required to comply with the requirements of the AML/CFT Act from the 1st July 2018 and recent changes to the Act mean that from 1 October 2018 accountants are required to comply too.

The intent is for the entire professional services community (lawyers, accountants,banks, etc) to help combat money laundering and terrorist financing, and to help Police bring the criminals who do it to justice so even though the vast majority of our clients are honourable people we know well, and have had a long relationship with, this legislation requires us to do a number of things with regards to every client

The law says that we must assess the risk we may face from the actions of money launderers and people who finance terrorism as well as identify potentially suspicious activity and that means more paperwork for us and a requirement for you to supply us with more information.

For most of our clients we will be asking for certain information when you bring in your annual accounts work, while we need to have compliant processes in place by the 1st October we have a year or so to collect this information about all clients. New clients will need to provide the information BEFORE we can carry out any work.

To complete the risk assessment we must obtain and verify information from prospective and existing clients about a range of things. This is part of what AML/CFT calls “customer due diligence” (‘CDD’).

CDD requires us to undertake certain background checks before providing services to clients or customers. Accountants and other professionals must take reasonable steps to make sure the information they receive from clients is correct, so we need to ask for documents that show this and we need to keep the information on file for a minimum of five years.

If your business activities change significantly then we may need to update the CDD

The minimum information we will need to obtain from you and verify to meet these legal requirements includes:

  • your full name; and
  • your date of birth; and
  • your address.

To confirm these details, documents such as your driver’s licence or your birth certificate, and documents that show your address, such as a current bank statement will be required.

If we complete work for a company or trust we will need information about the company or trust too, including the people associated with it (such as directors and shareholders, trustees and beneficiaries).

We will need to ask you about the nature and purpose of the proposed work you are asking us to do for you; in most cases it will be business advisory and annual accounts/tax work.

We may need information confirming the source of funds for certain transaction to meet the legal requirements and we may also need to ask you for further information depending on a range of variables required by the legislation.

If we are not able to obtain the required information from you, it is likely we will not be able to act for you.

Before we start working for you, we will let you know what information we need, and what documents you need to show us and let us photocopy.

While we may shake our heads at some of the requirements, the Act is bringing New Zealand into line with other countries and if you have any queries or concerns please contact our Practice Manager, Neil Hodgson, who is our AML/CFT Compliance Manager.

From our business perspective there is a huge amount we need to put in place, including various compliance programmes and reporting systems, staff training programes all of which will be audited every two years (NOTE – this is not an audit of you, it is an audit of our systems). We need to keep records regarding AML/CFT for a minimum of five years and this will be held in individual client files as well as in our various compliance documents.

And just so you know they aren’t picking on you we even have to carry out Department of Justice checks and credit checks on our staff as part of our compliance programme.

Chapman ER News – Employer Successful in Constructive Dismissal Case

We have seen an increased occurrence of employees resigning and then raising a PG, stating that their resignation was constructive dismissal and unjustified.  In many instances they haven’t previously raised their concerns with their employer or the issues raised appeared minor with the employer believing each was addressed at the time as no further concern was raised by the employee.  However, post-resignation, the employee might list all of the minor issues trying to prove that a trend existed. They may even claim an illness that they believe resulted from issues in their employment.

It is reassuring to see the Employment Relations Authority reject a recent claim of constructive and unjustified dismissal by Kathryn Gifkins that she was forced to resign from her position at Marinoto Rest Home in Taranaki.

The claim followed two incidents; one regarding a false accusation of Gifkins dragging a resident and the other about her being stalked by a dementia patient.  Gifkins​ claimed her manager did nothing about either incident and so felt she had no option but to resign i.e. her resignation was constructive dismissal and was unjustified.

Gifkins was employed as a healthcare assistant at Marinoto Rest Home in July 2016. Two issues arose, shortly after she started which she said were of “significant concern for her”.

She soon realised that she was expected to dispense medication to patients which was something she felt uncomfortable doing in case she made a mistake and also felt it was a a registered nurse duty.

Her manager, Barbara Kay, said Gifkins did not convey her concerns about making a mistake and commented that Gifkins was “very competent” at providing medication and had no concerns about her confidence.

The Authority was satisfied the dispensing of blister pack medications was a reasonable activity for Gifkin’s position.

The second issue Gifkins had was with a dementia patient who became “infatuated” with her.

The patient told her he wanted to marry her and proposed to her. He continuously sought her out, giving gifts, making phone calls to her home and following her to the car park.

Despite complaining to Kay about feeling harassed, she said her concerns were never addressed.

However, Kay argued she told Gifkins she did not have to go to the area of the rest home where the patient was living, she did not have to care for him or communicate with him.

Gifkins said it was difficult to distance herself from him due to the size of the rest home.

The Authority member said it was clear Gifkins received unwanted attention from the resident, but she could not apportion blame to the rest home as options were given to her by management to reduce the interaction.

In May 2017, Gifkins resigned. This followed an incident which Gifkins described as “the final straw”.

Gifkins claimed that earlier that day Kay falsely accused her of dragging a patient when she and another carer were trying to lift a patient off the floor into a chair.

Gifkins claimed Kay yelled “Are you dragging him or lifting him?”. Kay admitted she said those words, but denied she yelled them, or directed them solely at Gifkins.

Gifkins said she was unhappy with the way she had been treated and felt distressed that Kay had not listened to her or been responsive.

The Authority member noted that Kay’s manner, along with the words used at the time of the incident, may have been “insensitive and unhelpful in the moment” and added “I accept, however, that Ms Gifkins was unhappy and resentful as a consequence, but I am not at all persuaded that the interaction could be regarded as a breach of Ms Gifkins’ employment, let alone one that could be fairly characterised as dismissive or repudiatory conduct that would make it reasonably forseeable Ms Gifkins would resign, an employer is under no contractual obligation to behave sensitively towards its employees.”

A constructive dismissal occurs where an employee resigns from employment but really the resignation was forced or initiated by the action(s) of the employer.

The Authority assessed whether a substantial risk of resignation was reasonably foreseeable and found that it was not in this case.

Volume wins big

The old saying that nice things come in small packages couldn’t be more apt in the case of another client who has been successful, this time at the 2018 Retail Hotlist Awards.

The very small shop in Church Street that is home to Volume – The Space for Books belies the stature of this perfect little bookshop. After opening just over 18 months ago Volume has quickly gained a reputation as one of the very best independent bookshops in New Zealand and this was recognised recently when they won the People’s Choice Award for BEST PROVINCIAL RETAILER at the 2018 Retail Hotlist Awards – not just for bookshops but for all retailers

This is proof that customers want great service and that is just what Thomas and Stella deliver everyday to every customer

 

Hopgood’s & Co win big

We are delighted our client, Hopgood’s & Co, has had huge success at the Silver Fern Awards. They were named Best Restaurant in New Zealand, Aaron Ballantyne was named as the Best Head Chef and they won the award for Best Dish in the competition.

Think about all those top restaurants in Auckland and from other parts of New Zealand and you will realise just how special this achievement is.

Hopgood’s & Co chefs Aaron Ballantyne, left, and Kevin Hopgood

Congratulations to Kevin Hopgood, Arron Ballantyne and the rest of the great team at Hopgoods.

Here are some links to articles about both Kevin and Aaron that Neil Hodgson wrote for his Taste of Nelson column, their extensive backgrounds, hard work and total commitment to quality have rightly been recognised with these awards..

 

 

 

 

 

The Minimum Wage Increases from 1 April 2018.

While the Government must review the Minimum Wage annually the new Government has already pledged to get it up to $20 per hour by 2020. The first step to this target is the increase that comes into effect from 1st April 2018

The new minimum wage rates are:

Adult – $16.50 an hour
Starting-out – $13.20 an hour (up from $12.60)
Training – $13.20 an hour (up from $12.60)

If you already pay above the minimum wage there is no obligation to increase it proportionally.

If you have any employees earning less that $16.50 an hour then you MUST increase their pay rate to the appropriate new minimum wage

Employees who are paid wages need to be paid for the actual hours they work. This includes any extra hours completed.

For Salaried staff you need to consider if they are being paid below minimum wage for total hours of work.

Nelson Pine Industries Business Awards

At this year’s Nelson Pine Industries Business Awards hosted by the Nelson Tasman Chamber of Commerce two of our clients won awards; Emma

Heke won the Innovation Award for her range of specialty herbal teas and Shane & Annette McCrae from McCraes Blinds and Drapes were awarded a special Business Excellence Award in the large business category.

A huge congratulations to both businesses and the very hard working owners.

It is worth noting that Emma completed the year-long Barbican Training business course before she started her business, this meant she had a full business plan, finance plane, marketing pan and the skills to manage her new business. It just goes to show if you start off on the right track with a new business success can be just around the corner.