Coombe Smith Blog

A New Way of Paying Tax AIM

A New Way of Paying Tax AIM

A New Way of Paying Tax – The Accounting Income Method

 The IRD are trying to simplify Provisional Tax. They have introduced and are pushing for the "Accounting Income Method" (AIM). You may have heard about it.

 It's coming and from the 1 April 2018 it will become available for small businesses that use IRD approved accounting software. This means you're able to pay Provisional Tax based on your business's profits. The idea is good – pay your tax when you earn the money. The detail isn't so good – the devil is in the detail. Read more…

Ho Ho Ho! Knowing what’s deductible

Do your plans for the festive season include functions to celebrate with clients and the team? What about gifts? If they do, here are some tips on the tax implications.


When you're entertaining clients or colleagues, some entertainment expenses are tax deductible while others aren't. It can be tricky working out what's deductible as a business expense and what isn't.

The basic idea is that an expense is business-related if you spend the money to help your business earn income. Most business-related expenses are fully deductible. If the expense doesn't help your business earn gross income, it's private and you can't claim it as a tax deduction.

It becomes a little trickier Read more…

Free Trade & TTPA

Free Trade & TPPA

The Trans-Pacific Partnership Agreement (TPPA) is a hot topic at the moment but free trade is at the centre of what the twelve nations are trying to achieve.

Wouldn't it a better place if there were no restrictions on our trade?  Quotas and tariffs are designed simply to protect the country that imposes them for the benefit of those industries that perhaps can't produce a commodity as cost efficiently as others that wish to export to the country that needs the product. 

Let the market forces decide!  If there is a demand for a product, people will supply it.  The price will be what a willing buyer and willing seller agree.  Get back to basics.

Supply and demand – an economic theory, the relation between these two factors determines the price of a commodity.  This relationship is thought to be the driving force in a free market.  As demand for an item increases, prices rise.  When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down.  Stated another way, generally, if there is a low supply and a high demand, the price will be high.  In contrast, the greater the supply and the lower the demand, the lower the price will be.

Tariffs and Quotas upset the free market.  What is your competitive advantage when you make something?  Is it the natural resources available - the sun, rain and wind?  Or is it intellectual property (IP) the know-how and can do we possess?  We have an abundance of wind that makes wind farming cost efficient.  We have large green spaces and the conversion of grass into milk is legendary around the world.  Providing subsidies to farmers to grow nothing (fallow fields) has long been a bone of contention.  Who are they helping by providing money for nothing?  There is no encouragement to better the farming practices.

In business we are constantly looking to better what we do, to be efficient in our processes and production. We work towards making a good margin on the products we make and export to the world.  The sale of our products at fair prices should not be sabotaged by tariffs and quotas protecting locals who don't have the skills and resources we have.  We should have fair trade for all.



Hamish Pryde

16 February 2016



As a sequel to the "Some past outrageous tax expense claims" article that I wrote earlier, I thought it was important to complete the picture.

People in business generally don't like paying tax – but if you are not paying tax you are simply not making money!

The New Zealand thought process is "If we can just sneak a few more tax deductions, or just reduce that tax bill just a little more, I feel like I'm winning". Read more…