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Coombe Smith Blog

Why Companies Fail

It is interesting to note that the causes of Company failures, as reported to us by Directors, are many and varied, but are often not always correctly unidentified by the Directors of the failed Companies.  

There are, however, some common themes, and some of these include: Read more…

Flu Injections

We have seen a number of clients' paying for employees to receive flu injections.  We can see the logic in spending a few dollars now to help prevent staff spending time off work sick.  These can be provided on site by a nurse, vouchers provided, or employees reimbursed after paying themselves.

 The provision of flu injections to staff is a deductible expense to the taxpayer and coded to general or staff expenses.  It does not give rise to an FBT liability.  The flu injection relates to health and safety, which has an FBT exemption.

 Section CX24 of the Income Tax Act 2007 provides that a benefit provided by an employer to an employee is not a fringe benefit if it is "related to the employee's health and safety" and "is aimed at hazard management in the workplace".

 

 

How to improve Business Value

How to Improve Business Value

A successful small business sale begins with a solid grasp of business valuation. The valuation can make or break a business sale because for many sellers, attaching a dollar value to their company is a touchy subject - especially if they have spent years building it from scratch to a profitable enterprise.

A valuation process is a skill that is not derived from a simple formula. It involves subjective judgment coupled with acceptable market valuation methodologies and should be undertaken by experienced advisors.

Remember - the actual value of your business Read more…

Employment Agreements are a must

A recent Employment Relations Authority (ERA) ruling further proves how vital Employment Agreements are.   An employee was awarded $3,000 after the ERA ruled that she had been unjustifiably disadvantaged through the lack of an Employment Agreement.  Read more…

Tax Deductions

What can I claim as a tax deduction?

What you can claim as a tax deduction is based on legislation and case law. The law is Income Tax Act 2007 (plus amendments and related regulations) and has two parts that need to be considered:

Section DA 1:  The General Permission Test - expenditure incurred in deriving business income.

 Section DA2: The Private Limitation Test - that is spending that is not of a private or domestic nature.

Expenditure deductions must be necessarily incurred in production of assessable income and not private in nature. Read more…