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Tax Talk Newsletter Apr / May 16
Meeting tax payments on 7 April
-Payments for end-of-year income tax, student loans and overpaid Working for Families Tax Credits for the 2015 tax year are due for all customers who have an extension of time because they are on a Tax Agents list. If you are worried about meeting this deadline, check out IRD’s payment options.
This March, IRD will be issuing letters to some taxpayers to remind them of the due date. Then in early April IRD will be sending text messages with a further due date reminder.
For clients who have lost their extension of time their tax payment is due on 7 February so you should be talking to the IRD now if you think you'll struggle to pay in full.
You can pay IRD via internet banking and debit or credit card payments.
If you can't make the payment in full, you can make an instalment arrangement proposal online at www.ird.govt.nz. Search for ‘proposal’ and complete the questions in the online form. In most cases they will accept regular manageable amounts. If you need a hand to get this done please contact the IRD.
- IRD will be sending other reminders such as:
- letters to some customers from 22 March that will direct them to the IRD website
- a message in letters to some customers about unpaid provisional tax and the interest that can add up when this remains unpaid
- a message in letters to some customers with a 7 April due date that they already have unpaid amounts with the IRD
- text messages to some customers from the week starting 28 March to prompt payment due on 7 April
- social media messaging to provide timely reminders of the 7 April due date.
IRD won't send reminders to customers who paid on time last year.
To prevent penalties and interest from adding up, the IRD recommends full payment or an agreement to make payment(s)
The early quote gets the worm
There are the quick and the dead. Act quickly, or your business will die.
An example is Geoff, who rang Michael the tiler. Would he be interested in quoting for a job? Michael was keen and asked for contact details to be emailed, which Geoff did.
Then the phone rang.
“How about 3.30 this afternoon to look at the job?” Michael asked.
When Michael had finished inspecting the site, he asked about Geoff's requirements and told Geoff what he needed to do before he started, then he sat in his vehicle for a while writing notes.
The next morning the quote arrived. Michael worked out how much time he would probably need and the number of visits to do the job. The cost appeared to be fair. It was about $1400 and fully detailed, so Geoff accepted.
Why would Geoff bother getting another quote? He might get a slightly lower price and he might get a lousy job. Michael had already proved his efficiency.
Our message to you: Be very quick with your quotes and give the appearance of efficiency. Not everyone gets multiple quotes and even when they do, half the time they never hear again from the tradesman. Yours could be the only quote, but if it’s not, you might be the only one who follows up on it.
Money loves speed.
How to win a tender when you lose
Failing to win a tender is always disappointing, but using the information provided in your post-tender debrief can help you turn a single loss into a series of future wins. Here are 3 quick tips to help you turn feedback into a competitive advantage.
Tip #1: Know what to expect in a debrief
Whether you win or lose in the tender process, you can ask for a debrief from the buyer. The aim is to learn, from the buyer’s viewpoint, where your solution can be improved. This can give you a better idea of your capabilities, credibility and value-add components, so you can win more business in the future.
Debriefs can take place over the phone, by e-mail/letter, or face-to-face, and usually cover:
- An explanation of how the vendor came to their final decision.
- An explanation of why your tender was or was not chosen.
- Constructive feedback about the strengths and weaknesses in your tender proposal.
Tip #2: Ask questions to maximise your feedback
It’s important to ask questions during your debrief. If the topics listed above are not fully covered, ask for details. If there’s anything outlined in the debrief that you don’t understand, ask for clarification. You could also ask:
- Where did my proposal rank compared with others—both on technical merits and on price? Buyers are unlikely to tell you the exact price of the winning bid, but they can let you know how your price ranked, compared to others.
- Who won the tender? It’s acceptable to ask who won & why. Then you can compare your operation with the successful supplier and identify some of the differentiators.
- How could my ideas have been better presented?
If there’s a problem with the way you’re writing and structuring your proposals, you want to know about it. - How can my company improve our offerings to meet your future needs?
Use this as a chance for promotion & relationship development.
Tip #3: Be prepared to give the buyer feedback
The buyer might ask for your feedback on the procurement process, especially if they’re a government agency. They’re likely to ask you what parts of the request and tender process worked well, or could use improvement. Being able to provide the buyer with valuable feedback is a powerful way to build your relationship.
Advertising for profit
Do you measure your responses from
advertisements? How many of those responses turn into sales? Don’t know? Then ask your new customers, every time, why they came to you.
Further, have a look at the quality of customers you’re attracting, in other words, whether they're serious about what you offer. There’s no point in advertising for poor quality business.
Above all, keep figures to see if the advertising is earning its keep. The revenue you derive from your advertising is not just what you get from the first sale. It's the earnings over the lifetime of that customer. So if the average customer stays for five years, measure the expected sales you're going to make over this time. The profit on those sales needs to exceed the cost of the advertising.
Advertising is expensive. Some people advertise, get responses but never follow up. Perhaps they have more business than they can handle! If this is you, why advertise?
Examine your return on your advertising. Keep records. If your advertising works, that’s fine. If it doesn’t, save your money.
Can a Beneficiary seek information such as Trust accounts from the Trustees?
YES THEY CAN.
Beneficiaries of a trust (including a testamentary trust) are entitled to information relating to the trust regardless of whether they are sui juris (of age).
The only authority that a parent of a beneficiary requires to seek trust information on behalf of a minor beneficiary is proof of the fact that the parent is a guardian of the minor beneficiary. By virtue of that status as guardian, a parent is entitled to seek information (see The Cats' Protection League v Deans).
In the Goodman v Campbell case a minor beneficiary's mother sought appointment as a litigation guardian following an executor's refusal to provide information about the estate of which her minor son was the sole beneficiary. The trustee of the estate had been noted as being "uncomfortable in the absence of some express authority in releasing information to someone who was not a beneficiary of the trust".
After making the appointment, in the interests of progressing matters the Court directed on 8 May 2015 at [9] that:
" ... a copy of this judgment is to be served on Mr Campbell, through his solicitors, and that Ms Goodman abstain from filing the proceeding for a period of 10 working days after that to ensure that Mr Campbell has an opportunity to consider the judgments of the Privy Council in Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] AC 709, and of the High Court in Foreman v Kingstone [2004] 1 NZLR 841. From his present stance, as far as it may be gleaned from the correspondence produced to the Court in support of this application, it could possibly be inferred that he has overlooked the principles of law applying to his duty of disclosure, which are discussed in these cases."
REFERENCE:
Goodman v Campbell HC Christchurch CIV-2015-409-000259, 8 May 2015.
Goodman v Campbell HC Christchurch [2015] NZHC 2780.
The Cats' Protection League v Deans (2010) 20 PRNZ 584.
Furness v Public Trustee [1922] NZLR 920 at 923.
How small businesses can get going with GETS
Government contracts aren’t just for big players. Small and medium businesses are winning contracts through the New Zealand Government Electronic Tenders Service (GETS).
GETS is a free online service designed to promote open and fair competition for government contract opportunities.
Business’s who use GETS advice to other small businesses thinking of using GETS is to spend time getting to terms with both the tender document and process, as well as to ask for help when it’s needed.
The MBIE staff managing the tender process are very good and quick to respond to questions. Here are more tips for small and medium businesses thinking of tendering for government opportunities on GETS.
Tip 1 - Get registered
Register yourself as a supplier on GETS. For tips and advice, go to http://www.business.govt.nz/procurement/for-suppliers/gets/frequently-asked-questions
Tip 2 – Sign up for targeted alerts
You’ve got to be in it to win it. By adding codes and regions to your GETS supplier profile, you’ll receive alerts on tenders that are specific to your business. Read the instructions on the GETS website.
Tip 3 – Keep in the loop
Keeping up to date on tender developments can be really helpful. To do this, you’ll need to subscribe to the tender. Find instructions in the user guide on responding to tenders.
Tip 4 – Ask questions
If you have questions on a tender opportunity, don’t hesitate to contact the representative listed on the tender. Talk through anything you’re unsure about.
Tip 5 – Keep your eyes peeled for sub-contracting opportunities
Even if you’re not large enough to supply to government, that doesn’t mean the door is closed to your business. There are plenty of sub-contracting opportunities available for small businesses.
Visit the Awarded Tenders page on GETS to find out which major suppliers have won contracts. If you see one that might fit you, approach these larger suppliers to discuss how you might work together.
Tip 6 – Talk the talk
For jargon-busting and tendering tips, read the article on Six mistakes to avoid when bidding for contracts.
Important: This is not advice. Clients should not act solely on the basis of the material contained in the Tax Talk Newsletter. Items herein are general comments only and do not constitute nor convey advice per se. Changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. The Tax Talk Newsletter is issued as a helpful guide to our clients and for their private information. Therefore it should be regarded as confidential and should not be made available to any person without our prior approval.