YOUR MIDWIFERY BUSINESS
managing your self-employed business – time for a spring clean? MICHAEL STIRLING FINANCE MANAGER, MMPO
Now that spring is upon us, it’s an ideal time to take stock and reevaluate areas of your business that have potentially been neglected, and could be costing you unnecessary money, time or energy. We suggest examining your business and personal situations by attending to the following obligations. INSURANCE NEEDS When was the last time you reviewed, in earnest, both your business (including ACC) and personal insurance cover policies? As part of managing your day-to-day risk, you should ideally engage with your broker on an annual basis, ensuring both you and your whānau are covered appropriately given your age, debt profile and stage of work. Further, your broker will also be able to confirm whether you may in fact be overinsured, and consequently paying too much. Ideally, you should have a broad range of insurance that meets your needs, with a relevant mix of life cover, income and mortgage protection, personal trauma, and ACC Cover Plus Extra. Your broker will be able to assist in recommending a balanced package, considering all known factors, including affordability. Schedule a meeting today - the broker’s time and service is free of charge, so you have nothing to lose and plenty to gain.
HOME UTILITY BILLS
KIWISAVER & OTHER INVESTMENTS
When did you last deep-dive into the present cost of your phone, broadband and energy plans? Have you considered signing up for a bundled package instead, as they are often cheaper? Utility companies are continually marketing deals to attract new customers. Even if you don’t want to change vendors, you can still obtain a superior deal with your existing provider by leveraging those competitor offers. You may well be pleasantly surprised at the potential savings.
Similar to insurance, review your KiwiSaver scheme, confirming you’re in the correct portfolio, considering your respective age and stage of life profile, as well as your overall risk appetite.
EXPIRY DATES Take a moment to check on expiry dates that can often creep up, including: • CV check • Vehicle registration and WOF • If you own a diesel vehicle, ensure your Road User Charges (RUC) are up to date. • Driver’s licence and passport • Vehicle logbook* * A vehicle logbook is used to determine the correct proportion of business versus personal usage, for the purposes of claiming vehicle related expenses. Inland Revenue rules state a logbook must be maintained for 90 consecutive days; the calculation based on those 90 days may then be used for up to three years. After three years you need to keep a logbook for another 90 consecutive days.
LEGAL & TRUST CONSIDERATIONS
HIRE PURCHASES/LEASES/LOANS
Update your last will and testament, including memorandum of wishes. If you don’t have a will, contact your solicitor or Public Trust Office, and arrange to have one prepared. In turn, this will allow your whānau to relax somewhat, providing peace of mind. If you utilise a family trust, familiarise yourself with the new Trusts Act 2019, ensuring compliance and an assessment as to whether it remains a suitable structure going forward.
In relation to credit contracts, operating leases and business loans, it’s very easy to lose track of where you are within the repayment plan cycle, which can often run over a series of months or years. Thus, review the original documentation, or contact the loan provider to confirm your current balance, including when your instalments are actually due to expire. Avoid late payment penalties and additional interest costs by paying on time, every time.
14 | AOTEAROA NEW ZEALAND MIDWIFE
Place a note in your diary to confirm by 30 June each year that you have managed to contribute the minimum amount of $1,042.86 over the preceding 12-month period, in order to receive the maximum Government subsidy of $521.43 per annum. Further, if you want to keep it simple and not have to think about it, we recommend you set up an automatic payment of $90 per month, in order to secure this ‘free’ money each and every year. The same principle applies to any other investments you may hold, whether it be term deposits or shares. It isn’t a ‘set and forget’ process; you need to review periodically for appropriateness, based on current level of interest rates, inflation, etc. If you hold a residential mortgage for the home you personally reside in, remember the key to future prosperity is endeavouring to pay it off as quickly as possible. HOME OFFICE CLAIM For tax purposes, you are entitled to claim a percentage of certain household expenses; namely broadband, energy bills, landline, rates, rent and/or mortgage interest, repairs/ maintenance, and consumables, such as lightbulbs and toilet rolls.The home office percentage allowable is based on the proportion of the total floor area of the house and garage that is utilised for running your business, which typically ranges from 10% to 40%, depending on the size of space used. It’s a good idea to revisit this number each year, in case you have relocated to a new dwelling, moved office rooms within your
