Category 1
How is profit determined for a self employed person?
Income/ Earnings -Expenses= Profit (Net Earnings)
31st March and 3oth June
Can a client who is a partner in a business but doesn't contribute to the day to day working's be an earner for that business?
No- Unless they are working and earning from that company. The client should be undertaking work carried out for pecuniary (financial) gain or profit.
What earnings does ACC use to assess weekly compensation on?
NET EARNINGS (Income- Expenses= proft/ net earnings)
Name the two CPX policies a client may have?
-Lower Level Cover Plus Extra (LLCPX)
-Cover Plus Extra (CPX)
-Shareholders has an established business separate to themselves and are an employee of the company
-Company debt separate to personal assets
-Profit able to be able kept within company- whereas profit earnt by self employed is considered income
-Shareholders can receive earnings as PAYE or end of year salary whilst self employed lodge return at end of the financial year
- Look for Limited at the end of the business name
-Check New Zealand Companies office register
CPX isn't abated
What can a self employed person provide to confirm they are an earner?
•Copy of a written contract or agreement
•Proof of purchase of goods for future jobs
•A letter from the clients bank or accountant
•A signed statutory declaration
If a client has not passed a balance date, what type of self employment are they?
- NEWLY self employed
We can accept a client was self employed if they confirm...what?
•They were working immediately prior to incapacity
•Have been in self-employment long enough to pass one balance date, or
If they have not passed a balance date, evidence has been provided that they are self employed
How is Lower Level CPX abated?
When a client returns to work on light duties, it is reduced by dollar for dollar for the clients earnings. No 20% abatement threshold.
If a client has passed two balance dates, what type of self employed are they?
-Established self employed
Your client has a DOFI as 01/01/2025 and you have run an RTE and you can see their last held schedular income is to 20/12/2024. What are your next steps?
- Future dated RTE to confirm earnings are held right up to DOFI.
What is the tax which a schedular client can nominate to have taken from their wages by their 'employer'?
Witholding Tax
When you are trying to confirm if the client is newly, recently, or established, we need to look at their work history for how many years prior to DOFI?
- TWO years