Use free services from Inland Revenue
Inland Revenue (IR) have a wealth of resources to help you meet your legal obligations. They offer a free tax information service to new businesses to help with tax compliance, and free tax seminars and workshops.
Also, their website features useful tax articles, frequently asked questions, and various tax documents and forms.
Stick to the due dates
It’s important to file your tax returns and pay your tax on time, as there may be penalties if you don’t.
Your accountant can help you sort out a calendar of dates for when you’ll need to pay provisional and terminal tax, GST, and other tax obligations. You can also use Inland Revenue’s tax due date calendar.
Keep good records
You must keep business records for at least seven years, and they need to be accurate and up to date.
In particular, you’ll want to keep:
- Bank records to show your sales and expenses
- Invoices for sales, purchases, and expenses
- Your cashbook and petty cashbook
- Wages book, if you have staff.
Accounting software can make keeping these records much easier.
Put money aside for tax payments
Avoid being hit with an unexpected tax bill by estimating what you’ll need to pay and putting money aside, e.g. in a savings account such as an ANZ Business Premium Call account.
Similarly, when you receive payment for goods and services, deduct the GST and put it aside to ensure you always have enough to pay your GST returns.
Understand what you can claim
You can offset your legitimate business expenses against your taxable income. For example, if you operate a business from home, you may be able to claim some of your home costs as business expenses.
But it’s important to know what you can claim and what you can’t. Your accountant can provide more information, or read more about it on the Inland Revenue website.
Be proactive if you have problems
If you make a mistake calculating your tax or don't think you can pay a tax bill, contact your accountant or Inland Revenue as soon as possible to discuss a plan to fix things.
Don’t put it off. The earlier you let them know, the easier you’ll sort things out.
Consider using an accountant
Using a chartered accountant as your tax agent (submitting tax returns on your behalf) and as a tax adviser can save you a lot of time, effort, and stress. They deal with tax issues every day and are up to date with all the latest tax rulings and changes, giving you the space to focus on your business.
An accountant can also:
- Help you set up a good record keeping system and a calendar of tax returns to streamline your tax compliance
- Send you reminders of due dates for tax returns, helping you avoid late payment penalties
- Prepare your end-of-year tax returns for you
- Help you claim all the expenses you're entitled to
- Advise you about tax matters such as leasing versus buying equipment, or whether to use a private vehicle or company car.
Of course, you’ll need to pay for your accountant’s services – but it could be money well spent.
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