What To Know About GST In New Zealand
GST is a tax added to most goods and services, and businesses that make more than $60,000 annually are legally required to register for GST. You must register once you think you’ll earn over $60,000 annually, or you may face penalties.
Once your business is registered, then you need to collect GST on your sales, or output tax, and you can claim back GST on your business purchases, or input tax.
Calculating your GST is an important part of fulfilling your tax obligations. Here is a basic outline of what you can expect for your GST return process:
Record-Keeping. To stay on top of your business’s finances, it’s vital that you have a solid and well-thought-out record-keeping process. Ensure accurate and meticulous record-keeping so that no detail goes unnoticed. Make sure that every business transaction is recorded with GST clearly identified, as this will help you calculate your GST later.
Filing Frequency. NZ businesses can file their GST returns monthly, bi-monthly or six-monthly, depending on their annual turnover and preference. Consider your preferences and the needs of your business to determine the best way to handle your GST filing. Additionally, once you’ve selected your frequency, make sure everyone who handles finances for your business knows the option you’ve selected so that everyone can stay on the same page.
Calculating GST. You must calculate the GST collected from sales and the GST paid on purchases, and this calculation will determine whether you owe GST to the IRD or if you are eligible for a refund.
Filing The Return. GST returns can be filed electronically to the IRD.
Payment Or Refund. Once your return is filed and seen by the proper people, then your business will need to either make a payment to the IRD for the GST you owe or you will receive a refund if your input tax exceeds your output tax.
Common GST Challenges Faced By NZ Businesses
As with any financial matter, it’s crucial for you to understand the common issues faced by NZ business owners regarding GST returns. Here are a few challenges that business owners may face and what you should take care to avoid:
Missed Deadlines. It’s essential to stay on top of deadlines and avoid rushing. Make sure you understand your filing frequency and deadlines, and give yourself enough time to file your returns carefully and correctly.
Incorrect Calculations. Errors in GST calculations can result in underpayment or overpayment. This may lead to penalties from the IRD.
Misclassification Of Transactions. While many transactions are subject to GST, not all of them are. Misclassifying them can lead to incorrect GST returns.
The Role Of A Qualified Accountant For Proper GST Filing
Correctly handling GST returns and financial matters in general is an extremely vital part of being a smart NZ businessperson. However, that doesn’t mean doing so is easy. Finances can be overwhelming, confusing and stressful. Luckily, you don’t have to work on your finances alone.
A qualified NZ accountant can assist you with everything discussed in this article and more. Here are just a few ways in which your reliable accountant can help you with your GST returns:
- Advanced Expertise And Knowledge. A qualified accountant is well-versed in New Zealand’s tax laws and regulations. Because these laws can change, they stay up to date with evolving policies and inform you of changes that affect your particular business. They can use their experience and growing knowledge to provide you with valuable advice regarding GST registration and any other financial concerns you have.
- Strategic Planning During Complex Situations. If your business is facing any complex issues, such as late GST returns or disputes with tax authorities, then your accountant will help you manage these issues with patience and efficiency. They’ll help you get back on your feet and assist you with planning your finances more successfully in the future.
- Peace Of Mind. Overall, their professional help can give you peace of mind. Finances are stressful, but their expert assistance can keep you calm and level-headed.
Securing Financial Stability With Professional Accounting Assistance In New Zealand
We at Allan Chartered Accounting understand that finances can be complex, which is why we’re so dedicated to providing our Auckland clients with useful, efficient and personalised accounting services. We’re happy to help with GST returns, and we also have experience with general tax accounting, business coaching, bookkeeping and more.
To get in touch, please call us on +64 9 418-2537 or use our contact page.
Allan Chartered Accounting: Let us help you get your financial management in order.