Inland Revenue

April Tax Due Dates

Start the new financial year off right – add these  April  Tax Due dates to your calendar now

April Tax Due Dates

Start the new financial year off right – add these dates to your calendar now and get your returns filed on time. Avoid paying penalties.

Get the new Financial year off to a flying start and Make note of these April Tax Due Dates now.

  • 1st Start of the 2017 Financial Year
  • 7th 2015 End of year (Residual) Income tax payment due (with Tax Agent)
  • 7th Income Year FBT return and payment due (with Tax Agent)
  • 20th PAYE return and payment due

Note: If a due date falls on the weekend the date is moved to the Monday following. Also be aware that both payment and returns must be received by the IRD on or before the due date.

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March Tax Due Dates – 2016

Put your feet up knowing that your returns and payments will be filed on time. Add these March Tax Due dates to your diary now!

March Tax Due Dates to note:

  • 20th PAYE return and payment due
  • 28th GST return and payment due (monthly filing)
  • 31st 2015 Income Tax Return Due (with Tax Agent)
  • 31st Last day of the 2016 financial year (standard balance date)

Note: If a due date falls on the weekend the date is moved to the Monday following. Also be aware that both payment and returns must be received by the IRD on or before the due date.

If you are struggling to find the time to get your returns filed let alone put your feet up – Then it’s time to get in touch. We can help ease the load and get those bookkeeping tasks completed for you in no time. Contact me know to discuss how we can help YOU!

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Registering for GST

At what point do you have to become GST registered?

In this article we look at registering for GST – including when, how and talk you through the choices you need to make.

Registering for GST

The Inland Revenue Department says that you must register for GST if:

  1.  your turnover exceeds $60,000  in a 12 month period.

or 

  1. if you expect to exceed $60,000 turnover in the next 12 month period.

Note: This applies to any 12 month period, not just a financial year.

You can also register voluntarily before you reach this threshold.

” OK, I think my turnover is going to reach the threshold. What Now?”

You will need to Register for GST (you can do this through your IRD online services account (Login Here)

Before you register you will need to know or work out your IRD Number, BIC (Business Industry Classification) Code, Accounting Basis (GST) and choose your Taxable Period.

Lets look at each of these in a bit more detail:

  • IRD Number – this is your own IRD number if you are a sole-trader, or the number that was issued to you for your partnership, trust or company. If you can’t remember your IRD number you can call the IRD helpline on 0800 377 774 to confirm it. Otherwise you will need to complete an application form to apply for one. (For an Individal you will need to complete an IR595 or a non-individual an IR596)

 

  • BIC Code – your business industry classification code can be found by searching on the ACC Website here

 

  • Accounting Basis – this is how you account for and claim GST. There are 3 options available Payments, Invoice and Hybrid Basis (very rarely used – so not covered in this post).

Payments basis is the most common choice. Under the payments basis you pay tax on the payments           you actually make and receive (i.e. what happens in your bank account).

Worked example for GST

Here are the explanations from the IRD website for those who are interested:

IRD Details of Invoice Vs Payments Basis

  • Taxable Period – is how often you wish to file your GST returns with the IRD. Again there are 3 choices Two Monthly (the most common option), Monthly and Six-monthly.

“I’m still feeling unsure… what should I do?”

GST can seem daunting when you are new to it… and like most things you want to get it right from the start. I recommend taking with your accountant or bookkeeper if you are unsure about anything at all (don’t have one – get in touch now). Remember we have a lot more experience with these things and often your mind will be put at ease after a single phone call or email.

Further Resources:

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Basic End of Year Financial Checklist

End of Financial Year end Checklist

So with the end of another financial year almost upon us it is time to check that your business accounts are in order ready to hand over to your accountant or for you to complete your tax return yourself. Some of these things you can get onto now, while others can’t be completed just yet (but you can always make a start)…..
To continue reading this guest post pop over to The Baby View article here

If you have any questions you can get in touch with me at dothesums.nz@gmail.com

Source Documents

Source Documents

So you have just started you new business or perhaps you have been going for a while now… And someone mentions ‘Source Documents’ to you. Do you know what a source document is and why you need them, do you know how long you need to keep them for?? Yes, Sort-of….  Okay, lets break it down for you.

What is a Source Document?

“A source document is the original record containing the details to substantiate a transaction entered in an accounting system.”

Types of Source Documents

  • Invoices to customers or from suppliers
  • Receipts for purchases or sales
  • Credit Notes
  • Cheque & Deposit Books
  • EFTPOS and/or Credit Card Chits
  • Bank Statements
  • Purchase orders
  • Hire Purchase Agreements
  • Loan Documents
  • Sale & Purchase Agreements
  • Petty Cash Book

Why do you need to keep source documents?

Source Documents are important for many reasons, firstly that they allow you to enter the transaction accurately into your accounting system. Secondly, source documents provide a document as proof of a transaction and the amount etc. for example if a supplier sends you an invoice for goods that you have already paid cash for. The receipt can be shown as proof to the supplier to show that you have in fact paid for the goods. Thirdly, EFTPOS or Credit Card Chits are also essential to have if your Merchant (e.g. bank) has a query come through from the credit card company, you need to provide details of transaction including the chit and receipt showing what the purchase related to.

Source documents also have an important accounting function if your business needed to be audited (either by the IRD or for other reasons). An auditor will select transactions at random and check that you have the source documents to prove that the transaction actually took place, and that it has been entered correctly into your accounting system.

How long do you need to keep these documents for?

In New Zealand the Inland Revenue Requires that you keep all Financial Records (including source documents) for at least 7 years. It is a great idea to add these all into a single box for each year, so the details are easy to find if you need to access them.

More Reading

Business Structures - which is right for you?

Sole trader, Partnership, Company or Trust. Do you know which business structure is best for you and your business?

Business Structures - which is right for you?

In this blog post I will give a basic overview of the various structures including advantages and disadvantages.  To be sure that you have made the best decision I recommend talking through your specific situation with your accountant or bookkeeper.

Sole Trader

Sometimes known as a sole – proprietor, this is the simplest and most common form of business structure.

Advantages

  • Easiest structure to set up.
  • You and your business are one and the same.
  • Low/No set up costs

Disadvantages

  • As you and your business are considered the same legal entity you are responsible for the payment of any business debts.
  • Your personal assets could be at risk should you be sued or the business fail.
  • You can’t legally stop someone else using your business name (although trade marking your brand and logos etc. can give some protection.)

Partnerships

The Partnership Act 1908 defines a partnership as
“The relationship which subsists between persons carrying on a business with a view to profit.”

So a partnership is similar to a sole trader only there is more than one person involved. A partnership is usually governed by a partnership agreement.

Advantages

  • Relatively easy and cheap to set up.
  • Allows a potential combining of funds and/or skills from each partner.

    Disadvantages

  • A partnership is not a separate legal entity, and the partners are jointly and severally liable for the partnership debts.

•  A partnership must have its own IRD number, but is is not a taxable entity, so all profits (or losses) are split and each individual is taxed on his or her share.

•  A partnership is a separate accounting entity so must complete a partnership tax return (IR7) for the IRD, this helps ensure the partners are taxed on their share of the profits.

Trusts

Trusts are another choice of structure although probably least common structure for businesses. Trusts are mostly used in the protection of assets.

Companies

Companies are a really common structure for businesses in NZ both big and small. Companies are a separate legal entity, and are owned by its shareholders.

Advantages

  • Shareholders have limited liability.
  • it can be easier to raise additional funds/money.
  • Easy to transfer ownership.
  • Provides protection of your business name.

    Disadvantages

  • Higher set up and ongoing costs associated with registering.
  • Higher compliance costs.
  • More complex to cease trading ( if not selling) than other structures.