Keeping on top of the tax obligations for your business is obviously important. You want to make sure you pay the correct amount of tax, and pay it on time to avoid penalties with the IRD.
This is not difficult, especially with the help of your accountant, but it does require a certain amount of admin. This is made much easier if you are organised, and to that end, you’ll find some recommendations below.
1. Set up two separate bank accounts for the business. The first is for operating out of. The second account is for GST and your tax obligations – put a portion of your income into this account each time you get paid.
2. Do not use the business accounts as your personal bank accounts. Instead, transfer funds from your business account to your private account on a regular basis.
3. Get an accounting package like Xero.
4. If you use your car for business purposes, keep a logbook of the business and private use of the vehicle for three months.
5. Put all your vehicle running expenses through the business, and your accountant will make a private use adjustment at the end of the year.
6. Set up a lever arch folder split into different sections: expenses, income, and bank statements. Or even better, use the bill and receipt capture function included in Xero.
7. File your invoices/bank statements into the folder as they come in, or scan as you go.
8. Reconcile your bank account in Xero at least once a month.
9. Complete GST every two months. (Your accountant can do this for you.)
10. Pay provisional tax every four months. Note if you are a new business, you will not be in the provisional tax regime until you file your first income tax return
11. Complete tax returns each year. (Again, your accountant can do this for you.)
If you have any queries about these recommendations, or if there is anything else we can do to assist, please contact your GRA Client Services Manager. Or if you are new to our practice, book a free initial meeting to discuss how we can help you.
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- Jason C, October 2023
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