Navigating the world of GST returns can be challenging for New Zealand business owners, but with the right knowledge and tools, you can make the process much easier. A well-managed GST Return is not only crucial for your business’s financial health, but it can also help you avoid penalties and even save money. This article covers key GST return tips and hacks every New Zealand business owner needs to know to simplify the process and maximize your savings.
What is a GST Return and Why Does Your NZ Business Need It?
GST, or Goods and Services Tax, is a consumption tax applied to most goods and services in New Zealand. As a business owner, if your annual turnover exceeds NZD $60,000, you are required to register for GST with Inland Revenue (IR). Once registered, you must submit regular GST Return to report the tax you’ve collected from customers and the GST you’ve paid on business expenses.
The GST return you submit to IR details the GST you owe or the refund you qualify for. It is essential to file your GST returns accurately and on time to avoid penalties and interest. The GST return process may seem complex, but with the right approach, it doesn’t have to be overwhelming.
Key GST Return Deadlines You Need to Know
One of the most important aspects of managing GST returns is keeping track of the filing deadlines. As a business owner, you’ll be required to file your GST Return at regular intervals, either monthly, quarterly, or annually, depending on your business’s GST cycle. Understanding these deadlines is crucial to avoid late fees.
For businesses on a monthly cycle, returns are due by the 28th of the following month. For businesses on a quarterly cycle, returns are due on the 28th of the month following the end of each quarter. Lastly, if your business files annually, your return is due on the 7th of the month following the end of your financial year.
It’s easy to miss a deadline, especially when juggling the demands of running a business. Set up reminders in your calendar or accounting software to stay on top of your filing obligations. For businesses that struggle with deadlines, seeking help from a professional accountant can be a game changer.
GST Return Preparation: Common Mistakes to Avoid
Many business owners face challenges when preparing their GST returns. Proper preparation can easily help you avoid some of the most common mistakes. These mistakes can lead to penalties, incorrect filings, and missed tax deductions
A frequent error is failing to keep accurate and up-to-date records. Without detailed and organized records, it’s easy to miss important transactions or overlook eligible expenses. Ensuring that all invoices and receipts are correctly filed and categorized is crucial for preparing an accurate GST return.
Another common mistake is incorrect GST calculations. You may inadvertently calculate the GST you owe or the GST credits you can claim. Double-check your calculations before submitting your return. The GST Return you owe is based on your sales (output tax), and the GST you can claim is based on your business purchases (input tax). If the numbers aren’t accurate, you could either overpay or underpay your tax obligations.
Finally, failing to account for all sales and purchases can lead to significant errors. Business owners sometimes miss small transactions or forget to include certain expenses when claiming GST credits. Always review your books and records to ensure that everything is accounted for, no matter how small the transaction.
GST Return Hacks to Save Time and Maximize Efficiency
Filing your GST Return doesn’t have to be a time-consuming task. There are several hacks you can use to save time, reduce errors, and streamline the process.
One effective hack is leveraging accounting software. Today’s accounting software can automate many of the steps involved in preparing a GST return, such as tracking sales, categorizing expenses, and generating reports. This reduces manual work and helps ensure that your GST return is accurate.
Automated reminders are another time-saving hack. Set up recurring reminders in your calendar or accounting software to notify you of filing dates and any required actions. This ensures that you never miss a deadline.
Another useful hack is keeping your receipts and invoices organized throughout the year. If you’re like many business owners, keeping track of paper receipts can be a hassle. Consider scanning your receipts and storing them digitally. You can also use apps that integrate with your accounting software to make sure you’re always prepared for your next GST filing.
Finally, consider using a professional tax agent or accountant to handle the complexities of your GST return. A tax professional can ensure that your GST filings are accurate, up-to-date, and submitted on time. They can also help identify areas where you can maximize GST credits, saving you money in the long run
GST Return Hacks for Business Owners Who Outsource
Outsourcing certain aspects of your business, like bookkeeping and payroll, can make your GST Return process much smoother. By delegating the tasks that take up the most time, you can focus on running your business and leave the technicalities to the experts.
When you outsource your bookkeeping, your financial records will be in good hands. A bookkeeper can ensure that all transactions are accurately recorded and categorized, which means you won’t have to worry about missing important details when it’s time to prepare your GST return. By relying on a professional, you also reduce the risk of errors.
In addition, outsourcing your payroll process can streamline your GST filing. Your bookkeeper or accountant can track payroll-related expenses and ensure that all wages and benefits are accounted for when you file your return. This ensures that your GST calculations are as accurate as possible and that you can claim all allowable credits.
Another benefit of outsourcing is that you gain access to the expertise of business consultants and tax agents. These professionals can provide valuable advice on optimizing your GST return, helping you save both time and money. If you’re not sure whether outsourcing is right for you, it’s worth consulting with an accountant to discuss the potential benefits for your business.
GST Return: Maximize Your Refund
One of the most important reasons to file your GST Return accurately is to maximize your refund. Many business owners overlook certain credits they’re entitled to, which can result in leaving money on the table.
To maximize your refund, ensure that you claim all allowable GST credits on business-related purchases and expenses. For example, you can claim GST on office supplies, equipment, and other purchases related to your business. If you’ve made capital purchases, like new machinery or vehicles, you may also be entitled to claim GST.
Another important step is reviewing your input tax credits. These credits are based on the GST you’ve paid on business expenses, and they can significantly reduce the amount of GST you owe. Keeping detailed records of all purchases and receipts throughout the year makes it easier to claim these credits when it’s time to file your return.
If you’re unsure whether a purchase is eligible for a GST credit, it’s always a good idea to check with a tax professional. They can help ensure that you’re not missing out on any potential savings.
Troubleshooting Common GST Return Issues
Sometimes, things don’t go as smoothly as planned, and you may run into issues when filing your GST Return. Here are a couple of common issues and how to address them:
GST errors after filing: If you notice an error after submitting your GST return, it’s important to act quickly. You can amend your return by submitting an updated version to IR. Make sure to correct any mistakes and double-check your numbers to avoid any further issues.
Late filing penalties: If you miss a deadline for filing your GST return, you could face penalties and interest. The best course of action is to file as soon as possible to minimize the additional charges. If you have a valid reason for missing the deadline, such as illness or unexpected circumstances, you may be able to request a remission of the penalty from IR.
When in doubt, always consult with an accountant or tax agent to resolve any issues you encounter.
Why an Affordable Accountant in Christchurch Can Make a Difference
While DIY solutions can be effective, sometimes the expertise of a professional is the best way to ensure your GST Return are handled properly. An affordable accountant in Christchurch can offer you personalized advice and take the burden of GST returns off your shoulders.
An accountant will ensure that your GST filings are accurate, timely, and compliant with the latest regulations. They can also help you identify deductions and credits that you may have missed on your own. With an accountant’s support, you can focus on running your business without worrying about the complexities of GST compliance.
Conclusion
Managing your GST returns doesn’t have to be stressful or overwhelming. By following these tips and hacks, you can simplify the process, save time, and avoid costly mistakes. Whether you choose to handle your GST Return in-house or outsource to a professional, understanding the key elements of the process will help you stay on top of your business’s finances and maximize your savings. If you’re unsure about any aspect of GST filing, it’s always a good idea to seek the help of an affordable accountant or tax agent who can guide you through the process.
