You must register for GST if your annual turnover exceeds $60,000. You may be charged penalties if you fail to do so.
Goods and service tax (GST) is a tax that applies to most goods and services in New Zealand. You charge GST in your sales and income and claim it back for your purchases and expenses. The difference in your GST return is then calculated to see if you need to make a GST payment to IRD or receive a refund from them.
Save time and ensure you claim on all the business expenses you can claim back by employing Glenfield Tax Accountants can do your GST returns for you.
We will help you decide which accounting basis is best for your business, and also which taxable period is most suitable. Please see the options outlined below.
When do I need to submit my GST returns?
You also need to decide on an appropriate taxable period. You have 3 options for this: monthly, two-monthly or six-monthly. The standard taxable period is two-monthly. Only small businesses may apply for the six-monthly option.
Give our friendly team a call to discuss your requirements.
GST is accounted for in the taxable period in which you make or receive payment. This option is suitable for small businesses as it means you usually only account for GST when payment is received from the customer. This is to your benefit if your payment terms are lengthy. However, this also means you can only claim GST on purchases and expenses after making payment to your supplier.
GST is claimed when you receive or issue an invoice, or receive and make a payment – whichever comes first. Adjustments are made at the end of the taxable period for creditors and debtors. GST claims are made on purchases and expenses before making payment to the supplier, except for second-hand goods. A potential disadvantage of this option is that you may have to account for GST prior to receiving payment. You will also need to produce a list of all your creditors and debtors at the end of the tax period to account for the items you have received or issued an invoice for but aren’t recorded in your cashbook.
This option incorporates the ‘payments basis’ and the ‘invoice basis’. You claim GST on your purchases and expenses using the payments basis, and you account for GST on your sales and income using the invoice basis. No adjustment is needed for creditors. However, you will be required to keep a list of your debtors at the end of the tax period to account for the items that don’t appear in your cashbook.