Here are practical, proven ways to make GST far less painful.

1. Separate GST From Your “Real” Money

One of the simplest and most effective strategies is to set up a dedicated GST bank account.

Each time money comes into the business, transfer the GST portion (usually 15% or 1/9th of income received) straight into that account. That way:

• GST is never mistaken for profit

• Your main account shows what you can actually spend

• Filing time becomes boring (which is exactly what we want)

2. Automate Where Possible

If remembering to move GST relies on motivation, it will eventually fail.

Options include:

• Automatic bank rules that sweep a percentage of income into a GST or tax account

• Treating GST like PAYE — it leaves the account before you pay yourself

• Weekly or fortnightly transfers instead of scrambling at the due date

3. Treat GST Like a Bill, Not a Surprise

GST isn’t optional, and it’s not negotiable — so it helps to treat it like rent or power.

This could mean:

• Setting aside money each month toward the expected GST bill

• Checking “GST owed if filed today” in your accounting software regularly

• Planning for it well before the return is due

4. Make Sure Your Accounting Is Actually Correct

From a technical perspective:

• GST is only payable once you’ve provided a taxable supply

• Deposits, progress payments, and timing differences can affect when GST is due

• Incorrect treatment can mean paying GST earlier than required

From a practical perspective:

• Business expenses paid privately are often missed

• Missed expenses = higher income tax and less GST claimed

• That’s money unnecessarily left on the table

5. Maximise Legitimate Deductions

If cash flow is tight, GST can feel heavier than it needs to.

Making sure you’re:

• Capturing all business-related expenses

• Correctly apportioning mixed-use costs

• Recording reimbursements for personal spending on the business

6. Choose the Right Filing Frequency

Monthly, two-monthly, or six-monthly GST returns all suit different types of businesses and personalities.

Smaller, more frequent payments can be easier for some. Others need longer cycles, but only if they have a solid saving system in place.

This is about matching the structure to how you actually operate, not what you “should” be able to do.

If GST is a constant source of stress in your business, that’s usually a sign it’s time for better systems, not more discipline.

Disclaimer

This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Does it make sense to register for GST if you’re earning from Airbnb?

With recent changes to GST rules in New Zealand, the answer is no longer a simple yes or no. In this post, we break down what’s changed, what it means for Airbnb hosts, and when GST registration can actually work in your favour.

What Changed With GST and Short-Stay Accommodation?

From 1 April 2024, new GST rules came into effect for short-stay accommodation booked through online marketplaces like Airbnb and Bookabach.

Under these rules, the marketplace is treated as the supplier for GST purposes. This means:

• Airbnb now charges 15% GST to guests on short-stay accommodation.

• Airbnb is responsible for returning the GST to Inland Revenue, not the host.

• These rules apply even if you are not GST-registered.

To recognise that many hosts incur GST on expenses, Inland Revenue introduced a flat-rate credit system.

What Is the Flat-Rate Credit?

If you are not GST-registered, Airbnb will pass on a flat-rate credit (currently 8.5%) of the GST-exclusive accommodation charge to you.

This credit is designed to roughly compensate hosts for GST paid on expenses like:

• Cleaning

• Maintenance

• Power and internet

• Insurance

For many casual or low-expense hosts, this may be enough — and registering for GST may not be necessary.

When Registering for GST Can Be Beneficial

Despite the flat-rate credit, GST registration can still make sense in certain situations.

Example 1: High Set-Up or Renovation Costs

If you’ve spent significant money setting up your Airbnb — renovations, furniture, appliances — registering for GST may allow you to claim back the GST on those costs, which can be substantial.

Example 2: Ongoing High Expenses

If your property has high ongoing costs (professional cleaning, property management, repairs), the actual GST on expenses may exceed the flat-rate credit, making GST registration more favourable.

Example 3: You’re Already GST-Registered

If you’re already registered for GST for another business, Airbnb income may need to be included anyway. In these cases, opting out of the marketplace rules and returning GST yourself can provide better visibility and control.

When GST Registration May Not Be Worth It

GST registration does come with extra admin — filing returns, keeping records, and understanding how GST applies to mixed-use properties.

For hosts with:

• Low expenses

• Occasional or part-time Airbnb use

• No major recent purchases

…the flat-rate credit may be the simplest and most cost-effective option.

The Bottom Line

The new GST rules have simplified things for many Airbnb hosts, but they’ve also created new planning opportunities.

There’s no one-size-fits-all answer. Whether GST registration makes sense depends on your income level, expenses, future plans, and whether your Airbnb is part of a wider business.

At Accountech, we specialise in helping creative founders and property owners understand these rules in plain English — and choose the option that works best for them.

If you’re unsure where you land, we’re always happy to help.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

It feels logical — last year is familiar, easy to access, and doesn’t take much effort to understand. But relying on last year can quietly hold your business back. A better way? Compare your actual results to a budget that reflects your goals.

Why Relying on Last Year’s Numbers Can Hold You Back

Looking at last year only tells you what happened, not what should be happening now. And for most small businesses, a lot can change in twelve months.

Your business evolves

Maybe you’ve added new services, adjusted your prices, or brought in new team members. Maybe you’re focusing on a different type of customer or shifting the way you deliver your work. Last year’s numbers won’t capture any of that.

The world changes too

Markets move. Customer behaviour shifts. Costs rise. A comparison to last year doesn’t allow for any of the external forces shaping your business today.

Last year is descriptive, not strategic

It explains the past, but it doesn’t help you build the future. And small businesses succeed by being future-focussed — not by trying to repeat history.

How Budgeting Creates a Forward-Looking Mindset

A good budget isn’t a rigid spreadsheet. It’s a map. It reflects your intentions, your goals, and the decisions you’re planning to make.

Budgets encourage proactive decisions

With a budget, you’re not just measuring what has happened — you’re checking whether your business is tracking towards the direction you want to head.

Budgets keep your goals in sight

Instead of being anchored to last year, you anchor yourself to your plans. That shift alone creates clarity, confidence, and control.

Budgets help you react faster

When you compare your actual results to your budget, gaps stand out early. Maybe revenue is off track. Maybe a cost is growing quicker than expected. Maybe a project is delayed or a seasonal trend is sharper than usual. You notice quickly — and can act quickly.

A Real-World Example

Take a small creative agency, last year was a strong year for them, so they use it as their benchmark. This year their revenue looks similar on paper, so everything appears “fine”. But behind the scenes, the business has hired two new team members and invested in new software. Their pricing hasn’t kept up with increasing costs. Comparing to last year hides these issues — and the agency is heading towards a cashflow crunch without realising.

Now with a clear budget they know what revenue they need each month, how much they can afford to spend, and what their expected profit should look like. Halfway through the year they notice their actuals are tracking below their budgeted revenue target, and costs are running ahead of plan. Instead of discovering the problem at year-end, they see it in real time, and can adjust pricing, tighten spending, or change priorities before things get stressful.

The difference isn’t the numbers. It’s the clarity.

Summary / Key Takeaways

• Last year gives context, but a budget gives direction.

• Budgets help you stay proactive instead of reactive.

• Comparing actuals to a budget gives you earlier warning signs and clearer decision-making.

• Small businesses grow more confidently when they measure themselves against where they’re going — not where they’ve been.

Disclaimer

This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Here’s the key takeaway: if you’re working for an overseas employer or client while enjoying time in New Zealand, you may not be taxed here, provided you tick the right boxes.

Who qualifies?

• You can stay up to 275 days in any 18-month period without becoming a tax resident.
• The usual 183-day residency rule won’t apply to you.
• You must not have been a New Zealand resident or transitional resident immediately before becoming a non-resident visitor.
• You must be here lawfully, and your home country’s income tax system should be broadly similar to ours.

What type of work is allowed?

• Work has to be for an overseas business, employer, or client.
• You cannot provide goods or services to New Zealand businesses or people.
• For example: taking photos of Warkworth for a farming company in Italy would qualify. Doing promotional work for a tourism company in Warkworth would not.
• The employer should not require you to be physically present in New Zealand for the role itself (you are simply doing the work while located here).

What income does it cover?

The exemption applies to:
• Personal or professional services.
• Business or self-employed income from overseas that might otherwise be considered New Zealand-sourced simply because you are physically here.

This change is part of a global shift towards recognising that many people now work from anywhere. It opens the door for visitors to enjoy our lifestyle and scenery without worrying about unintended tax consequences, so long as the work is for overseas clients and the right conditions are met.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Claiming home office expenses is a legit way to reduce your tax and even get back some of the GST you pay on things like power, rent, internet and more. But for most busy business owners, working it all out at the end of the year feels like too much admin.

That’s where tools like Prosaic come in. Instead of digging through bank statements and or estimating how much of your power bill to claim, Prosaic uses AI to scan your personal bank and credit card transactions, helping you find and claim your eligible home office costs—fast.

Keen to Get This Set Up for Your Business?

Ready to make claiming home office expenses easier? You don’t need to wait until the end of the financial year to get sorted. If you're keen to get started now, sign up using our quick form and we’ll help you get Prosaic up and running. It’s simple, secure, and once it’s connected, your tax returns and GST claims just got a whole lot easier.

A Smarter Way to Claim (Without the Spreadsheets)

You’ll already know the types of home office costs you can claim on the business, things like rent, power, internet and insurance. The real challenge is getting that info out of your personal accounts and into your tax return without it becoming a weekend-long job.

Normally you'd need to review your bank account transactions, copy and pasting each month and dig up old receipts. This can seem like a lot to complete especially when you’re already working 60-hour weeks—apps like Prosaic can make the job way easier.

It links to your personal accounts, automatically finds expenses related to your home office, and helps prepare what you need for both your income tax return and your GST claims.

Set and Forget

Once Prosaic is set up, it stays connected to your bank account in the background. That means your accounting team can keep accessing your home office expenses going forward—without needing to chase you for receipts or manually dig through statements. For GST-registered businesses, this can even mean claiming relevant expenses in your GST returns automatically. Set it up once, and it keeps working for you.

Make It Count

Whether you're filing your own tax returns or working with us at Accountech, having clear records of your home office expenses can mean real savings at tax time. And with tools like Prosaic, claiming them doesn’t need to be hard work.

We’ve helped plenty of tradies and small business owners who thought this stuff was too much hassle. It’s not. You just need the right tools—and a bit of help to set them up. Sign up for Prosaic access here https://www.accountech.co.nz/prosaic-signup

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

What’s the 20% deduction?

If you buy eligible new assets (like vehicles, tools, or machinery), you can now deduct 20% of the purchase price in the first year. So, for a $50,000 ute, that’s a $10,000 deduction. Not cash back – just a reduction in your taxable income.

At a company tax rate of 28%, that 20% deduction translates to $2,800 in actual tax savings. Handy, yes. Game-changing? Not quite.

Is it worth it?

That depends. If you were already planning to upgrade or invest in something that’ll genuinely improve your business, this is a bonus. But if you’re only thinking about buying because of the deduction, take a pause.

Ask yourself:

• Can I afford it right now?

• Cashflow should always come before tax breaks.

• Will this make my business better?

A new vehicle might feel good, but will it actually help you serve more customers, finish jobs faster, or save money?

If the answer to those questions is "no" or "not really", then the instant deduction isn’t a good enough reason to buy.

Don’t let the tail wag the dog

Too often, we see businesses chase deductions and end up with gear they don’t really need. The tax benefit is there to support investment – not to justify unnecessary spending.

If you do need to invest, this 20% deduction is a genuine boost. Just make sure your purchase still passes the sniff test for business value.

If you’re a contractor, freelancer, or small business owner juggling invoices, tax returns, and foreign payments, you already know: admin is the enemy of momentum.

That’s why we’re excited about the pairing of two tools that weren’t built to work together… but do.

Prosaic: AI for the annoying stuff

Prosaic is one of the smartest tax tools we’ve seen for small business. It’s like having a tax-savvy assistant that never sleeps. With a bit of AI magic, it automatically pulls data from your bank accounts, credit cards, or even your mortgage account, and works out what can be claimed, even when those accounts aren’t connected to Xero.

This is a huge deal—especially for contractors who should be getting those home office or vehicle deductions, but don’t want to wade through personal spending to find them.

No spreadsheets. No guesswork. Just more money in your pocket at tax time.

Wise: Smart money for global contractors

Wise has long been a favourite for international transfers. But if you’re a contractor invoicing in New Zealand or overseas clients, it’s more than just a transfer service—it’s a full multi-currency and invoicing solution.

With mid-market rates, transparent fees, and a slick invoice generator (seriously, try it here), Wise lets you:

• Receive money in multiple currencies

• Hold balances in over 40 currencies

• Spend directly with a debit card

• Get paid like a local in NZD, AUD, GBP, USD, and more

We especially love how it helps reduce friction for creative contractors working with overseas clients. No more late payments due to “international banking delays”.

The bottom line

Wise + Prosaic isn’t a traditional “tech stack”—but it’s a killer combo for self-employed contractors who want to:

• Save time at tax time

• Stop losing money on poor FX rates

• Impress clients with slick invoicing

• Claim what they’re entitled to (without the pain)

At Accountech, we’re all about taking the stress out of accounting—and that means giving our clients smarter tools to get the job done right.

If you want help setting up your tax tech stack—or just want to know what’s claimable from your mortgage account—please get in touch

If you’re providing services through another entity, it’s important to understand the income attribution rules (“The Rules”). These rules exist to stop people from avoiding higher tax rates by diverting income to a different entity.

While structuring your work through a company can provide important legal benefits, (such as limited liability), it doesn’t mean you can save a lot of tax (as the tax rate can be lower). If attribution rules apply, the income is taxed as if you earned it personally.

When Do the Income Attribution Rules Apply?

These rules kick in when the following conditions are met:

• You personally provide time, labour, or services.

• You are associated with an entity (e.g., a company, trust, or partnership) that invoices for those services.

• The entity provides services to a third party (the customer), and you personally perform the work.

• Your net income from personal services exceeds $70,000 per year.

• At least 80% of the entity’s income comes from one customer.

• At least 80% of the entity’s income is earned by you or a relative.

Example: How the Rules Work

Let’s introduce Kaleb, who provides consulting services through his company, KMSR Limited to a third party. He’s the only shareholder and KMSR has no other customers.

Since more than 80% of KMSR’s income comes from one place and Kaleb personally provides the services, the income attribution rules will apply. This means Kaleb, and not KMSR, is taxed on the $100,000 of income.

Exemptions: When the Rules Don’t Apply

There are a few situations where these rules do not apply:

• Non-Residents - if you and the entity both overseas for the required time

• The services provided are essential support for a product supplied by the entity.

• The entity has substantial business assets—valued at more than $75,000 or making up at least 25% of its annual income from services. These assets must be used at least 80% for business purposes.

• The total attributed income is less than $5,000 for the tax year (this exception can only be used once).

What This Means for You

If you’re providing services through another entity and you’re unsure about your situation, seeking advice can help to manage your tax obligations

Disclaimer: This blog post is for informational purposes only and should not be relied upon as professional advice.

Increases to the Shareholder Current Account:

• Any cash or assets introduced by the Shareholder will typically be Funds Introduced in the Shareholder Current Account.

• While Home Office claims aren’t typically paid in cash by the Company, these can be offset as the shareholders have incurred these expenses on behalf of the Company, and the balance goes through the Shareholder Current Account

• A Shareholder Salary may be paid from the profit accumulated by the Company in the period. Is often not directly paid, and balances through the Shareholder Current Account

Decreases to the Shareholder Current Account:

• If you take money out of your company (without paying PAYE), these withdrawals are called drawings. Drawings are not a tax-deductible expense for the company. You won’t see them listed in the Profit & Loss, as they don’t impact taxable income. Instead, they’re recorded in the Shareholder Current Account.

What Happens if You Withdraw More Than You Put In?

Taking out more than you have contributed leads to an overdrawn Shareholder Current Account. When this happens, the company/shareholer have four main options:

1. Pay Fringe Benefit Tax (FBT) to Inland Revenue

2. Charge the shareholder interest at the IRD’s prescribed rate.

3. Repay the loan – The shareholder can simply return funds to the company.

4. Declare a dividend – The company can pay out retained earnings as dividends, which are also taxable to the shareholder.

Any solution must ensure the company remains solvent both before and after making the payment.

Managing a Shareholder Current Account properly is crucial to avoid unexpected tax implications. If you’re unsure how to handle drawings or an overdrawn account, seeking professional advice is always a smart move.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

However, they can still impact your tax situation, so understanding the rules is important. The IRD have requested consultation on PUB000459 which deals with this question and provides useful examples for edge cases.

Understanding Initial Repairs vs. Deductible Repairs

Initial Repairs: If repairs are needed to bring an asset up to a standard where it can be used for its intended purpose, they are treated as capital expenses. You cannot claim them as a tax deduction, but you may add the costs to the asset’s value for depreciation purposes.

Ongoing Repairs: Once the asset is in use, any necessary repairs due to wear and tear may be deductible as operating expenses.

How IRD Determines Initial Repairs

The IRD applies a few key principles when deciding whether a repair is Initial or Ongoing in nature:

• The repair must not be part of acquiring or improving the asset.

• If the asset was in poor condition at purchase and needed repairs to function properly, those costs are capital.

• Repairs made due to the prior owner’s lack of maintenance are considered part of the acquisition cost.

For example, if you buy a second-hand truck for your delivery business and need to replace tyres, fix rust damage, and repair the brakes before using it, these costs are not deductible. However, future maintenance of the truck, such as changing the oil or replacing worn-out tyres after regular use, would likely be deductible.

Depreciation: The Silver Lining

Although initial repairs aren’t deductible for tax, they aren’t a complete loss. If the asset is depreciable, you can add the repair costs to the asset’s total value and claim depreciation deductions over time. (Note: Buildings from 1 April 2024 have depreciaiton of 0%)

What This Means for Your Business

If you’re purchasing assets that immediately require repairs, it’s essential to plan ahead.

At Accountech, we specialise in making tax rules easy to understand for business owners. If you’re unsure about the classification of your expenses, we’re here to help you navigate the complexities of tax law in a way that makes sense.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Key Compliance Insights for FY 24/25

Inland Revenue’s latest approach to compliance can be summarised in three principles:

1. Make it Easy to Get Right: Tools like online property tax decision aids help businesses navigate their obligations.

2. Make it Hard to Get Wrong: Increased use of data, such as cryptocurrency trade information, targets areas prone to misreporting.

3. Make it Costly for Avoidance: Enforcement actions and penalties are on the rise for deliberate non-compliance.

Here are the key areas of focus for Inland Revenue:

• Property and Hidden Economies: More audits are targeting property developers and small businesses that underreport income.

• Trusts and Personal Income: Those diverting income through trusts or failing to declare distributions are under scrutiny.

• High-Risk Debt and Offshore Income: From unpaid taxes to undeclared overseas earnings, Inland Revenue is stepping up collections and compliance campaigns.

• Cryptocurrency: Voluntary disclosures are encouraged, but non-compliance could trigger audits and penalties.

What This Means for Your Business

For startups and creatives, these changes underscore the importance of keeping your financial records accurate and up to date. Leveraging tools like myIR and working closely with a knowledgeable accountant can ensure compliance while freeing you to focus on your craft.

At Accountech, we specialise in simplifying compliance for creative businesses. Whether it’s navigating the bright-line test for property, managing GST returns, or understanding your obligations around new technologies like cryptocurrency, we’re here to help.

Ready to Ensure Your Compliance?

Get in touch with us to make compliance straightforward, so you can avoid penalties and focus on growing your business. We’re here to provide expert guidance tailored to your needs.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Key Factors to Consider

1. Vehicle Use:

   • Ensure the vehicle is used primarily for business purposes.

2. Type of Vehicle:

   • Commercial Vehicles: Utes, vans, or trucks typically provide better tax benefits compared to passenger cars because they are designed for business purposes.

   • Electric and Hybrid Vehicles: These may qualify for additional incentives and deductions.

3. Depreciation Rates:

   • Vehicles with higher depreciation rates can offer larger tax deductions. For example, passenger vehicles generally have depreciation rates of 30% (diminishing value) or 21% (straight line).

4. Fringe Benefit Tax (FBT) Considerations:

   • Vehicles not available for private use, or with restricted private use, can help reduce FBT liabilities. Utes and other commercial vehicles often have lower FBT implications if private use is restricted.

5. Running Costs:

   • Maintenance, fuel, insurance, and other running costs are deductible when the vehicle is used for business purposes. Efficient vehicles with lower running costs can offer financial advantages.

6. Purchase Options:

   • Leasing a vehicle can sometimes offer tax benefits as lease payments are often fully deductible. However, purchasing allows for depreciation claims which can also be significant.

7. GST Considerations:

   • GST registered businesses can claim GST on the purchase price of the vehicle if it is used for business purposes.

Practical Steps

1. Evaluate Business Needs: Determine the primary business use and choose a vehicle type accordingly.

2. Identify Options and Consult: Get tailored advice based on your specific business situation to ensure you're maximising tax benefits.

3. Keep Detailed Records: Maintain logs for business vs. personal use to substantiate deductions and minimise FBT.

Scenario: Leasing vs. Buying & Financing a Vehicle

Let’s consider a scenario comparing the tax implications of leasing versus buying a mid-sized van for a sole trader in New Zealand, used entirely for business purposes.

Vehicle Type: Mid-sized van
Purchase Price: $40,000 (excluding GST)
Interest Rate: 8%
Lease Cost: $800 per month (excluding GST)
Depreciation Rate: 30% diminishing value
GST Registered: Yes
Business Use: 100%

Buying & Financing the Vehicle:

Year 1:

• Purchase: $40,000 + $6,000 GST = $46,000

• GST Claim: $6,000

• Depreciation Deduction: $12,000

• Interest Deduction: ~$2,962

• Repayments: ~$9,733

Total Depreciation & Interest Deductions over 5 Years: $42,000
Total Repayments over 5 Years: ~$48,667

Leasing the Vehicle:

Year 1:

• Lease Payments: $9,600

• GST Claim on Lease Payments: $1,440

• Deductible Lease Payments: $9,600

Total Lease Deductions over 5 Years: $48,000

Comparison:

• Buying:

  • Total GST Claim: $6,000

  • Total Deductions: $42,000

  • Residual Value: Asset value available for sale after five years

• Leasing:

  • Total GST Claim: $7,200

  • Total Lease Deductions: $48,000

  • Residual Value: $0

Lease v Buy - Conclusion:

• Buying: Beneficial if you prefer owning an asset and can manage the upfront costs, with potential resale value after five years.

• Leasing: Offers slightly higher total deductions over five years

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Options for Logbooks in New Zealand

When it comes to maintaining a logbook for your vehicle, you have three main options:

1. Drivers Note App: A convenient digital solution that allows you to log your journeys on the go.

2. A Book Book: The traditional method where you manually record your mileage in a physical logbook.

3. Spreadsheet: A versatile option where you can keep track of your mileage using a digital spreadsheet.

The IRD Mileage Claim Process

To claim mileage for your vehicle, the Inland Revenue Department (IRD) requires you to keep a logbook. Here's a step-by-step guide to help you:

1. Keep a Logbook for 90 Days: During this period, you must record the following:

   • The start date and the vehicle's odometer reading on that day.

   • The date, distance, and reason for each business journey.

   • The end date of the 90-day period and the vehicle's odometer reading on that day.

   • Any other required information.

2. Calculate the Proportion of Business Use: At the end of the 90 days, add up the distance travelled for business purposes and calculate the proportion this represents of the total distance travelled by the vehicle.

3. Allocate Vehicle Costs: Apply this proportion to all your vehicle costs, including petrol, Warrant of Fitness, maintenance and repairs, insurance, and parking.

Once you have this calculation, it can be used for up to three years, provided that the proportion of business use doesn't change by more than 20%. After three years, you'll need to keep a logbook for another 90 days to update your calculations.

Simplifying Your Accounting Needs

At Accountech, our goal is to help you navigate complex accounting requirements with ease. Whether you choose to use a digital app, a paper logbook, or a spreadsheet, keeping accurate records of your vehicle mileage is essential for ensuring your business claims are compliant with IRD guidelines.

Small Businesses at Risk of Collapse

Small businesses are facing a growing risk of collapse. This issue is particularly severe in industries such as food services (restaurants, bars, cafes, and pubs), construction, and transport businesses. For some small businesses, the risk of failure increased by 20% in the year ending 31 March 2024.

Many small businesses are struggling to stay afloat, while larger enterprises continue to thrive. For us, it's crucial to understand where you stand and what challenges you are experiencing. Sometimes making an informed decision to close down is not a failure but a commercial strategy.

Proactive Measures: How We Can Help

Here are some ways we can support to your business:

• Business Planning: Assist with strategic business planning by reviewing current operations, identifying potential risks, and developing mitigation plans.

• Pricing Strategies: Help re-evaluate pricing strategies to remain competitive and profitable.

• Budgeting: Create detailed budgets to manage finances effectively and prepare for downturns.

• Insolvency and Restructuring Advisors: discuss available options. Early intervention can lead to better outcomes, whether it involves closing the business to prevent further financial losses or restructuring to start afresh.

End of Financial Year Financial Review

An end-of-financial-year review can serve as a substitute for a tax planning review. This process can help to gain clarity on your business and personal goals, reassess your financial health, identify areas for improvement, and develop strategies to weather the storm or plan an exit.

In our view, an Accountant is the best person to have on hand— an advisor to provide invaluable support and advice to help you achieve the best outcome.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

What Are Bank Rules? Bank rules are predefined conditions that automatically categorise transactions in Xero. They can save you time by reducing the need for manual entry and help prevent errors when reconciling your accounts. With bank rules, you can reconcile transactions with just one click, giving you more time to focus on what’s important in your business.

How Do Bank Rules Work? When you set up bank rules, you can specify criteria such as keywords, amounts, or transaction types. For example, you could create a rule that categorises any transaction containing the word "rent" as a rent expense. Once a transaction meets the criteria you've set, the rule will automatically categorise it accordingly.

Benefits of Using Bank Rules

• Time-Saving: Bank rules can significantly reduce the time spent on data entry and reconciliation.

• Error Reduction: By automating the categorisation process, bank rules help minimise errors in your accounting records.

• Efficiency: With transactions already categorised, you can quickly generate reports and gain insights into your financials.

Watch this video to learn more about how bank rules can transform your accounting workflow

Get Started Today If you're ready to simplify your accounting workflow and save time, consider implementing bank rules in your accounting software. Not sure where to start? Our team at Accountech is here to help. Contact us today to learn more about how bank rules can benefit your business.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Understanding the Tax Lingo:

• Terminal Tax: This is the final tax payment for the income you earned in the previous financial year (ending March 31st). The due date is typically April 7th.

• Provisional Tax: These are estimated tax payments based on your expected income for the current financial year. Payment #3 usually falls on May 7th.

The Challenge of Close Payment Dates

For many small business owners, the close proximity of these two payments can be challenging, especially if their income has increased significantly in the previous tax year. This situation can lead to two large tax bills, with payments falling within a month of each other.

Tips for Smoother Sailing:

• Make Tax part of the Routine: Know your figures as you go. This will not only make tax preparation easier but also give you valuable insights into your business's financial health.

• Ask Away: Lean on your Advisors to strengthen your financial knowledge. They’ll be able to tell you what percentage of income you should be putting to things like Income Tax and GST (tip: it’s usually 25% and 10%)

• Estimate Wisely: When making Provisional Tax payments, don't underestimate your income. While overpaying may result in a later refund, underpaying can lead to penalties and interest charges. Consulting with a qualified accountant can help you make informed estimates.

• Save for Tax Season: Setting aside a portion of your income specifically for tax payments can ease the financial burden come April and May.

• Register and File for AIM: We’ve written about the Accounting Income Method of filing and paying provisional tax before. Filing and paying provisional tax based off actual information that aligns with your GST filing makes everything a lot simpler for provisional tax, and reduces any bad surprises at this time of year.

Here at Accountech, we understand the unique challenges faced by small businesses. That's why we're here to shed some light on why these tax payments seem to sneak up on you, and what you can do to avoid a financial headache.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

What is the SBCS? The SBCS is designed to provide financial support to businesses experiencing revenue losses due to COVID-19. It offers low and interest-free loans for up to 5 years, with no repayments required for the first 2 years. This scheme aims to ease the financial burden on businesses and help them weather the economic challenges brought on by the pandemic.

Managing Your Loan: Businesses are required to notify Inland Revenue of any changes in circumstances, such as business closure, insolvency, or changes in business nature. Providing false information or failing to meet repayment obligations can have serious consequences, including immediate repayment of the loan with interest.

Loan Default: We’re starting to see Inland Revenue send out Default Letters to clients who have gotten behind on repayments of the SBC loans. Therefore it’s important to keep up with monthly repayment amounts as specified by Inland Revenue, otherwise they will ask for the loan to be repaid in full. Once a default has been registered you are able to apply for an arrangement, however these are granted at significantly higher interest rates.

Payment Methods: Repayments towards the SBCS loan can be made using various methods, including direct debit. It's essential to use the correct tax type (SBC) when making payments.

The Small Business Cashflow Scheme offers vital support to businesses facing financial hardship due to COVID-19. Understanding the terms and conditions of the scheme, including repayment obligations and interest rates, is crucial for businesses to make informed decisions and effectively manage their finances during these challenging times. Business owners must be careful to repay monthly amounts in line with Inland Revenue expectations, or should expect a Default Letter and need to repay the loan in full.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

Remember Withholding Tax is not a final tax, therefore the rates you are deducted do not impact the final amounts of taxes you pay to the IRD for the year. At Accountech, we think these taxes are useful in helping to manage end of year tax payments for Contractors and Freelancers.

What is the IR330C Form? The IR330C form is used by contractors, freelancers, and self-employed individuals to inform their employers about the rate at which they want Income Tax to be withheld from their payments. This form is crucial for individuals working for 'labour hire' organizations, such as recruitment agencies, large construction companies, or film studios.

Why is the IR330C Form Important? Labour hire organizations are required to collect an IR330C form from you before they can pay you. This form helps your employer know how much Income Tax to deduct from your payments. Failure to submit this form can result in your employer deducting up to 45% of your earnings as Income Tax.

Can you get and Exemption from withholding tax? Yes you can! If you’re in business, have a good record of paying tax and filing tax returns on time, and get schedular payments from any payer other than a labour hire business then you can apply for a 0% special tax rate. You’ll still need to complete a IR330C though. Contact us to start this process.

Useful Links:

• Current IRD Form Link

• IRD Info about Schedular Payments

How to Fill in the IR330C Form:

1. Section 1: Your Details

   • Name: Enter your full legal name

   • IRD Number: Enter your IRD number

2. Section 2: Your Tax Rate

   • Tax Rate: Enter the percentage of Income Tax you want your employer to deduct.

   • Schedular Payment Activity Number: Refer to the table on the form to find your Activity Number based on the type of work you do.

3. Section 3: Declaration

   • Enter your Name and Signature (esignatures are fine) and Date

At Accountech, we understand the complexities of tax obligations for contractors and freelancers. Our team of accountants and tax experts is here to save you time, money, and hassle when filing and paying taxes. Contact us today to learn more about how we can help you manage tax more efficiently.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.

To prevent this from happening and to ensure that you receive all important tax-related emails from us, we recommend taking the following steps:

1. Add our Xero Tax email address, noreply@post.xero.com, to your contacts list. This will help your email service recognise the emails as safe and prevent them from being flagged as spam.

2. Create a filter in your email settings to ensure that emails from @xero.com (The Xero email domain) are never sent to spam and are always marked as important. This will further enhance the chances of our emails reaching your inbox promptly.

Here's a step-by-step guide for Gmail users on how to create this filter:

• Open Gmail

• In the search box at the top, select the Down arrow.

• In the From field, enter the sender email address (@xero.com)

• At the bottom of the search window, click Create filter

• Select "Never send it to Spam”

• Select “Always Mark as Important”

• Click Create filter

By following these simple steps, you can ensure that you never miss any important tax-related communications from us. If you have any questions or need further assistance, please don't hesitate to contact our team.

Firstly the Costs

Using a credit cards is not free, a convenience fee of 1.42% per transaction is applied by the bank. Also bad management of credit card debt will incur higher interest rates than Use of Money rates applied by Inland Revenue.
Paying on time with a credit card can help you avoid late payment penalties and interest, saving money in the long run. Also some banks offer cash or other travel benefits for using credit cards

If funds exist - pay via bank account

Use the “pay tax” function in Internet Banking or use the details below:

• IRD Bank Account: 03-0049-0001100-27

• Particulars: IRD Number

• Payee Code: Tax Type (INC, GST etc) and Period End in format DDMMYYY

• Reference: Leave Blank

Should you just apply for an Arrangement?

For debt you cannot pay in full by the due date or overdue debt, Inland Revenue allows you to apply for a formal debt repayment plan. The benefits of this might be a lower interest rate, but increase in time and cost setting up and negotiating the arrangement may offset any benefits.

Current Process for using Credit Card payments

1. Consider Costs and Benefits: While using a credit card for payments offers convenience and potential savings, it's essential to weigh any associated fees or higher interest rates against the benefits of avoiding late fees and interest charges.

2. Check Eligibility: First things first, ensure that your credit card is accepted for Inland Revenue payments. Currently only Mastercard and Visa are accepted.

3. Gather Details: Collect all the necessary information about your Inland Revenue debt, such as the amount owed, the tax type and period ending. Having these details ready will make the payment process much smoother.

4. Access the Payment Tool: Head to the Inland Revenue website's payment section (currently here) and select the credit or debit card option. Once there, scroll down and click on "Pay with your credit or debit card – then click on other ways to do this" to generate a new payment request.

5. Enter Payment Details: Fill in the payment request form accurately, including the amount, client's details, and credit card information.

6. Complete the Transaction: Review the details and proceed with the transaction.

7. Monitor Payment: After completing the transaction, keep a close eye on it to ensure it's properly applied to your client's Inland Revenue debt. You can check the payment status on the MyIR website or contact Inland Revenue by phone.

By using the payment tool provided by Inland Revenue and following these steps, you can manage tax payments efficiently, potentially saving money and avoiding unnecessary penalties. Our goal as is to help you leverage digital tools to optimise your financial processes and keep your business on track.