Tag: IRD
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Don’t Mix Business and Personal: Here’s Why It’s Risky for Small Businesses
For many small business owners, the line between business and personal can feel blurred, especially in the early days when funds are tight and systems are still taking shape. However, failing to maintain a clear boundary between business and personal finances is more than just messy; it’s a fundamental risk to your financial clarity, tax…
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What You Can and Can’t Claim Back from Supermarket Shopping
As a contractor or sole trader, it’s easy to assume that anything you buy while “on the job” is fair game for a GST claim, especially those regular supermarket runs for fuel, food, or supplies. But the truth is, Inland Revenue draws a firm line between personal and business expenses, and not knowing where that…
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Understanding Tax Credits vs. Tax Deductions in New Zealand
When managing your tax obligations in New Zealand, two powerful tools can help reduce the amount you owe: tax deductions and tax credits. Although they both result in tax savings, they work in fundamentally different ways. Understanding these differences is essential whether you’re an employee, a self-employed contractor, or a business owner. Below, we break…
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Avoid These Accounting Red Flags: Protect Your Business from Costly Mistakes
Every business owner aims for financial stability, but accounting red flags can signal hidden issues that threaten profitability and compliance. Poor financial management can lead to cash flow struggles, tax penalties, and even legal risks. Recognising these warning signs early can help protect your business from costly mistakes. Below are key accounting red flags to…
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10 Common GST Claim Mistakes Businesses Make in New Zealand
Claiming GST on business expenses can help reduce costs, but it’s important to know what you can and can’t claim. Many businesses unknowingly claim GST on ineligible expenses, which can lead to costly mistakes. Here are some common errors to avoid when filing your GST returns. 1. Purchases from Non-GST-Registered Suppliers If you buy goods…
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GST Mistakes That Could Cost Your Business
Goods and Services Tax (GST) compliance is a crucial aspect of running a business in New Zealand. While it may seem straightforward, mistakes in GST registration, record-keeping, tax filing, and calculations can lead to serious financial consequences, including penalties, interest charges, and even audits by Inland Revenue (IRD). Understanding and avoiding common GST mistakes can…
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Transfer Pricing: Key Considerations for Businesses Ahead of Year-End
As the March and June financial year-end approaches, businesses engaged in cross-border transactions with associated parties must review their transfer pricing positions. Ensuring transactions are conducted at arm’s length—meaning they reflect the pricing that would occur between independent third parties—is critical for compliance with Inland Revenue (IR) and OECD guidelines. Proper transfer pricing planning helps…
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Time-Sensitive GST Transitional Rule: How to Avoid Unexpected Tax Obligations
If you have claimed GST on an asset with mixed business and personal use, you could face an unexpected GST liability when selling it. However, a one-time transitional rule under section 91 of the GST Act provides a unique opportunity to opt the asset out of the GST system. This rule is only available until…
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Tax Implications of Sole Trader vs. Company Structure
The structure of your business – whether a sole trader or a company – has significant implications for taxes and financial responsibilities. Here’s a breakdown to help you navigate the differences and make informed decisions. Sole Trader A sole trader is the simplest business structure where you and your business are the same legal entity.…
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Provisional Tax: What You Need to Know
What provisional tax is, how it’s calculated, and how to avoid penalties.