It seems like just yesterday we were all in the grips of dealing with tax in the heart of a global pandemic. But tax season is here again in New Zealand and preparation is key.

It’s been a challenging financial year, with many Kiwi SMEs navigating supply chain pressures, rising costs, and changes in customer behaviour. Some offices have embraced hybrid working, while others remain fully customer-facing.

But what does this all mean for 31 March year-end? To put it simply, there are some things you should already be doing to get things in order, so you’re fully prepared when tax time rolls around.

1. Understand where you’re at

As EOFY creeps up, it’s always a good idea to take stock of what’s going on for you financially. Review your financial position with your bookkeeper or accountant – it could be that it’d be beneficial to invest now to recoup a benefit this financial year. Hopefully, as the year has gone along, you’ve been keeping a record of everything so the information is readily available.

2. What you can and can’t claim

There are plenty of expenses you can claim in New Zealand, but check carefully wiht your accountant. In general, expenses must relate directly to earning your business income.

Examples include:

  • Website set-up or maintenance
  • Motor vehicle expenses (if used for business purposes)
  • Home office expenses, (internet, mobile, utilities)
  • Software or hardware expenses
  • Business loan interest

Important: You must have records and receipts to prove the purchases.

3. Check your records

Some tasks need to be up-to-date before filing your return with Inland Revenue (IRD). Having this ready means less stress at tax time.

Key tasks may include:

  • Preparing a profit and loss statement
  • Completing a stocktake
  • Recording all debtors and creditors
  • Filing GST returns (if registered)
  • Making sure PAYE and KiwiSaver contributions are up to date

Tip: Make a digital record of any paper records you have, and back everything up.

4. Engage a good tax accountant

Working with an accountant year-round can save you time, money, and stress. They’ll already be across your financials when it’s time to file your return. In New Zealand, make sure your accountant is a member of a recognised professional body.

5. Reduce your taxable income

As the financial year closes, some businesses look to invest in assets that can reduce taxable profits. New Zealand offers asset depreciation deductions through IRD rules, which means purchases like vehicles, computers, or security systems can often be claimed over time. Your accountant can advise what’s appropriate for your business.

If you’ve been thinking about investing in an asset, now might be the time. And if you need additional capital to make the purchase, Bizcap can help with fast, flexible funding! With approvals in as little as 3 hours and same-day funding (24 hours) for Kiwi SMEs.

File away

The type of tax return you file depends on the structure of your business, which is also why having an accountant can help. If you keep a handle on all of your records throughout the year, it makes tax time a lot easier to deal with. And with EOFY right around the corner, it’s time to get everything in order.

If you’re thinking of investing in your business and need some capital, talk to a Bizcap lending specialist today. Remember, business finance is tax deductible too!