2024 New Zealand Small Businesses

A Beginner’s Guide to Navigating End of Financial Year for Small Businesses

If you’re facing your first end of financial year (EOFY) as a small business owner, the process can feel overwhelming.

But fear not! This guide will provide you with a clear overview of what’s required during EOFY for small business owners like yourself. Let’s dive in and set you up for success in the new financial year ahead.

1.Getting Tidy and Organised

It’s time to get your business sorted and tīpakohia. Here are some tasks to help:

• Ensure All Invoices Are Sorted: Get those invoices in order and send out any outstanding ones. He tino hua!
• Record Payments Correctly: Make sure your records reflect your business transactions accurately. It’s all about mahi tahi.
• Complete Stocktake: If needed, conduct a thorough stocktake and adjust your records accordingly. Let’s keep those shelves stocked!
• File Your Receipts: Keep track of your receipts and bank statements.

2. Learn Tax Terms

Understanding key tax terms is essential for navigating EOFY with confidence. Here are some terms you should know:

• Goods and Services Tax (GST): Companies selling products or services subject to GST must register with the IRD and file GST returns.
• Pay-as-you-Earn Deductions (PAYE): Employers are required to deduct PAYE tax from their employees’ pay and remit it to the IRD.
• Fringe Benefits Tax (FBT): Employers offering fringe benefits to employees must pay FBT on the taxable value of those benefits.

3. Key Tax Dates

Now that your paperwork is sorted, what’s on the horizon? Here are some important tax dates to mark:

• GST Return Due Dates: GST returns are due by the 28th of the month following the end of your taxable period.
• Income Tax Payment Dates:
•  Individual tax returns are due 7th July via myIR. Don’t panic if you have a Registered Tax Agent they can be filed anytime from 1 April to 31 March 
• Provisional Tax Payment Dates: Provisional tax payments depend on the option you use, such as Ratio, Standard, Estimation, or AIM.

4. Get Clear on Claims

As a small business owner, you are eligible for various tax deductions to reduce your taxable income. Here are some common deductions you can claim:

• Depreciating Assets: Claim deductions for assets like computers, office furniture, and vehicles.
• Business Expenses: Deduct expenses such as rent, utilities, and insurance premiums related to running your business.
• Professional Fees: Claim deductions for tax agent fees and other professional services used for your business.

Navigating EOFY may seem like a daunting task, but with the right māramatanga and preparation, you can sail through it like a pro. Start now to stay a step ahead, review your finances, and make the most of your deductions to set your business up for success in the new financial year.

If you need a helping hand with EOFY preparations or have any questions about your tax obligations, we’re here to help. Reach out to us here.  

Want more financial advice for your small business? Here’s another helpful blog on business bookkeeping –  https://www.teambookkeeping.co.nz/depreciation/