Does GST and Tax confuse you?

Posted by Todd Gibbs

Welcome back to the Ezebiz Accountants blog where we will be answering a few of our frequently asked questions over the next few weeks.

Last week we talked about the difference between companies and sole traders and registering for GST. This week we will be looking at claiming expenses, tax rates and setting aside money for tax and ACC.

How do I claim expenses if I don’t register for GST?

If you are registered for GST, you claim the GST portion in your GST returns. If you aren’t GST registered, you can claim the whole amount (including GST) as an expense in your end of year accounts when your tax return is prepared. Remember to keep your business related receipts or use secure online (cloud) software to keep them for you.

How much do I need to put aside for tax?

If you put aside 20% of your sales (if you are not GST registered), that should be enough to cover your tax and ACC. For example – In most cases, if your sales are at $50,000, by the time you claim your running expenses, your tax rate should be below 20% meaning you have covered yourself with the money you have put aside.

If you are GST registered, you will need to put aside more to cover your GST payments too.

What if my business is part-time? What should my tax rate be on my wages if I have another job with PAYE deducted?

Depending on your income, we would suggest you make your tax rate at the job with wages as secondary tax if it is not your main source of income. Your employer will provide you with a form to guide you to the correct tax code. Remember – if you earn over $70,000 per year, your tax rate will be 33%.

Next week, we will look at what you can actually claim on from vehicles to home expenses if operating from home plus business assets.

Once again, keep in mind that we are only a quick email or phone call away so you can book your FREE consultation with us – 07 308 5576

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Does Accountancy leave you baffled?

Posted by Todd Gibbs

Over the next few weeks, Ezebiz Accountants will be posting some of the frequently asked questions we get from clients. Hopefully this will give you a clearer picture on how to deal with your GST, tax, and general accountancy issues.

Do I need to set up a company? Why?
Limited Liability
It depends on what your intentions are in the long term. If your long term goal is to build your business up and grow it so you can sell to someone else and make a capital gain, then yes, you should set up a company.
If your goal is to create income and build an on-going income for your family unit and it is your only source of income, then a partnership or operating as a sole trader is probably a better option.
With companies, the compliance costs with regards to the Companies Office returns and tax returns will be higher and you need to remember that any money received belongs to "the company".  There could be tax implications of any money you withdraw and you need to be aware of that.

Do I need to register for GST?

Legally you are not required to register for GST until you reach $60,000 in sales.  We wouldn't recommend that you register for GST until your income looks like it is going to exceed $60,000 in a financial year (A standard financial year is 1st April to 31st March).  However, if your main customers are GST registered it may be better to do so, as you add GST to your sales, so it depends if your sales are GST inclusive or not.

Next week we will look at tax rates, claiming GST, ACC and PAYE.

Also, keep in mind that we are only a quick email or phone call away so you can book your FREE consultation with us.

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Getting Into a Good Routine

Posted by Angela Knight

Imagine not having to hold paper files. Imagine sharing an accounting system on-line with your accountant, so at the flick of a switch you can have a cash flow report ready for your bank manager!


There are lots of easy ways to take advantage of technology and save time and paperwork. For instance have you considered Xero? It’s accounting in the cloud and it’s as secure as your regular online banking.

But getting back to basics, it’s a good idea to get into a regular routine of monitoring bills and invoices to avoid problems. I recommend you make time – at least once a week – to make payments and manage invoices, as this regular activity stops things building up. Many of your suppliers probably email you an invoice, instead of printing it? If you make use of accounting software like Xero you can easily store your digital invoice in its handy on-line filing cabinet and easily attach it to the transaction (no more annoying questions from the accountant … right?). Or you can scan the invoice you received in the mail and input to your on-line filing cabinet and dare I say it… screw up the hard copy and file it in the bin!!

And entering your accounts payable in Xero helps you manage your cashflow as you can schedule your payments and batch process them to the bank too. Easy!

Just imagine how much time you could save to hang out with your kids, enjoy your hobby or just relax? We’re Xero Gold experts here at Ezebiz and we can quickly and easily get you started with free training and access to Xero’s free online software. Just give us a call, we’re here to help.

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