5 common GST errors and how to avoid them
No-one enjoys having to go back to research and correct mistakes (although they are a fact of life). It is easy to make errors when reporting GST even with the best intentions of getting it right.
Our aim is to minimise the incidence of these situations by helping you get it right the first time (and give you more time for more enjoyable activities).
Below are some of the most common errors associated with GST returns and our suggestions on how to avoid them.
1. Preparation errors which include entering figures into the wrong boxes, incorrect addition, omission of information, and late filing.
Ensure you check your work papers and finalised return thoroughly prior to filing. If you are unsure of anything we are able to help you prepare your GST returns so you can rest easy. You can pass your GST return to us (or have it sent directly by IRD) and know that we will complete and file it on time.
2. Not accounting for GST on the private use of assets owned by the business.
Remember not to claim GST on private expenses. This can feel like negotiating a minefield so if you need some help deciding which assets you need to adjust for or you need some assistance with the calculation - just ask! Your accountant understands the rules around private and mixed use of business assets and can help by making the appropriate adjustments in the right periods.
3. Not registering for GST soon enough or not de-registering when the business ceases.
It's a good idea to make sure you read through the GST guide to check what your rights and responsibilities are with respect to starting a business. If you have any questions about what you need to do or when you need to do it feel free to contact us.
We can help you identify if your business income will meet the threshold of $60,000.00 and therefore require registration. We will also be able to advise you on the most appropriate basis for your business to register.
Should your business cease for any reason we are here to help you tie up the loose ends, this includes the correct treatment of any assets that may remain in the business on cessation and arranging deregistration of GST.
4. Not including all taxable supplies in your return.
All your sales that are not exempt or zero-rated must be included. If unsure check with your tax advisor. They know which transactions attract GST and which don't so they can make sure on your behalf that all the correct transactions are included in your return.
5. Including sales and/or expenses for a period not covered by the return.
Check that all expenses and sales are for the current tax period. A common mistake is to confuse which is payments and invoice basis. Your accountant knows which transactions need to be included in each return.
As part of the process of handling your GST we recommend reconciling your GST at the end of each period to confirm that all the correct information has been included. If there are adjustments to be made for any reason we suggest you check with your accountant.
GST doesn't need to cause you stress and sleepless nights - if you're fed up with completing your returns at the last minute or not sure whether you are completing them correctly give us a call, we're more than happy to help.
Brenda McInnes heads TvA's Business Support team. The team covers daily administration for business owners, such as GST, Payroll, and ACC. If you have any questions related to your GST send an email to email@example.com or contact Brenda on 03 578 3386.