We recommend that you discuss this service with your Beany accountant before purchasing

Helping you set business goals & developing and implementing strategies to achieve them

Preparing budgets and input into Xero so you can track how you're going

6 meetings annually to help reach your goals

Financial benchmarking with your competitors

Success pack

We will provide you with guidance and support on what you'll need to do to establish and commence running your new business

We can provide advice on the best business structure for your needs and take care of establishment and registrations

Set up your Xero file so it's optimised for you and give you initial training so you start off in the right way

Preparation of a budget tailored to your business and input into Xero so you can track how you're going

Starter pack

We set you up with the right Xero subscription and manage your payments.

Xero monthly subscription

We set up your Xero file so it is optimised for you and your business.

Xero setup

We prepare your GST returns ready for you to review and pay. We also remind you of when and how much to pay, and even send an alert if you forget! Requires Xero.

Prepare GST

If you would rather be doing something else, let us do your bookkeeping for you. We love coding and checking and you can relax knowing it's all done right, and on time. Requires Xero.

Bank reconciliation

An hour of training on how to use Xero to it's full potential.

Xero training

We'll set up your Xero file from scratch, then give you the training you need to use it to its full potential.

Xero setup & training

Brush up on best practices for heading into the New Zealand tax year. This guide highlights strategies for improving business operations and understanding possible tax savings.

BUSINESS ADVICE  •  30 APRIL 2024  •  8 MIN READ

Best practices for heading into the New Zealand tax year

Transitioning into the new New Zealand tax year is a prime opportunity for business owners to adopt strategies that not only improve operations but also enhance financial health and potentially lead to tax savings. 

Here we unpack six strategies designed to position your business for success in the upcoming financial period.

Having a good grasp of your tax responsibilities means knowing when you have to file a tax return, when you need to pay your tax liability, and the period which this tax return covers. 

In New Zealand, all business entities, including sole traders, companies, partnerships, and trusts, share the same financial year, which runs from April 1st to March 31st of the following year. The deadline for filing tax returns is March 31st the year following, with the final tax payment due on April 7th, provided you are registered with a tax agent and have an extension of time (EOT) in place. Failure to file by the due date may result in the loss of the EOT, shifting the next tax return deadline to July 7th, and advancing the tax payment due date to February 7th. 

Read more: 2024 tax year dates in New Zealand

If your end-of-year tax bill is over $5,000, then you will also have to pay provisional tax - tax in advance for the following financial year. This can be especially difficult for new businesses as you can end up paying your current year tax and provisional tax in the same year - two years worth of tax in 12 months. Make sure you start preparing and putting money aside for this from the date you start trading.

If you have a standard March balance date, the provisional tax is due in August, January and May. The exception to this is if you file GST returns six monthly - in this case you make two provisional tax payments in October and May.

Read more: Residual vs Provisional vs Terminal taxes – confused?

Directors of companies should be aware of the dates above for their income tax return, and also know the tax obligations for their company. 

Individuals, trusts, and companies in New Zealand can apply for a different balance date than the standard end of the financial year, but must provide a valid reason for the Inland Revenue Department (IRD) to approve this change. If granted, their provisional tax dates will also shift accordingly, allowing them to select any month of the year as their new financial year-end.

For both sole traders, companies, and trusts, registering for GST or having employees introduces additional tax obligations.
Admittedly, keeping these dates and tax obligations clear can be a challenge, underscoring the importance of either staying ahead yourself, or engaging a dependable accountant to track these deadlines for you.

2. Keeping personal and business expenditure separate

In order to accurately calculate your tax liability you must maintain precise financial records. 

A common challenge for many business operators is differentiating between business and personal expenses. This distinction is paramount, irrespective of whether you're a sole trader or managing a company. Ensuring a clear separation between business and personal transactions is fundamental.

Utilising your business card for personal expenses complicates your tax return preparation, necessitating the removal of such transactions to accurately determine your profit.

Similarly, if personal accounts are used for business purchases, it becomes necessary to sift through bank statements to identify these expenses for inclusion in your tax return. Blending business with personal expenses not only adds to the workload during tax season but also heightens the risk of mistakes, potentially leading to overpayment on taxes.

While not mandatory, it is highly recommended for those operating under a limited liability company structure to maintain a dedicated bank account, given the company's status as a separate legal entity from its owner(s). Not keeping the company's finances distinct from personal funds can lead to complications with the IRD.

While sole traders aren't legally obliged to use a separate bank account for their business, taking this step is highly advisable. The clarity it brings to your financial management can significantly ease the process of handling taxes.

Read more: Do I need a business bank account?

3. Accurate and timely record keeping during the New Zealand tax year 

Robust bookkeeping isn't just a pillar of effective business management; it's a lens through which the financial health of your business can be assessed, guiding both operational decisions and tax liability predictions. Integrating digital platforms like Xero into your bookkeeping practices can elevate this necessary task from a mundane obligation to an efficient, routine process.

With a current Xero file, you gain instant access to a snapshot of your business's performance, enabling the identification of trends, such as which products or services are excelling or underperforming, and providing an early estimate of potential tax dues on accrued profits. While surprises may have their charm, an unforeseen sizeable tax bill certainly does not fall into that category.

If you’d rather do anything besides bookkeeping, or you repeatedly leave this task until year's end, engaging a professional bookkeeper could be a strategic move. 

A bookkeeper can diligently maintain your financial records, affording you the freedom to dedicate your time to the aspects of your business that you excel in, enjoy the most, and that contribute to your revenue stream.
Read more: Bookkeeping basics: how to make bookkeeping as stress-free as possible

4. Understanding what expenses are tax deductible

Nearly every business owner, whether operating as a sole trader or within a corporate structure, recognises that taxes are levied on business profits. It's essential, then, to grasp how 'profit' is determined, with many entrepreneurs pondering over which expenses are considered allowable deductions for tax purposes.

The key principle to remember is that expenses incurred 'wholly and exclusively' for business operations are generally deductible when calculating taxable profit.

Consider, for instance, if you're producing bottled fruit juices and purchase glass bottles for packaging. This expense, incurred solely for your business needs, is an allowable deduction.

This seems obvious, but complications arise when you purchase something that might be used for both your business and for personal use. For example, you might buy a car that you intend to use for your business, visiting customers and suppliers for example, but you might also intend to use it for picking up the kids from school, or your trip to Fiordland. 

Now, depending on whether you trade as a sole trader or through a limited company, the treatment of the personal use element will be slightly different, and your accountant will be able to do the sums to work out what deduction can be claimed. In both cases, however, the tax relief will be limited if there is an element of personal use. 

Thus, it's wise to carefully consider the dual-use nature of significant purchases throughout the fiscal year, as expecting full tax deductions for such expenditures is unrealistic.

Familiarising yourself with the nuances of tax-deductible expenses can significantly enhance your decision-making process over the New Zealand tax year. Understanding these regulations can be complex, which is why at Beany, we provide our clients with unlimited support and advice for everyday inquiries. 

This ensures our clients can confidently discern between deductible and non-deductible expenses, offering peace of mind that expert guidance is always within reach.

Read more: Life hack: save time with this checklist for business expenses (FREE DOWNLOAD)

5. Stay on top of changing legislation, and make the most of tax allowances and reliefs

Understanding available tax benefits such as the Independent Earner Tax Credit and R&D tax credits can be challenging, especially with the ever-changing tax laws and regulations. This is where consulting with a skilled accountant can be highly beneficial. 

At Beany, our accountants do more than just ensure you're meeting your tax obligations through timely account and tax return filings. They are constantly updated on legislative changes and are committed to assessing your overall tax situation. 

At Beany, we can help you to strategically allocate profits in a way that minimizes your overall tax liability, ensuring you leverage all available tax allowances and reliefs to your advantage. Contact Beany today to discover how we can assist you in navigating your tax obligations and optimizing your tax savings throughout your business journey. 

6. Start maintaining a budget - and make an effort to adhere to it!

Drafting a budget is an important practice for businesses of all scales. However, for small business owners, the sheer volume of competing tasks often relegates budgeting to the back burner, leading to situations where budgets are either hastily constructed and forgotten, or entirely neglected.

The significance of a well-thought-out budget cannot be overstated. It serves as a financial compass, guiding cash flow forecasting and monitoring to ensure sufficient funds are on hand for forthcoming expenses, thereby averting potential cash crunches that could disrupt operations. 

Furthermore, a budget acts as a blueprint for future planning, whether for investing in new assets, exploring expansion possibilities, or augmenting the workforce. It instils a culture of financial discipline and accountability, spotlighting areas ripe for cost reduction or efficiency enhancements, directly influencing the bottom line. 

Moreover, a budget is instrumental in assessing business performance, enabling more strategic decision-making.

The creation of a budget is merely the beginning. Regularly revisiting and contrasting actual financial outcomes with budgeted projections is critical. This routine check-up allows for the prompt detection of any deviations, facilitating swift corrective measures to realign with financial targets.

A new financial year presents an ideal opportunity to implement strategies that enhance your business's financial well-being. 

Getting a clear grasp of your tax responsibilities

Ensuring a distinct separation between personal and business finances

Understanding what expenses are tax-deductible

Staying informed about the latest tax laws

These steps can collectively equip you to approach the 2024 New Zealand tax year with confidence.

At Beany, our commitment lies in empowering small businesses with unwavering support, offering advice and guidance to effortlessly navigate through the intricacies of tax compliance and financial stewardship. If you have any questions or you would like to learn how Beany can help you, reach out today.

Beany Resources delivered straight to your inbox.

Business advice

There’s a lot to consider when setting up a company in NZ. Conquer the learning curve with our guide as we walk through the top ten key things to keep in mind.

FINANCIAL LITERACY  •  29 APRIL 2024  •  5 MIN READ

10 crucial considerations before setting up a company in New Zealand

Whilst setting up a company in New Zealand can be an exciting time, there’s a lot to consider. From choosing a business structure to understanding your legal obligations, new business owners can face a bit of a learning curve. Let’s dive into some key things to keep in mind as you learn how to set up a trading company.

Is a limited company structure the right fit for you?

When it comes to new businesses, most choose to trade either as a sole trader or as a limited company set-up. To help you make an informed decision, we've prepared an e-book outlining the differences between the two, as well as guidance on choosing the most suitable business structure. Feel free to access it here. 

However, the key thing to know is whilst a limited liability company structure offers you more protection and less liability, there are also greater compliance requirements and responsibilities.

In New Zealand, the structure of your company can take several forms, each catering to different business needs and objectives. The most common type is the limited liability company, where the financial responsibility of the company's shareholders is limited to the amount of money they have invested in shares. 

This structure is ideal for businesses intending to operate for profit, offering protection to shareholders' personal assets against the company's debts and liabilities.

How is a company set up, and how do you legalise the name? Your company's legal name is the one you register with Companies Office. However, it doesn’t need to be the name your company ‘trades’ under.

There are also specific rules to follow when it comes to company names. For instance, it cannot be identical (or too similar) to an unrelated company, and it cannot include sensitive, abusive, offensive, or illegal words or phrases. It also needs to end in "Limited" or "Ltd."

When setting up a company in New Zealand, it's important to understand the roles and structures that are inherently part of its operation. By requirement, your company must have both directors and shareholders. 

Directors are responsible for the day-to-day management of the company, whereas shareholders own the company through their shares and can profit from it via dividends. While it's common for individuals to hold both positions simultaneously, offering flexibility in how you wish to structure your involvement, the distinction between the two roles is crucial.

Directors typically do not receive a regular salary as one might expect in traditional employment roles. Instead, they may be compensated through directors' fees, although this practice varies and is not commonplace among all clients. On the other hand, shareholders may be eligible for a shareholder salary, a form of remuneration we frequently facilitate towards the year's end, reflecting their ownership stake and contributions to the company's success.

The decision lies in whom you appoint to these roles, as each brings specific duties and benefits. Understanding the financial nuances of how directors and shareholders are compensated can significantly impact the strategic planning and financial management of your limited company.

Reserve your company name and register with Companies Office

Before you register your limited company, an important preliminary step is to reserve your company name with the Companies Office. Submit your desired company name for approval once you ensure it meets the regulatory requirements and is not already in use or too similar to existing names. There's a nominal fee of $11.50 for this service. 

Once your company name is approved, it secures your chosen name and allows you to proceed with the registration process. The next step is to pay the $136.55 incorporation fee for setting up your company. The Companies Office does not guarantee a specific timeframe for this process—it can take 2-3 weeks depending on their workload. 

During registration, you will need to provide detailed information about the directors and shareholders. This includes their addresses, places and dates of birth, and IRD numbers. 

Additionally, you must provide the company's contact details, including the registered office and address for service. This information ensures your company is properly documented and legally recognised, setting a solid foundation for your business operations. 

Once registered, you will receive your company's Incorporation certificate. This can be downloaded any time from the list of documents at the Companies Office. Keep this safe as you will need it to open a company bank account!

Registering with Inland Revenue Department (IRD) 

In New Zealand, there is no fixed timeframe for when you need to register your company for tax purposes. You have the option to apply for an IRD number or GST (Goods and Services Tax) number at the same time as incorporating your company. Alternatively, you can choose to complete this step at a later date or have your accountant handle the application on your behalf. 

If your company plans to hire staff, you will need to register as an employer during the tax registration process. This approach provides the flexibility to align the tax registration with your business needs and timeline.

You will also need to register for GST once your company's income reaches the threshold of $60,000 within a 12-month period. From that point onwards, it's essential to start filing GST returns regularly. This process ensures compliance with New Zealand's tax laws and helps maintain accurate financial records for your business. 

Lastly, when employing staff or paying a Directors Fee, registering for PAYE (Pay As You Earn) with Inland Revenue is mandatory in New Zealand. After registration, it's required that you operate a payroll system to report earnings and deductions to Inland Revenue within 3 days of making payments. 

Typically, PAYE payments for most businesses are due on the 20th of each month. This ensures that your business stays compliant with tax laws and regulations, facilitating the timely and accurate reporting of employee wages and directors' fees.

Setting up as a limited company? You’ll soon need a new bank account. A limited liability company is a distinct legal entity separate from yourself, even if you're the owner and operator. You will need a company bank account separate from any private use. All your company’s income and expenditures should go through this account.

It's important to note that setting up a company bank account can take some time. Therefore, it's advisable to initiate this process as soon as you receive your Certificate of Incorporation. This approach will ensure you're prepared to manage your company's finances efficiently right from the start, avoiding any delays in handling transactions as your business activities commence.

Choosing the right software is a crucial step in setting up your limited liability company, and accounting software like Xero brings numerous advantages. It not only provides a comprehensive view of your business's financial health, highlighting successful products or services and pinpointing areas needing improvement but also ensures that your records are accurately and systematically organised. 

This is particularly important given the legal requirement for companies to maintain records for at least seven years. With a tool like Xero, you can confidently manage your records in one streamlined location. Using Xero or similar software for GST returns not only simplifies the filing process but also maintains a precise record of submissions and facilitates the automation of data exchange with Inland Revenue.

For GST-registered businesses, while it's highly beneficial to utilise compliance software such as Xero for filing GST returns due to its convenience, accuracy, and integration capabilities with Inland Revenue, remember that it's not a compulsory approach. Businesses have the flexibility to file GST returns directly through MyIR, offering an alternative for those at varying levels of digital adoption.

From 1 April 2023, to reclaim GST on your purchases, it's essential to keep "Taxable Supply Information" for all purchases exceeding $200 (including GST). This new guideline simplifies compliance by eliminating the need for GST tax invoices for these transactions. Accurate record-keeping of these purchases is vital for both compliance purposes and to ensure you can correctly reclaim GST on business-related expenses.

Advanced accounting software typically allows for the direct uploading of invoices and receipts to transactions, making it easier to manage and retrieve necessary documentation for IRD audits or reviews.

For more information check out our article on 7 ways to enrich your business with Xero accounting software.

Writing a business plan helps to scrutinise the finer details of your ideas. Know your market, conduct thorough research, and craft a comprehensive plan for achieving your goals. This step is critical, as by doing so you will gain insight into how you'll deliver your new product or service to customers whilst avoiding any pitfalls!

Creating a budget for setting up a company in New Zealand

Creating a budget helps you keep track of your expenditures and identify any potential overspending early on. Accounting software can, again, come in handy here as you can monitor revenue and spend against a set budget. You’ll likely need to revise and refine your budget as you go.

There's a lot to wrap your head around as you set up a limited company. If this is your first time, we strongly recommend seeking assistance from a professional, such as a Beany accountant. They can help with all the topics discussed in this article, and make sure you're compliant right from the start.

Learn more about your start-up costs here: The cost of starting a business in New Zealand 

Another vital aspect to consider is establishing a Company Constitution. This document outlines the rights, powers, and duties of the company, its board, individual directors, and shareholders. While not mandatory (many companies operate without one) a constitution can prove invaluable in times of change or when resolving disputes. You have the flexibility to adopt a constitution at any stage, allowing you to tailor it to your company's evolving needs and circumstances. 

Adopting a company constitution involves a few key steps, which can vary slightly depending on local laws and regulations: 

The first step is to draft the constitution. This can be done using a template or by consulting a legal professional to ensure it meets your company’s specific needs and complies with relevant laws.

Typically, the adoption of a constitution requires approval from the company’s shareholders. This is often achieved through a vote at a shareholders' meeting. The specific requirements for approval (such as the percentage of votes needed) can depend on the jurisdiction and the company’s articles of association or bylaws.

Once approved by the shareholders, the constitution may need to be filed with the Companies Office or relevant regulatory body in your jurisdiction. This step makes the constitution an official document governing the operations of your company.

Keep a signed and dated copy of the constitution in your company records, even if filing isn't required. This ensures you have evidence of the shareholders' approval and the constitution's adoption date.

After adopting a constitution, the company, its directors, and shareholders must comply with its provisions. The constitution can be amended in the future if needed, but this typically requires a similar process of drafting changes, obtaining shareholder approval, and updating the official record with the regulatory body.

If you want to run your business but you’re not quite ready, bookmark this page to refer back to how to set up a company in New Zealand. 

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant would. We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Register today.

Financial literacy

We dive into the GST applied to remote services by overseas suppliers, its impact on GST-registered businesses, and practical steps to ensure compliance and avoid unnecessary charges.

This blog delves into the GST applied to remote services by overseas suppliers, its impact on GST-registered businesses, and practical steps to ensure compliance and avoid unnecessary charges.

What is ‘Netflix Tax’

The landscape of taxation is ever-evolving, and New Zealand is no exception. With the rise of digital services and the global marketplace, the New Zealand government has implemented GST on remote services supplied to its residents by overseas businesses. It’s commonly known as the ‘Netflix Tax’.

Remote services are a service that, at the time of the performance of the service, has no necessary connection between (a) the place where the service is physically performed; and (b) the location of the recipient of the services”.

supplies of digital content, such as e-books, movies, TV shows, music and online

online supplies of games, apps, software and software maintenance

legal, accounting or consultancy services

The purpose of the legislation is to affect consumers rather than businesses. It stipulates that international suppliers should consider a New Zealand resident to be unregistered for GST unless they have been given a GST number by the customer. This means a business supplying remote services to a New Zealand GST-registered business should not be charging them GST. 

If your business is registered for GST, you must provide the supplier with your GST or IRD number to ensure you’re not inadvertently charged GST. In other words, this means you should be paying less to the oversea supplier as you’re not getting charged the extra 15%.

If a non-resident supplier inadvertently treats a GST-registered business as an individual consumer and charges the business GST, there are two solutions:

The GST-registered recipient should seek a refund from the non-resident supplier;

They cannot claim the expense in their GST return.

If the value is NZ$1,000 (including GST) or less, based on the value of the supply in New Zealand dollars at the time of supply: 

The supplier can choose to provide a tax invoice to the NZ business rather than issue a refund;

The supplier must provide a full tax invoice, even if the payment for the supply (including GST) is less than $50. The new "Taxable Supply Information" rules don’t apply;

Only with the full tax invoice, can the NZ business make an expense claim in their GST returns to get the GST back.

Read more: Changes in tax invoices for 2023: what you need to know

Understanding the nuances of GST can help small businesses owners navigate the tax landscape more effectively and stay compliant. For other GST guides for small businesses, including registration, record-keeping, and tax invoicing, head to our resource library to read more.

Stay informed on the latest trust tax rate changes effective from 1st April, 2024. Learn more about specific exemptions that could benefit your trust.

INDUSTRY NEWS  •  4 APRIL 2024  •  1 MIN READ

The Trust Tax Rate Has Increased to 39% From 1st April 2024

From the 1st April 2024, the trust tax rate has increased from a flat rate of 33%, to a flat rate of 39%. This is on any income retained in the trust and not distributed to beneficiaries.

Exemption 1: if your trust income is less than $10,000

If your trust earns $10,000 or less in a tax year, and this income is retained in the trust and not distributed to beneficiaries, you will only pay tax at 33%. However, if your trust earns any more than $10,000, you need to pay at a rate of 39%.

Exemption 2: the estate of someone who has died

If an estate continues to earn income while it’s being wound up, that income will continue to be taxed at 33%. This rate will apply for all estate’s income during the tax year the person dies and for the next 3 years. After 3 years, any income will be taxed as though it is a trust at 39%.

If you settled your trust to care for disabled beneficiaries, then it will continue to pay tax at the 33% tax rate, no matter how much it earns. 

The IRD characterises a 'Disabled beneficiary' as an individual who, within a given tax year, is the recipient of one or more of the following governmental support payments: the Disability Allowance, the Child Disability Allowance, the Supported Living Payment (because of restricted work capacity), or the JobSeeker Support Health and Disability (if this has been paid for at least 6 months).

Disabled beneficiaries also include anybody over the age of 65 who would have met the ‘disabled beneficiary’ definition in the year they turned 65, or the tax year before that year.

Your trust can qualify for this 33% tax rate if it cares for more than 1 disabled beneficiary, but not if it has any beneficiaries who do not meet the definition.

Exemption 4: Energy Consumer Trusts or Lines Trusts 

These are a special type of trust that deals with electricity distribution. These are taxed at 33%.

Exemption 5:  Legacy Superannuation Funds

Some superannuation funds pay tax at 28%.

If you’d like to read more on this topic, you can read IRD’s fact sheet, or contact us at support@beany.nz for more information.

Industry news

Stay informed and learn the new rules on the latest GST regulation updates for businesses using digital apps/platforms to list their services and/or short stay accommodation.

INDUSTRY NEWS  •  3 APRIL 2024  •  1 MIN READ

GST Regulation Updates for Businesses Listing Their Services via a Marketplace App

New GST rules have been implemented from 1st April 2024 that impact businesses that utilise an online marketplace to sell or provide their service. For example, short-term accommodation providers like Airbnb, ridesharing services like Uber, and food delivery like Uber Eats.

Under previous rules, end service providers (e.g. property owner or driver) who are GST-registered were responsible for collecting and returning GST to Inland Revenue for any provision of a service in New Zealand. Under the new rules, this is not the case. 

Under the new rules, the electronic marketplace is responsible for collecting and returning GST to the IRD when a listed service on their platform is provided or received in New Zealand, regardless of whether the provider of the service is GST registered or not.

What this means if you use an online marketplace to sell your services and you’re GST registered

The new rules make it quite simple for you. 

Since the digital platform that facilitates the sale of your service is now responsible for collecting and returning the GST on your behalf, payments you receive from the platform will be the ex-GST amount. This means that any income you earn via these platforms can be treated as zero-rated income in your GST returns. You can still claim the GST on any expenses like normal and if you have income that is earned from other means you still need to account for this as normal too.

What this means if you use an online marketplace to sell your services and you’re not GST registered

You can continue as normal. However, there are a few critical things you should be aware of.

With the changes, your pricing may be impacted if the listed prices are deemed inclusive of GST by the online marketplace. Since they now have to return GST on behalf of all providers on their platform, this will eat into your listed price.  There is a credit scheme (see below), but these changes mean you will no longer receive the full amount of your listed price when a service is booked and provided.

This credit scheme reduces the amount of GST that the marketplace has to return for non-GST registered providers. 

Marketplace operators will still collect GST at 15% from your customer who has requested the service (i.e. the person who booked a stay at your accommodation, a driver or food delivery), but rather than returning the full 15% GST to the IRD, they only have to return 6.5%. The remaining 8.5% will be passed onto you as the end provider.

This 8.5% is intended to recognise the GST that unregistered sellers have on the costs for supplying the listed services.

Essentially, this means if you do not review or update your current pricing, you won’t be receiving the same net income as you used to due to the 6.5% being deducted from your list prices.

It’s important to note that if your total income is over $60,000 in a 12 month period, or goes over that amount, you will need to register for GST as normal and advise all platforms where you have your listings of the change so that they are aware to follow the rules for GST-providers instead.

There is an opt-out available for large GST-registered accommodation hosts if they want to retain responsibility for collecting and returning their own GST.

Make more than NZ$500,000 in taxable supplies in a 12-month period; or 

Have more than 2,000 nights of accommodation listed on 1 electronic marketplace in a 12-month period).

Businesses who meet the first criteria can notify the online operator that they are opting out, but those who don’t make more than $500,000 but meet the 2000 night threshold must enter into an agreement with their operator to opt out.

What this means for marketplaces/platforms

The new rules make it more complicated from the platforms viewpoint as they now have to keep accurate information on all their suppliers and if they are GST registered or not.

We are already hearing of some platforms refusing to allow non-registered suppliers, or only working with those who are large enough to be exempt from the new rules.

Marketplaces/platforms will need a good accounting system and process in place to keep track of credit amounts for non-registered providers, and setting up bank rules in Xero to help with reconciling will be crucial.

In summary, if you’re a GST-registered service provider who uses a third party marketplace to facilitate the sale of your services, your life just got a bit easier.

If you’re non-GST registered, the main takeaway is to consider reviewing your prices so that you aren’t wearing the 6.5% that these platforms now need to pay on your behalf to the IRD. 

If you operate an online platform or marketplace that facilitates the listing, sale and provision of services, then please consult with your accountant for some advice around the new rules and ensure your accounting software is optimised to do the heavy lifting.

GST regulation updates for businesses listing their services via a digital marketplace

Getting payroll right is crucial for businesses, from legal compliance to employee retention. Learn how integrated HR and payroll systems can streamline processes.

FINANCIAL LITERACY  •  27 MARCH 2024  •  2 MIN READ

Ensure compliance and employee satisfaction with accurate payroll practices

Paying employees correctly and on time, and ensuring they get their entitled leave and holidays, plays a huge part in keeping them happy and motivated.

For most people, earning money is a principal reason to go to work each day. It’s also one of the easiest ways for them to measure themselves and their achievements.

While this can all sound obvious, there are many Kiwi businesses that don't get this right. Back in 2016, the Ministry of Business, Innovation, and Employment (MBIE) estimated that payroll underpayments could affect more than 700,000 New Zealand employees and add up to more than $2 billion. In the years since, there have been a slew of high-profile cases of large organisations getting employee pay wrong, including Woolworths, McDonalds, the Ministry of Education, Te Whatu Ora Health NZ, and MBIE itself. 

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