It’s almost never the big things. It’s the ordinary transactions that pass through the bank every week and get coded on autopilot.
When we take over a set of books, the same handful of GST errors turn up again and again. None of them are dramatic. All of them add up.
Shouting the crew lunch, or a client a beer. Entertainment is generally only 50% deductible, and the GST needs to reflect that.
What we do is have a conversation with you and your accountant, then confirm whether we claim 50% or 100% through the year. Accountants have a preference on how they want it handled per GST return — some want the adjustment made as you go, others want it all claimed and squared off at year end. Either way it gets agreed once, written down, and applied consistently.
Software billed from overseas is where it gets fiddly. Some suppliers charge NZ GST, some don't. Once an overseas supplier holds your GST number they generally stop charging it — so there's nothing to claim, even though the account looks like every other software cost in the ledger.
Claiming GST on those is an over-claim. It's also completely invisible unless someone checks the invoice.
Not every subbie is registered. If they're not, there's no GST on their invoice and nothing for you to claim — but the payment still gets coded like every other subbie payment, and the GST gets claimed anyway.
You need the paperwork, and it needs to be checked. A real invoice, with their GST number on it if they have one. "They said they'd send it" isn't a tax invoice, and at $500 a week that's a claim you can't support.
Money you take out of the business, and money you put in, are not income and not expenses. There's no GST on either.
What we check is that they're coded to the right place — drawings and capital introduced, not sales or general expenses — and that no GST has been picked up along the way. It's a quiet one, because nothing looks wrong on the bank statement.
Moving money from the business account to the savings account, or across to the credit card, isn't a transaction for GST. It gets coded on both sides.
We check the two sides match and are treated properly as a transfer. Done wrong, the same money shows up as income on one account and an expense on the other, and both carry GST that was never there.
Every one of these is decided when the transaction is coded, not when the return is filed. Get the coding right through the month and the return takes care of itself.
We check every return against the coding before it’s filed, and we run the transactions through our own checking system to catch GST claimed on accounts that shouldn’t carry it. Anything we can’t resolve comes back to you as a short list of questions, not a mystery.
The other number most trade businesses can’t see clearly: What a job actually cost you →
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