New Zealand is a small business nation, with over 97 percent of Kiwi businesses employing 20 workers of less.
But with the end of the tax year coming up on March 31, this inevitably will be a huge area of stress.
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Hannah McQueen from enableMe joined Trudi Nelson on Saturday Fresh to give some pointers for any business that finds themselves stressing at the thought of tax season.
Up to 20 percent of people go out of business because they can’t afford to pay their tax, according to the tax expert.
“If you’re struggling to pay tax, there’s something not quite right in your financial statements,” she said.
Ms McQueen’s biggest warning is around putting personal expenses through the business for tax deduction.
She explained that even if those expenses are legitimate, often accountants will dismiss such costs as tax-deductible.
“Often people are trying to put all their personal costs through the business but it’s not going to be treated like that at the end of the year,” she told RadioLIVE.
Ms McQueen also recommends to “chase your debtors hard” before the end of the month.
“If you have debtors you’re going to pay tax on that money, whether you’ve received it into your bank account or not,” she said.
And if you’re not going to get the money, write it off. According to Ms McQueen, writing off a debt means no tax needs to be paid on that income.
Finally, Ms McQueen advised to get asset purchases or stock down to as low as you can get, that is, if they are tied to the business.
Because you’ll pay tax on that too.
Listen to the full interview with Hannah McQueen above.