Mind the gaps and other tips from Inland Revenue to prevent your paperwork being held up by common mistakes.
You have to register for GST as soon as you think you’ll earn more than $60,000 in a 12 month period, but you may want to register earlier so you can claim back GST while your business is still small. Make sure you provide the correct information so your registration isn’t delayed by avoidable mistakes.
These are four common mistakes spotted by Inland Revenue:
Mind the gaps. Check your form includes:
All businesses, contractors and self-employed people choose a business industry classification (BIC) code based on their main work activity. Picking the right BIC code is easier now with the revamped Business Industry Classification Code website (external link) .
As well as incorrect BIC codes, Inland Revenue is seeing errors when it comes to describing what a business does.
GST registrations come in with ‘family trust’ as the business description, but this isn't a business activity. What’s required is the actual business activity the trust is engaged in, eg farming.
A number of registrations arrive with two important sections left blank – taxable period (how often you want to file GST returns) and accounting basis (how you’ll claim and pay GST). There are three choices for both, so pick the options that suit your business best.
About 80% of businesses choose the payments accounting basis, which means you won’t have to make a GST payment before you’ve received money from your customers.