The Inland Revenue Department (IRD) has launched a new initiative to help tradies stay on top of their tax obligations. From Monday, July 1, 2024, the IRD will be visiting construction sites across New Zealand as part of the 'Tax Toolbox' campaign. This campaign aims to engage with tradies, educate them about their tax responsibilities, and provide support to manage their tax affairs effectively.
Key Objectives of the Campaign
The primary goals of the campaign is to:
Ensure that all tradies are aware of the Tax Toolbox and how it can assist them.
Help tradies understand their essential tax obligations, including GST, income tax, and ACC levies.
Motivate tradies to address any outstanding tax returns and manage their debts.
Encourage tradies to seek assistance from the IRD or professional tax agents when needed.
During site visits, the IRD will provide information and brochures and engage briefly with tradies to discuss the Tax Toolbox campaign. Additionally, the IRD will be hosting 'tradies' seminars covering the top five tax tips for tradies.
Essential Tips for Tradies
To ensure you are meeting your tax obligations and maintaining a healthy financial status, consider the following tips:
Understand Your Obligations: Familiarise yourself with the different taxes you need to pay, such as income tax, GST, and ACC levies. If your turnover is more than $60,000 a year you should be registered for GST. If your tax bill was over $5000 in the previous year, you will need to pay Provisional Tax.
Keep up-to-date business records: Keep accurate records of all your financial transactions. Use accounting software or a bookkeeping service to ensure everything is documented correctly. Learn what you can and cannot claim as an expense.
Stay Up-to-Date with Tax Payments: Make sure you are telling IRD about all the income you earn. File your tax returns and pay any taxes due on time to avoid penalties and interest charges.
Plan Ahead: Set aside money regularly to cover your tax liabilities. This can help prevent cash flow problems when tax payments are due. Pay income tax on a cycle to suit your cash flow.
Employer Obligations: If you run a business and are employing people, you need to make PAYE deductions and inform IRD.
If you are unsure about any of the above or you need assistance managing your finances, don’t hesitate to seek help from a professional bookkeeper or tax agent.
As a tradie, staying on top of your tax obligations is crucial for your business’s financial health. Take advantage of the IRD’s Tax Toolbox campaign and seminars to get the support and information you need. Keep an eye on the IRD’s seminars page to register for an upcoming session and ensure you’re equipped to handle your tax responsibilities.
If you need personalised assistance, consider getting in touch with a professional bookkeeper. I can help you manage your financial records and tax obligations, and leave you get on with the stuff you like doing in your business.
Remember! A bookkeeper is a business expense, so can go towards lowering your overall tax bill.
