Running your own trade business comes with enough challenges – GST doesn’t have to be one of them. Many tradies get caught out by common mistakes, which can lead to cashflow headaches or unexpected tax bills. Here are some practical GST tips to keep you on track.
1. Know When You Need to Register
If your business turnover is more than $60,000 in a 12 month period, you must register for GST. Don’t wait until IRD comes knocking – being proactive saves stress.
2. Put GST Money Aside
That GST portion of your invoice is not yours to spend. A smart habit is to transfer 15% of each payment you receive into a separate GST savings account. When returns are due, you’ll have the cash ready.
3. Keep Clear Records
Using software like Xero makes it easier to separate GST on sales and expenses. No more shoeboxes of receipts – snap photos with Hubdoc or another app, and let the system do the work.
4. Claim Correctly
You can claim GST on business expenses – but only if they’re directly related to your trade. Be careful with mixed-use terms like vehicles or phones. Talk to your bookkeeper to get the right split.
5. File On Time
Late GST returns mean late penalties. Set a reminder or work with a bookkeeper who makes sure you’re always ahead of deadline.
Takeaway: Staying on top of GST is about systems, not stress. Set yourself up properly and it’s just another part of the job.
