You versus your Trust

It is common from a layman’s perspective to not appreciate the relevance of treating separate legal entities as separate. Where expenditure is incurred to derive income, it is typically deductible for income tax purposes to the person that derived the income. Documentary evidence should be held that reflects this connection to ensure the expenditure comprises an allowable deduction. The High Court recently considered this issue in the decision of Wong v Commissioner of Inland Revenue (2018).
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April 8 2019
Terminal tax for 2018
(March April, May and June balance dates)
For all clients except those who have lost their extension of time privilege
7 May 2019
3rd instalment of 2019
Provisional Tax
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Retentions in trust accounts

If you have a significant amount of money owing to you in the form of retentions by a contracting entity, it would pay to get written confirmation the money has been set aside in a trust account. 
You may have noticed a report in the newspaper about Ebert Construction Limited where there was a bookkeeping error and some of the retention money had not been set aside. 
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Ensure donations above board

If you donate large sums to charity, you should check to ensure the entity is still approved by Inland Revenue. To find out, see:
You can pay donations through your company, but there must be a profit at the end of the year after deducting the donations. Losses resulting from donations paid are not tax deductible.
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Don’t become a dependent business
A dependent business is one which relies on one or a few other businesses to remain viable. Trade cycles are such that buoyant times are followed by high unemployment, business failure and a reduction in demand for goods and services. It is at these times dependent businesses can go to the wall. As a rough guide, make sure no more than 20% of your income is dependent on one source.
Savings accounts
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Plan for Capital Gains Tax

If Capital Gains Tax is introduced (and there is now some debate about this), all assets affected by the tax will have to be valued at the time the new tax starts. 
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Get in quick to get your invoices paid

Cash flow is often a problem for small businesses. They could do a lot to improve it. Here are some suggestions about collecting bills:
1. Send your invoices as soon as you can. Never wait until the end of the month.
2. If it’s a large bill, see if you can get progress payments (include this in your quote).
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As you probably know, Inland Revenue does not attempt to collect GST on low-cost imports (costing $1000 or less), because it’s uneconomical to do so. 
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