By Rosie Gallagher
Various businesses are more at risk from incurring tax debt than others, whether it is storing and filing receipts (“That’s not what your glovebox is for Mr. Tradie!”) or filing on time – “but I’m just sooo busy!”
The most at-risk for tax compliance though, is often the seasonal business – the beach front ice creamery in the Mount or the cherry orchard in Otago – how do you keep earning throughout the year?
The two key approaches to this are provision and/or diversification.
Diversification would mean looking at other options of earning – another example of this would be if your business only has one or two major contracts – if you lost one – would you be able to continue?
Diversification of earning could be as simple as turning those cherries into jam and continuing to sell through Winter or swapping out ice-cream for a coffee cart in the colder months.
The key is not relying on one source of income.
The other approach is provisions. Like the fable of the Ant and Grasshopper, if you cruise through times of plenty, you will likely fail through famine.
Taking $100,000 over 6 months is amazing – but, GST isn’t payable once per year. If all of your income comes at once, make sure that by providing some of that income evenly to other months, you won’t be short of GST payments and the like.
Dealing with tax arrears isn’t just about negotiating the debt accrued – it’s about ensuring the right processes are in place to guarantee future compliance – we can handle the negotiations but, also, help with the advice you need to keep that cash flowing.
Call Rosie to address your tax debt today – 0800 829 277.