The Contractor Accountant
that helps you Relax!

Working as a sole trader

Working as a sole trader is the most common form of trading structure that self-employed workers in NZ use. It’s simple to see why. The setup is extremely straightforward, administration is easy, and with our accounting software, Simplifi, it’s simple to track your income tax bills throughout the financial year along with any tax payments that are due.

Whether you are a tradie, IT consultant, engineer, health sector worker, someone who works in the creative industry, or any other type of consultant / freelancer, setting up to work as a sole trader is an easy route for self-employed kiwis, and your dedicated accountant at Relax Accounting will be ready to assist with tax advice, accounting support, and helping to file your tax returns. We find that most sole traders need the same accounting and tax support.

Working through your limited company

Running your own business through a limited company is another common trading structure for freelancers in contractors. The setup is a little more involved than registering as a sole trader, and there are a handful of extra reporting obligations that fall onto limited company workers. However, a lot of people enjoy the distinct separation between themselves and their business and this makes the use of a limited company attractive for a lot of people.

As you would expect, limited company contractors cover a broad range of business activities, and your accountant at Relax Accounting is ready to help.

Keeping this business financially fit

We all enjoy heading out to the gym (and playing the odd Wednesday night touch rugby game) to help keep our bodies fit and our minds active, and your business will also respond to being kept financially fit. This may mean keeping on top of your invoices, expenses, upcoming income tax and GST payments, and also making sure your bookkeeping is keeping up with the play. A financially healthy business can pay bills and file its tax returns on time, invest in new opportunities, and handle tough times. Plus, it helps you make smart business planning choices, attract people who want to help your business, and keep a good reputation. Our accountants at Relax Accounting are personal trainers for businesses, but we won’t yell at you to give us 20 more box jumps.

GST returns

You need to register for Goods and Services Tax (GST) if your business sells taxable goods or services and you make over NZD $60,000 a year, or if you expect your turnover to exceed this threshold in the next 12 months.

Once you become GST registered you have to start adding GST on your sales which effectively puts up your sale price by 15%. If your clients, or the people you sell to, are also GST registered then they can claim back the extra GST cost from the Inland Revenue which means they are not financially impacted at all.

Also, once you become GST registered you can start to claim back the GST on your business expenses which effectively lowers the cost of the purchase for you.

Of course, becoming GST registered means that you now need to start filing GST returns with the IRD. Most often our clients will file every two months or every six months (they can choose) and with our accounting software Simplifi this process is a breeze. Once your bank transactions are reconciled, your GST return will be automatically calculated. In fact, your accountant will be able to help you easily navigate the world of GST.