GST Mistakes That Could Cost You Thousands

1. Missing GST imports 

   Mis-coding import freight invoices where there is a large GST component that is not 15% of the invoice. *Hint: Use the GST on imports code.  

2. Incorrectly coding GST on overseas sales 

   Some overseas income is zero-rated, not exempt. If you use the incorrect code, this may raise a red flag at IRD when your annual tax return is filed.

3. Claiming GST on non-business or private expenses 

   Including personal costs (like meals, travel, or household bills) in business expenses. IRD regularly reviews these and can deny the GST claim. 

4. Coding GST refunds to sales or other revenue  

   This one hurts! You end up paying GST on GST! If your accountants doesn't complete your GST for you, it can be up to 18 months’ later before this error is found and fixed. 

5. Claiming GST on non-GST registered contractors 

   You should always ask for an invoice when paying a contractor. If they are not GST registered, even a hand written one will do and it must have their contact details. You want to make sure your business is doing the right thing if IRD comes to check you out. 

6. Incorrect GST on asset purchases or disposals 

   Not adjusting GST when buying or selling business assets (vehicles, property, equipment). The biggest errors occur when the asset was partly private or when a property transaction should have been zero-rated. 

7. Forgetting to adjust for mixed-use or change-of-use assets 

   Not making required adjustments when an asset’s business/private use changes (e.g. vehicle or home office). This can trigger large GST adjustments later. 

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