Keeping good business records can lead to a good night’s sleep is the main message in Inland Revenue’s latest campaign targeting the hospitality industry. Hospitality is considered a high-risk industry group as part of Inland Revenue’s long-running hidden economy programme to identify undeclared income.
Customer Segment Lead Richard Philp said there’s a disproportionately high number of overdue GST, income tax and PAYE payments from traders in the restaurant, café, bar and takeaway food sectors.
“Commonly we find those operators who fall behind on their tax obligations also have poor business records,” he said. “We see things like unrecorded sales, staff wages off the books and discrepancies between supplies bought and goods sold. Failing to keep good records can lead to some difficult conversations about tax, but luckily we’re here to help.”
Both the business.govt.nz and Inland Revenue websites are full of valuable information on how to run a successful business including keeping good records, time management and basic tax responsibilities.
“It’s easy to let paperwork go, especially in the hospitality business where everyone is constantly under pressure,” Philp said. “But having good systems in place can make life much easier when it comes to filing GST and tax returns. There are software packages on the market to help businesses of any size to log income and expenses – and the purchase of them is tax deductible. Even a simple spreadsheet can work just as well.”
Maintaining good books not only helps with tax obligations but also provides a more accurate view of cash flow, allows greater access to finance and ensures a business is correctly valued. Philp said the vast majority of hospitality businesses are paying the right amount of tax and have great bookkeeping practices but there are some which create unwanted stress for themselves by not being on top of such an important aspect of their business. “Knowing the books are all in good order takes a huge weight off a business owner’s shoulders and is worth it to sleep easy at night.”
Find out more about keeping great records at ird.govt.nz/sleepeasy.