If your turnover* has been greater than $500k in the past 12 months, and you are using the 6 monthly GST filing frequency, Inland Revenue (IR) may have exercised it power, and automatically changed your GST filing frequency to 2 monthly from 1 October 2017. If this applies to you, you may have received a letter from IR this past week.
IRD have the power to change your filing frequency because it is compulsory to use the 2 monthly GST filing frequency if your turnover is greater than $500k in a twelve month period.
We do review your GST filing frequency and GST basis (invoice/payments) when preparing year end accounts, however business growth, or changes to business trading do cause changes.
If your turnover was greater than $500k in the past 12 months, however in the next 12 months it is likely to be less than $500k, please let us know and we can apply to the IRD to change you back to the 6 monthly filing frequency.
If this GST change applies to you, you’re now required to file 6 GST returns per year instead of 2. This may create more administration and tax compliance work. We recommend reviewing your GST preparation process and consider options such as Xero or Banklink to assist in preparing the GST returns. We can also prepare, file, and present GST returns to you. Please contact us if you wish to discuss either of these options further.
*Turnover is the total sales value. It is the combined total of the amount customers pay you for goods or services.