Question 1

What does a tax accountant do in New Zealand?

Accepted Answer

A tax accountant in New Zealand helps individuals and businesses with tax compliance, preparation of tax returns (IR3, IR4, IR7), GST returns, tax planning strategies, IRD correspondence, and ensuring you claim all eligible deductions. They stay updated on tax law changes and can represent you during IRD audits or disputes.

Question 2

How much does a tax accountant cost in NZ?

Accepted Answer

Tax accountant fees in New Zealand typically range from $150-$400 for simple personal tax returns, $400-$800 for small business returns, and $200-$350 per hour for consultation. GST returns usually cost $150-$300 quarterly. Complex business or trust returns may cost $800-$2000+. Many accountants offer fixed-fee packages.

Question 3

Do I need a tax accountant or can I do it myself?

Accepted Answer

You can file simple tax returns yourself using myIR, but consider a tax accountant if you're self-employed, have rental properties, run a business, have complex investments, face IRD issues, or want to maximize deductions. The cost often pays for itself through tax savings and peace of mind.

Question 4

Are tax agent fees tax deductible in NZ?

Accepted Answer

Yes, tax agent fees are generally tax deductible in New Zealand. You can claim the cost of preparing your tax return, GST returns, and tax advice as a deduction in the year you pay the fee. This applies to both personal and business tax services, making professional help more affordable.

Question 5

How do I choose the right accountant for my needs?

Accepted Answer

Choose a tax accountant who is qualified (CA, CPA, or tax agent), experienced with your situation (individual, business, contractor), offers transparent pricing, has good reviews, responds promptly, and you feel comfortable communicating with. Consider their location, technology use, and whether they offer year-round support or just tax season help.

Question 6

When is the tax return deadline in New Zealand?

Accepted Answer

For individuals filing their own tax return, the deadline is 7 July following the end of the tax year (31 March). If you use a tax agent, you typically get an automatic extension to 31 March of the following year. Business tax returns have different deadlines depending on your company's balance date.

Question 7

What is the difference between a tax agent and an accountant?

Accepted Answer

A tax agent is registered with the IRD to provide tax services and prepare tax returns. An accountant may also be a tax agent but provides broader services like bookkeeping, financial advice, and business consulting. All tax agents are accountants, but not all accountants are registered tax agents. Check the IRD register to verify tax agent status.

Question 8

Can a tax accountant help me if I owe money to the IRD?

Accepted Answer

Yes, a tax accountant can help negotiate payment arrangements with the IRD, apply for installment plans, request penalties to be waived in special circumstances, and ensure you're maximizing deductions to reduce future tax bills. They can also help prevent future tax debt through better tax planning.

Question 9

How long does it take to get a tax return done?

Accepted Answer

Simple personal tax returns typically take 1-2 weeks once you provide all information. Business tax returns can take 2-4 weeks depending on complexity. During peak tax season (March-July), expect longer turnaround times. If you need urgent service, ask about priority processing (may cost extra).

Question 10

What documents do I need for my tax accountant?

Accepted Answer

For individuals: income statements (salary, wages, interest, dividends), expense receipts if self-employed, rental property income/expenses, donation receipts, IRD number. For businesses: financial statements, bank statements, receipts for expenses, GST returns, PAYE summaries, asset purchase records. Your accountant will provide a specific checklist.

Question 11

Do small businesses need a tax accountant?

Accepted Answer

While not legally required, most small businesses benefit from a tax accountant's expertise. They ensure GST compliance, maximize deductions, handle PAYE obligations, prepare annual financial statements, and provide strategic tax planning. This typically saves more money than the accountant's fees and reduces stress.

Question 12

What qualifications should my tax accountant have?

Accepted Answer

Look for accountants with CA (Chartered Accountant) or CPA (Certified Practising Accountant) designations. They should be registered as a tax agent with the IRD. Membership in professional bodies like Chartered Accountants ANZ (CAANZ) or CPA Australia indicates ongoing professional development and adherence to ethical standards.

Question 13

Can I switch accountants mid-year?

Accepted Answer

Yes, you can switch tax accountants at any time. It's best to do so at the start of a new financial year (1 April) to avoid complications, but it's not required. Your new accountant will request records from your previous accountant. Make sure there are no outstanding fees or work before switching.

Question 14

How often should I meet with my tax accountant?

Accepted Answer

For individuals, typically once a year before tax return deadline is sufficient. Business owners should meet quarterly to review financials, GST returns, and tax position. Schedule additional meetings for major business changes, large purchases, tax planning before year-end, or if you have concerns about IRD matters.

Question 15

What is GST and do I need to register?

Accepted Answer

GST (Goods and Services Tax) is a 15% tax on most goods and services in NZ. You must register if your business earns over $60,000 in a 12-month period. You can voluntarily register below this threshold. Once registered, you charge GST on sales, claim GST on business purchases, and file returns monthly, bi-monthly, or six-monthly.

Question 16

Can a tax accountant help with IRD audits?

Accepted Answer

Yes, experienced tax accountants can represent you during IRD audits and investigations. They'll gather required documentation, respond to IRD queries, explain discrepancies, negotiate settlements if needed, and ensure your rights are protected throughout the process. Having professional representation significantly reduces stress and often results in better outcomes.

Question 17

What is provisional tax and who pays it?

Accepted Answer

Provisional tax is paying your income tax in instalments throughout the year, rather than a lump sum after year-end. You pay provisional tax if your residual income tax (RIT) is over $5,000. It's paid in three instalments (28 August, 15 January, 7 May) or through AIM (Accounting Income Method) for businesses.

Question 18

Can tax accountants help with KiwiSaver?

Accepted Answer

While KiwiSaver is managed by providers, tax accountants can advise on employer contribution obligations (minimum 3%), tax implications of contributions, how KiwiSaver affects your tax code, and optimizing contributions for tax efficiency. They can also help with employer KiwiSaver compliance and reporting requirements.

Question 19

What is the Brightline Test and how does it affect me?

Accepted Answer

The Brightline Test determines if you need to pay tax on property sales. Currently, if you sell a residential property within 10 years of purchase (2 years for your main home), any profit is taxable. Exceptions exist for inherited property and main homes. A tax accountant can help you understand your obligations and calculate any tax owed.

Question 20

How can a tax accountant save me money?

Accepted Answer

Tax accountants save money by: identifying all eligible deductions you might miss, structuring your business for tax efficiency, claiming depreciation on assets, optimizing timing of income and expenses, reducing IRD penalties through accurate filings, advising on GST strategies, and planning to minimize provisional tax. The average client saves 2-5 times the accountant's fee.

New Zealand Tax FAQs