We often get asked by people about what these are and why you have to do them.
We thought we’d break it down in to super plain English you can understand.
Firstly, it costs about $40 to file your annual return and often your accountant will do this for you for anywhere from Free to $350 a year.
The annual return is a yearly update of the details of your company (like renewing your car registration) to ensure the information that the Companies Office holds, is correct. Such things as Director(s), Shareholder(s) & Company details including addresses and share allocations (how many shares each shareholder holds).
A Director, or someone with appropriate authority (delegated in writing by the Director) needs to complete the annual return.
For most companies this is a tick the box exercise and you’re done. The worst part is actually remembering how to log in to do it. Using your RealMe login is the preferred method by the companies office so never lose that log in.
The most common question people get stuck on is whether your company has an ‘Ultimate Holding Company’ and this basically means ‘Is your company owned by another (holding) company’. For most people this answer is no, but if it is yes, follow the prompts to answer who the Ultimate Holding Company is.
What if you don’t do it?
Eventually the Companies Office will remove your company from the registrar. So it’s worth ensuring you get it done.
If you’re really stuck, feel free to drop us a line and we will get back to you and if we have to, we’ll put together a more comprehensive guide to help businesses save some money.
![From what we have seen, business owners SHOULD NOT blindly pay their May tax without advice as to whether their profitability warrants it. Why? Because, 1/3rd of our clients won’t be paying tax in May. Accountants are on the front line of the economy and we have real time financial data. At the time of writing this, it is less than 10 days after the end of the financial year, and we’ve mostly finished reviewing the profitability of a good cross-section of the NZ economy: construction, engineering, marketing, e-commerce, services. All sorts. Here’s some tax insight that might help you understand what’s happening in the economy. AND, hopefully understand how tax works for many of you businesses owners. For some background, a lot of NZ SME’s pay tax in August, January and May to stay current with tax. This is loosely based on their profitability of the year before (2023FY ended 31/3/2023). This means that when they get their accounts done, they have hopefully cleared taxes on profits for the current financial year (2024FY ended 31/3/2024). We don't just tell our clients to pay tax based on last year. Every year is different. We review our clients' profitability throughout the year and by this final payment on the 7th of May, we have a really clear insight as to how profitable the financial year was. The 2 common themes are: 🔸 A lot of businesses don’t even need to make a payment in May because their profitability will be lower than last financial year, so they have less tax to pay. They've paid enough tax in August & January. 🔸 Some of those who do need to pay tax (even at a higher rate) are struggling to collect the cash (income from the work they’ve done) so they are battling to see how they can make the payment.
One of the tricky things for a growing business is that IF they don’t collect the money for the work they do in a timely manner, they will always struggle to pay their tax. Why? Because they’ve done the work, sent the invoice which recognises revenue and profit, BUT they haven’t turned it into cash in their business. [Continued in comments...]](https://nextadvisory.nz/wp-content/plugins/instagram-feed/img/placeholder.png)
