Your first GST return

The first GST return sounds harder than it is. In practice it's a short form asking two questions: how much GST did you collect, and how much did you pay? The work isn't the form, it's having clean numbers to put in it. This guide walks through what the return contains, the one setup decision that matters (your accounting basis), and how the filing itself goes.

What a GST return actually is

For each taxable period, you report the GST you charged on sales (output tax) and the GST you paid on business purchases (input tax). You pay Inland Revenue the difference, or receive a refund if you paid more than you collected, which happens in heavy-spend periods. On a $20,000 invoicing period with $2,000 of GST-carrying expenses, you collected $3,000, you paid about $261, and the return transfers the roughly $2,739 difference.

The setup decision: payments basis or invoice basis

When you register, you choose how GST is counted, and for a contractor the choice is nearly always the payments basis.

• Payments basis: GST counts when money actually moves. You owe GST on invoices when they're paid, and you claim GST on expenses when you pay them. This is available while turnover is under $2 million, which covers every solo contractor. The advantage is that you never owe GST on an invoice a client hasn't paid yet.
• Invoice basis: GST counts at invoice date or payment, whichever comes first, so a slow-paying client can leave you paying their GST before their money arrives. It only becomes compulsory above $2 million.
• Hybrid: invoice basis on sales, payments basis on expenses. For a small business this tends to be the least convenient of the three. It exists, and for most contractors that is all you need to know about it.

Filing it

The return is filed in myIR, where the GST section shows the period, the due date, and the form. With clean records the numbers drop straight in: total sales and the GST on them, total purchases and the GST on those. Payment is due the same day as the return, by the 28th of the month after your period ends (with the two seasonal exceptions: the calendar has every date).

Three first-timer notes:

• File even if the period was quiet. A registered person files every period, including nil returns. Skipping a quiet period is a common way to pick up a first late-filing mark.
• Only claim inputs you have records for. Each claimed purchase needs its taxable supply information (receipt or invoice), kept for seven years.
• Not everything carries GST. Bank fees, residential rent, and overseas software billed without NZ GST have no input tax to claim. If a receipt shows no GST, there's nothing to claim on it.

Having the money ready to pay

Almost no one struggles with the form. The hard part is having the money ready to pay. The GST you collected sat in your account for up to two months and looked like your money, and the return is the day you have to hand it over. Deal with it earlier: set the GST portion aside when each invoice is paid. The return then becomes a routine transfer.

How Coffer helps

Coffer tracks the GST on every invoice as it's paid and ringfences it on your dashboard, so through the whole period you can see the exact GST amount accumulating toward the next return, alongside the due date counting down. When you file and pay, you log the payment and the ringfence resets for the new period. GST in Coffer covers the workflow.