Offering a cash discount to a client or doing a job for a mate might have left you flush with cold hard cash, but do you actually need to declare it? The answer is yes. Some tradies think that a little bit here and there won’t matter, but it’s better to get it all straightened out rather than having it come back to bite you later.
Can cash jobs actually be tracked?
The IRD sees more than you think, and you don’t want to be the one letting the team down by not contributing your fair share.
When you buy supplies without a corresponding declared job, the IRD can see this and it’ll raise suspicions.
And if you’re working together with another tradie who declares the job in their taxes and you don’t, you could end up in a sticky situation.
Undeclared tax could have more negative consequences than you think. Your financial statements can appear to be less than they should be, which could have the bank asking questions if you ever need to get a loan. You could also receive tax penalties or a criminal conviction, which is not ideal.
I have undeclared cash jobs – can I fix this?
It’s never too late to get everything up to scratch. If you need a hand, our mates over at Haven Accounting can put you right. It’s better to be safe than sorry, and by making a full voluntary disclosure to the IRD, you may have your penalties reduced by up to 100%. You’ll also keep up your good business reputation and avoid any court formalities.
Should I stop accepting cashies?
Accepting cash jobs isn’t a problem as long as you’re declaring them at the end of the day. You’ll just need to keep a record of the amount you received in your books and declare it as income as part of your annual tax return.
What are my tax obligations?
If you own a tradie business and want to make sure you’re getting everything right, make sure that you:
- Record every job, no matter how big or small
- Declare ALL of your income when you complete your tax return
- Register as an employer if you have staff
- Register for GST if you’re earning more than $60,000 a year
- Charge GST if you’re already registered