11. Taxes and Filing in Tip Top Shape
GST, returns and receipts tidy enough to make your accountant proud.
Problem Statement
Plenty of owners treat tax as something to survive rather than a part of making the business sale ready. GST gets filed at the last minute, receipts live in shoeboxes or email folders, coding is sometimes creative and letters from Inland Revenue sit in a pile for later. The business keeps trading although the tax trail is messy. When a buyer appears they see risk, not reassurance.
What An Owner Might Say
“I know the tax is up to date, I just hope no one ever asks us to explain how we got there.”
“Our accountant says we are fine with IRD. I had not realised that a buyer would look at the way we handle GST and returns as a trust issue.”
Why It Happens
Tax feels like a cost, not an asset. Most owners see it as money out the door rather than part of the value story. The goal becomes staying roughly compliant with as little time and pain as possible. Over time shortcuts become habits and nobody questions whether the way you handle GST and income tax would stand up to real scrutiny from a buyer.
Small teams juggle many moving parts. One person looks after payroll, another presses the GST file button, the accountant sorts year end returns. Everyone assumes someone else is watching the full picture. Unless there has been a crisis with IRD, tax rarely appears on the strategic agenda.
There can also be a quiet fear of what a deeper look might show. Owners worry about past choices around personal expenses, late filings or arrangements that were clever at the time and now feel a bit awkward. It feels easier to hope the past stays blurry. Buyers prefer sharp focus.
What To Do About It
Begin with a simple question. If you were buying your own business, would you feel comfortable that GST, income tax, PAYE and other filings had been done accurately and on time for several years. If the honest answer is maybe, treat that as your signal to lift the standard.
Sit down with your accountant for a tax health check that is explicitly about exit readiness. Ask them to review lodgement history, payment patterns, any instalment arrangements and any positions that might raise questions. The goal is not to scare you. The goal is to surface issues early while there is still time to fix or at least explain them.
Clean up record keeping. Move receipts and invoices into a consistent digital system rather than a mix of apps, email and paper. Make sure each expense is coded correctly so that GST claims are clearly supported. If in doubt, err on the conservative side. A buyer will respect a business that chose clarity over aggressive claims.
Clarify how owner related items are treated. Separate drawings, shareholder current accounts, personal use adjustments and private expenses that have slipped into business coding. You do not need to erase history. You do need to show that you understand which parts are business and which are lifestyle. That helps both your adviser and a future buyer build a clean normalised profit picture.
How To Keep The Momentum
Good tax behaviour is a rhythm, not a one off clean up. Put key tax dates into a shared calendar where you and at least one other trusted person can see them. Treat on time filing and payment as a non negotiable standard, not a nice to have. If cash pressure makes a deadline difficult, talk early with your accountant so you can agree a plan rather than lurch into penalties.
Review tax reports regularly, not just at year end. When you sign GST returns or annual accounts, insist on a short plain English walkthrough. Ask what the numbers are telling you about margins, trends and any unusual items. Over time you will feel more relaxed with the language, which makes you a stronger voice in front of buyers.
Document key decisions. If you and your accountant agree on a particular treatment for an unusual transaction, keep a short note with the working papers. Future you will be grateful when a buyer’s adviser asks why something was handled that way. Clear notes say this business is run by people who expect to be asked grown up questions.
As your exit window gets closer, ask your accountant to prepare a simple pack that summarises tax compliance for the last three to five years. That might include confirmations of filing, any past issues that were resolved and a short statement about current status. You do not have to hand this over on day one. You can have it ready for due diligence so questions are answered quickly and calmly.
Golden Nugget
“Tax tidy does not mean you loved every payment. It means you can show a buyer that nothing important is hiding in the shadows.”
How RegenerationHQ can help
RegenerationHQ helps owners see tax not just as a cost, but as part of the story that builds buyer confidence. We sit with you and your accountant to translate technical reports into clear language, then highlight the areas that matter most for an exit. That might include cleaning up coding, tightening GST habits or front footing any historic issues before a buyer uncovers them.
Together we design simple routines that keep filings current, records organised and explanations ready. We pay attention to how tax behaviour fits into the wider financial picture so that your accounts, cashflow forecasts and data room all tell the same steady story.
Our focus is practical and human. We know that many owners carry quiet anxiety about past decisions. Rather than judge, we help you deal with what is real now, so you can walk into sale conversations with your head up. When GST, returns and receipts are in genuine tip top shape, your accountant will be proud, IRD will be calm and serious buyers will feel far more comfortable putting real money on the table.
If you want a steady guide beside you while you get ready for one of the biggest decisions of your working life, RegenerationHQ is ready to help you walk that road with clarity and confidence.