Step-by-Step Guide: 10 Smart Tax Moves for the New Financial Year

Starting the new financial year with a clean financial structure can make all the difference. Amanda Quill’s first recommendation is to sort your bank accounts properly. For business owners, property investors, and even dedicated savers, having separate accounts for different purposes is essential. This means one for operations, one for tax, and one for savings or investments. Keeping personal and business transactions separate helps reduce risk—particularly the risk of accidentally spending money that should be put aside for tax. Poor structuring can lead to tough conversations come tax time when there’s nothing left in the account.

There’s a common myth that spending money at the end of the financial year is a smart way to reduce tax, but Amanda cautions against this. While purchasing useful tools like software or subscriptions that boost efficiency is a legitimate deduction, splurging on things like a car just to lower your tax bill doesn’t make long-term financial sense. Spending for the sake of spending—without real business benefit—can lead to waste and doesn’t always provide the tax relief people expect.

When managing multiple investment properties, people often ask whether they need a separate bank account for each one. Amanda says it depends on ownership structure and your accounting setup. If you’re using software like Xero, you can track property-specific income and expenses through tags or tracking categories, all within a single account. This gives you clean reporting without the hassle of multiple bank accounts—provided you’re diligent about coding transactions correctly.

Many business owners forget to set aside money for tax until it’s too late. Amanda recommends creating a separate tax bank account and treating tax savings like a non-negotiable expense. For example, every time you receive revenue, put a percentage into this account to cover GST or income tax. This is particularly important for businesses registered for GST who get paid but immediately spend the income, not accounting for tax obligations that arise months later. It’s a simple practice that prevents a financial crunch when tax payments are due.

The golden rule of tax deductibility is whether an expense helps you generate revenue. Amanda explains that typical business costs like rent, wages, or office supplies are clearly deductible. Others—like Friday drinks—may be partially deductible under entertainment rules. And then there are more questionable items like business boats, which fall under “mixed-use asset” rules and must be split between private and business use. Just because something’s a business expense doesn’t mean it’s always tax deductible.

Not every business-related cost qualifies for a deduction. Amanda outlines two main limitations: capital and private. Capital expenses—like buying a building—are not deductible, even though they are for business use. Private expenses, such as holidays, don’t qualify either. Employees working from home can’t claim home office deductions under current NZ tax law, though business owners using part of their home for work can claim a proportional amount of related costs. It all comes down to intent and use.

Assets under $1,000 are an exception to standard depreciation rules. If you purchase something like a phone or laptop for under that threshold, you can deduct the full amount in the year of purchase. Anything more expensive needs to be depreciated over time. Amanda clarifies that depreciation is calculated monthly from the time of acquisition. If you buy a laptop in February, for instance, you can only claim two months of depreciation in that financial year, with the balance carried forward.

If you owe more than $5,000 in income tax after your return, you’ll enter the world of provisional tax. Amanda explains that the standard method for calculating provisional tax is the “standard uplift”—a 5% increase on your previous year’s bill. But if you know business is slowing down, you can opt for the estimation method instead. Another tool is tax pooling intermediaries, like Tax Traders, where you can make flexible payments, reduce penalties, and even earn interest if you’ve overpaid. It’s all about planning, not guessing.

GST obligations often trip up business owners, especially those who are newly registered or running short-term accommodation like Airbnb. Amanda reminds us that from 1 April 2024, new rules apply to the accommodation chain, meaning this is the first year that Airbnb operators may see real changes in how they report and claim GST. If you’re registered, you must account for GST properly; if you’re not, you may still receive credits under the new scheme. Either way, it’s important to stay informed.

Amanda says there’s a clear connection between tidy financials and business success. The more organized you are—regular coding, timely invoicing, clean records—the easier it is to understand your business performance and make strategic decisions. In contrast, if you’re behind on filing and scrambling to pay last year’s taxes, you’ll always feel like you’re playing catch-up. About 50–60% of clients keep things properly up to date, so just being on top of your finances already puts you ahead of the curve.

• Separate your bank accounts for clarity and tax preparation.
• Don’t spend at the end of the year unless it’s truly necessary.
• Use software tracking instead of multiple property bank accounts.
• Always set money aside for tax—treat it like a fixed cost.
• You can only deduct expenses that relate to generating revenue.
• Capital and personal costs don’t qualify—know the rules.
• Instantly deduct assets under $1,000; depreciate the rest.
• Use tax pooling or estimation methods if provisional tax is too high.
• Stay up to date on GST rules, especially for Airbnb income.
• Financial tidiness equals business clarity and long-term advantage.

Ready to take the stress out of the new financial year? The team at Lighthouse Financial can help you stay compliant, maximise your deductions, and plan ahead with confidence. Book a quick chat with us today and get your year off to a smart start.

If you’d like to learn more, check out these other episodes below.