How frequently do you pay your business’ GST? What are the pros and cons of annual versus more frequent payments?
I started out doing my GST return every 2 months. But with my current turnover, that became a bit silly as the numbers didn’t justify it. I now do it 6-monthly which fits in better. As I get busier I’ll need to revisit that as I don’t want to be writing huge cheques to IRD.
There are definite advantages to paying your GST more regularly, such as paying smaller sums over the course of the year rather than one lump sum. Though this may only be worthwhile if you have a high turnover of trade.
You’ll essentially be breaking up your paperwork into smaller, more manageable amounts - and will be up-to-date more frequently which may help you manage your cash flow better.
GST taxable period options for businesses with turnover to $500k are monthly, bi-monthly and six-monthly. From $500k to $24 million the option is bi-monthly and monthly. Over $24 million the only option is monthly.