Café and Restaurant Tax Minimisation Guide FY2025
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Minimize Tax Payments by Maximizing Deductions
Tax deductions – expenses you can claim against the amount you owe – are the single best way to lower your overall tax bill. Here are some of the tax write-offs all restaurants should know about:
Claim Home Office Expenses
If you work from home, no mater if it is a garage or a separated room to run your business, you may take expenses that related to business operation into your business. Expenses like, mortgage, insurance, rent or power can be put into business based on the area you used for your business.
Business Use of a Vehicle
Mileage, maintenance, fuel, insurance, parking, and other costs associated with a car or truck used for business purposes can also be written off.
Shareholder Salary
Instead of add shareholder to your payroll, we recommend business owners pay themselves by shareholder salary. It will lower your payroll expenses and also avoid of the risk of tax overpay.
Low value asset
The threshold for low value asset is still at cost less than $1000(GST exclusive).
You could claim an immediate tax deduction for assets costing less than $1000,
instead of book under fix asset and claiming depreciation over the following years.
Depreciation
A fancy way of saying that you can claim some or all of the costs of major purchases, like ovens and other large pieces of kitchen equipment. (Some of these costs may require you to claim certain percentages per year over a set amount of time.)
Pay Something, Pay Late, But Don't Skip Filing
The IRD is not a generous lender, and restaurants face enough scrutiny as it is. To avoid IRD penalty and use of money interest (10%), rather than paying late or missing payments, apply for an instalment arrangement or at least maker and effort to pay something.
Or use tax pooling intermediaries like TMNZ to manage your tax payment. In other words, if you have a cash flow problem, reach out and establish some form of communication.
Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact The Number Studio office.