16/08/2026
🔴 **THE TAX MONEY WAS NEVER YOURS**
One of the things I see far too often when working with small-business owners is difficulty keeping up with payments to IRD.
And interestingly, it’s not always because the business isn’t making enough money.
Sometimes the business is profitable. The cash is coming in. The owners are working hard and the business is growing.
Yet when the tax bill arrives, there simply isn’t enough money sitting in the bank to pay it.
🔴 **WHY?**
Because tax has been treated as an afterthought rather than as a business expense.
There is a simple principle every business owner needs to understand:
👉 **Not every dollar that comes into your business belongs to you.**
If your business is profitable, a portion of that profit will ultimately need to go towards income tax. Depending on your circumstances, you may need to put aside a significant proportion of your profit — and that is before we even consider GST.
GST is an even simpler concept.
If you collect GST from your customers, you are effectively collecting money on behalf of the Crown.
**It is not additional business income.**
Yet it can be very tempting to look at the bank balance and think:
💭 *“We have $80,000 sitting there, so we have $80,000 available to spend.”*
**You don't.**
Part of that money may already have someone else's name on it.
🔴 **THE SOLUTION IS SURPRISINGLY SIMPLE**
Tax should be budgeted for in the same way you budget for wages, rent, vehicles, advertising and other business expenses.
Don't wait for the accountant to tell you what you owe after the money has already been spent.
Instead, make tax provisions part of your normal cash-flow management.
For example, every time money comes into the business, consider what portion needs to be set aside for GST and income tax.
Keep it somewhere separate if necessary.
The objective is simple:
👉 **When the IRD payment falls due, the money is already there.**
🔴 **YOUR ACCOUNTANT CAN HELP — BUT YOU NEED TO KNOW YOUR NUMBERS**
Your accountant can play an enormous role in helping you understand what needs to be set aside and when payments are likely to fall due.
But ultimately, the business owner needs to understand the numbers well enough to make good decisions between those conversations.
**Your bank balance is not the same thing as your available cash.**
And perhaps one of the most important financial disciplines for any business owner is learning to distinguish between the two.
🔴 **GOOD BUSINESSES CAN STILL GET INTO TROUBLE**
Good businesses can get into trouble through poor tax planning.
Good cash flow can disappear very quickly when tax obligations haven't been accounted for.
So if you're a business owner, I encourage you to ask yourself:
💭 **“If my tax obligations fell due today, would I have the money set aside to pay them?”**
If the answer is no, don't wait until the next IRD bill arrives.
Have the conversation with your accountant now.
Understand your upcoming obligations.
Start treating tax as a regular part of running your business.
🔴 **THE BEST TIME TO PREPARE FOR A TAX BILL IS BEFORE YOU RECEIVE IT.**
