Money arriving in the business account is not always a sale. Topping up from savings, a loan, a customer who paid the wrong account, or paying the business back for something private: what each one means for tax and GST in New Zealand.
Checked against IRD guidance on 2026-10-11
You have lent money to your company. It goes to your shareholder current account — the running record of what you have put in and taken out.
Income tax: No tax for the company, and none for you when the company pays it back: it is your own money returning. Keep the account in credit — if you draw out more than you put in, the company is lending to you, and interest, FBT or dividend rules can apply.
GST: No GST. Nothing was sold.
What to do: Record it against the shareholder current account, not as sales. Recording it as income is the common mistake — it adds tax and GST you do not owe.
Categorise it as Funds Introduced or Shareholder Loan and it stays out of sales and GST. The shareholder current account report is built from those entries automatically.
As a sole trader you and the business are the same taxpayer, so moving your own money across is just capital you have put in.
Income tax: No tax. You are taxed on the profit the business makes, not on money you move into it.
GST: No GST. Nothing was sold.
What to do: Record it as funds introduced, not as sales, and keep a note of where it came from in case you are ever asked why a deposit is not in your income.
Categorise it as Funds Introduced and it stays out of both your profit and your GST return.
It is a sale. Which account the customer happened to pay does not change what the money is.
Income tax: It is business income, the same as if it had landed in the business account.
GST: If you are GST-registered, GST is due on it — in the period the sale belongs to under your accounting basis, not the day you moved the money.
What to do: Record the sale against the customer or invoice. The transfer from your personal account is then just the money arriving, not a second sale.
Categorise the deposit as income and it is counted once, with its GST worked into the return for that period.
Borrowed money is a debt the business owes, not something it earned.
Income tax: No tax on the money received. The repayments are not an expense either — only the interest may be, where the borrowing is for the business.
GST: No GST on the loan or on the repayments.
What to do: Record it as a loan, keep the agreement (even a short written one with family), and split each repayment into principal and interest.
Worth asking an accountant: Interest-free or informal loans from family, and loans that pass through your own account on the way to a company, are worth getting set up correctly at the start.
Categorise it as a loan rather than income — a loan from a shareholder goes under Shareholder Loan - Advance — so it stays out of sales and GST.
You are settling up. The private purchase was money taken out of the business; paying it back cancels that out.
Income tax: No tax on the repayment. The original purchase was never deductible — a private cost stays private even when the business card paid for it.
GST: No GST on the repayment, and no GST claim on the original private purchase.
What to do: Record the original purchase as drawings and the repayment against the same account, so the two net to nothing.
Categorise the purchase as Personal Drawings and the repayment as Funds Introduced. Neither touches your profit or your GST return.