Where's the money?

This video explains the difference between operating expenses and capital expenses, how each one affects your tax, your profit and your cash, and why a healthy profit doesn't always mean a healthy bank balance.

We cover everyday operating expenses (which are tax deductible), capital expenses like vehicles, equipment and buildings (which aren't deductible when you buy them), the difference between a repair and an improvement, depreciation, the low-value asset rule and Investment Boost.

Then we work through a simple example with a $100,000 profit, and finish with four ways to stay cash flow positive. The example leaves out depreciation and GST to keep it simple. Investment Boost applies to new assets (or assets new to New Zealand) bought on or after 22 May 2025, and can include new commercial and industrial buildings, but not residential buildings or second-hand assets bought in New Zealand.