‘You must pay taxes. But there’s no law that says you gotta leave a tip.’ Morgan Stanley
Make sure everything is squared away for the end of the tax year:
Have you invoiced retention’s that are not payable till the next tax year? If they are payable in the current year they are taxable as income. If not, they will be taxable in the year you are legally entitled to receive them. Make sure you make a note to tell us.
Amounts owing to employees for holiday pay, bonuses, redundancy payments, long service leave etc. can be claimed, if you have committed to them at year end and pay them within 63 days of balance date. Check holiday pay has been calculated correctly.
Look out for any credit notes issued to customers after balance date. You may be able to apply them to this tax year, potentially reducing your taxable income for the current year.
Can you pre-pay any expenses before 31 March, such as stationery, postage and courier charges? You may be able to claim for them. Check with us as some types of expenses have limits on the extent to which they are claimable if prepaid, such as rent, insurance, travel and accommodation.
Review your debtors. Did you take reasonable steps to recover bad debts? If so, make sure your records show this. If you write off bad debts before 31 March, you may be able to claim a deduction. Make sure to give us the details so we can check any GST adjustments are correct.
Review your fixed assets. Are you still using all of them or can some be written off?
Repairs and maintenance.
Undertake planned maintenance or repairs before year end to ensure a tax deduction. Deciding whether expenditure on an asset is classified as repairs and maintenance (which would be deductible) or as a capital expense is not always clear. Contact us if you aren’t sure.
Do a stock take. Dispose of obsolete stock by year end or write it down to its net realisable value (the lesser of cost or market value). If your stock is worth less than $10,000 and your turnover is less than $1.3m for the year, you won’t need to include your stock movement for tax purposes.
Legacy Chartered Accountants has offices in Whakatane and Tauranga.