1. Contracts
Have you invoiced retentions that don’t need to be paid until next year? If they are payable this tax year, they will be classed as taxable income for 2023-24. Unsure? Talk to us as your tax adviser.
2. Employee expenses and holiday pay
Holiday pay, bonuses, redundancy payments, and long service leave owed to employees can be claimed this year if you have committed to them at year-end and pay them within 63 days of the balance date.
Also, ensure holiday pay has been calculated correctly to avoid time-consuming revisions once the tax year is over. Find more information here or visit the Employment NZ website.
3. Credit notes
Take stock of credit notes issued to customers after the balance date. You may be able to apply them to the current tax year and reduce your taxable income.
4. Expenses
Find out if you can prepay expenses before March 31 for items such as stationery, postage, and courier charges to claim deductions sooner.
5. Debtors
Before the end of March, review your debtors and make a list of any outstanding bad debts. Ensure your records show you’ve taken reasonable steps to recover bad debts. Bad debts written off before March 31 can often be claimed as a deduction.
6. Fixed assets
If you’re not using some of your assets, you may be able to write them off.
7. Tax losses (carryforward, offsets and subvention payments)
Set to make a loss in the current financial year or have tax losses from prior years? Talk to us as soon as possible about carryforwards, loss offset elections and subvention payments.
8. Discounts for prompt payment
If you’ve offered prompt payment discounts over the tax year and maintain a discount reserve, this might be deductible. Make sure you keep clear records about any discounts.
9. Repairs and maintenance
Thinking about doing repairs or maintenance? Get it done before the year-end to ensure you get your deductions sooner. Consider software development and improvement costs as part of this.
10. Dividends and imputation credits
Review your dividend payments for the year by March 31. Imputation credit accounts mustn’t have a debit at the year-end, or you could be hit with penalties.
Also, review deemed dividends (for example, overdrawn shareholder current accounts with no interest charged).
11. Stock
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 $1.3 million for the year, you won’t need to include stock movements for tax purposes.
12. FBT
Review all FBT items. Have you taken account of possible exemptions? The FBT March quarter return is the year’s last quarterly return and will most likely require a wash-up calculation.