Think About: Deductions

Bad Debts: Write bad debts off in your debtor ledger before balance date so you can claim a deduction. Make sure your records show you have taken reasonable steps to recover the debt prior to write-off. Note the details so we can check the GST adjustments.

Employee expenses: You can claim deductions for holiday pay, bonuses, redundancy payments, long service leave etc., if you commit to them before year end and pay them within 63 days of balance date. Check holiday pay has been calculated correctly.

Expenses: Can you pre-pay expenses such as stationery, postage and courier charges before 31 March? You may be able to claim for them. Check with us. There are limits to how far some prepaid expenses are claimable, such as on rent, insurance, plant and equipment maintenance contracts, travel and accommodation.

Fixed assets: Are you still using all of them? Can some be written off?

Discounts: If you offer prompt payment discounts to debtors and maintain a discount reserve, this may be deductible. Make sure your records are clear. In the first year a deduction of the actual discount percentage is allowed. In subsequent years, the deduction is calculated as an approved percentage. Different rules apply if the credit period offered to customers is more than 93 days.

Repairs/Maintenance: Complete planned maintenance or repairs before year end for a tax deduction. Ask us if you aren’t sure whether the expenditure is classified as repairs and maintenance (which would be deductible) or as a capital expense (which wouldn’t).

Stocktake: 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 turnover for the year less than $1.3m, you won’t need to include your stock movement for tax purposes.

Vehicles: Don’t forget to note your odometer reading at year end. If you keep logbooks noting business and personal use, mileage and costs, ensure these are all in order.
 

Think About: Income

Credit Notes: Look for credit notes issued to customers after balance date but related to sales made prior to balance date. Note these so you can reduce your taxable income for the current year.

Increased Income: Is this year’s income a lot higher than last year’s? If so let us know. It might be a good idea to consider making a voluntary provisional tax payment.

Losses: Did your group of companies have losses in 2016? Groups of companies may offset profits and losses against each other if you make loss offset elections and subvention payments by 31 March. We can help you with this.

Retentions: Check contracts for the terms on retentions owing. Have you invoiced retentions but they are not payable till work is complete in a subsequent tax year? They won’t count as assessable income for this year. However, If they are payable this year they are assessable income. Note retentions you have invoiced which are not receivable till the next tax year.
 

Think About: Penalties

Dividends: Review planned dividend payments. Your imputation credit account must be in credit at 31 March or penalties arise. Contact us before 31 March so we can help you.
 

The post Get Ready, Get Set – End Of Year Checklist appeared first on Accounting North.

1. Don’t assume the current way is the right way.  Challenge long standing processes that are currently used within your business and promote evolution of new systems and ideas for your business.  Be as innovative as you like. 
2. Ask the questions – what are you doing and why?  Don’t stray from your original mission unless it’s clear the new route will be beneficial.  Always align your tasks with your goals but make sure you assess these regularly so you know what you’re doing and why.  It’s a form of tracking.
3. The first solution may not be the most effective.  Hurrah you found one!  But don’t stop there.  Refine it to ensure it’s the best solution, test it, put it to use and then adapt it as necessary.
4. Meet new people in new industries.  It’s amazing what happens beyond your bubble.  Open yourself for new viewpoints and creative avenues that could relate to your business.  Find out about business networking evenings in your area and go along.  Take team members that you think might be interested in what’s being presented; you may be surprised at what you learn about other industries.
5. Inspire the team with real business success stories.  Encourage them to learn and relate.  Invite guest speakers to team meetings or watch inspirational clips together on YouTube.
6. You can’t learn less.  Regularly research new ideas or possibilities.  You never know what will trigger a fantastic idea.  Most of this can be done online through social media, but encourage brainstorming and team input on project or product business possibilities.
7. Don’t bury issues – celebrate them.   Make problem solving fun and have the team break from their daily tasks to brainstorm.  You could learn a lot from their fresh perspectives, and they’ll enjoy being a part of the decision making process.
8. Your employees are your first/most important customer.  Treat them with the necessary respect and value their opinions!

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Previously expenses have been subject to a private to business ratio (including when the asset was available for use even if it wasn’t being used).  The new rules restrict the deductibility of this expenditure by limiting the expenditure allowed for the period that the asset is available for use and not used.

Even though these rules have just been enacted, they actually apply from 1 April 2013.  If you own any assets such as a holiday bach or a boat and rent these out during the year, please come and talk to us.  The government has publicly stated they are expecting an extra $50m in revenue from these new rules, so they will be enforced.

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