As the end of the financial year approaches, we thought we'd prepare you a handy checklist of things you can do to help your year-end run smoothly.
FIXED ASSETS REVIEW
Identify potential write-off's for fixed assets that are no longer in use or were sold or damaged. Doing this will provide an opportunity to tidy up your fixed assets schedule and also reduce your tax liability.
Bad debts must be written off before the end of financial year in order to ensure that you get tax deductibility. If you did everything you could to get paid for some of your accounts receivable, but you are not likely to be paid, now is the time to speak to us about what steps to take to ensure you receive a deduction in the current year.
Holiday pay and bonus accruals must be paid within 63 days of the balance date to ensure they are tax deductible.
Closing stock calculations are always important to do at the end of the financial year, as they can have a significant impact on your tax position.
This is applicable to businesses where the shareholders take drawings on a regular basis and the current accounts could be overdrawn closer to the end of the financial year. It is important to be proactive here as there is a resident withholding tax that has to be paid on the 20th of April if the dividend is declared in March.
By pre-paying tax deductible expenses before March 31, you will be able to minimise your tax bill. Some categories of business expenses can be pre-paid without any limitations, meaning that you can claim as much as you like. Examples include stationery, vehicle registration, accounting and auditing fees and postal charges. Some other expense categories have limits on the amount that can be claimed as a prepayment (eg insurance).
WORK IN PROGRESS (WIP)
At 31 March you need to assess all your jobs in progress, to establish percentage of completion, income received to date, and costs incurred to date, and expected project profit. We can then use this information to ensure your year-end cut-off is accurate.
Click here to download the checklist.
Please contact us if you have any questions about preparing for the end of the financial year.