Year End

How Time Flies!

31 March represents tax year end for the majority of taxpayers. So as we settle back to reality after the Xmas break, it is worth considering tidying up the books in anticipation of financial year end:

  • Stock take
    IRD requires that stock on hand (excluding livestock) must be valued at the lower of cost or market value. Don’t forget to do a physical stock take to ensure obsolete stock is physically disposed of or written down AND check the accuracy of your computerised records.
  • Work in progress
    If you have started work on a job but haven't charged the client as at 31 March 2017 then IRD requires you to account for this (materials, labour at cost and an overhead component).
  • Bad debts
    To claim a deduction for bad debts you need to physically write off the bad debt in your debtors ledger prior to 31 March (after reasonable steps have been taken to recover them).
  • Fixed assets
    Assets which have been scrapped, or are no longer able to be used can be written off for tax purposes.
  • Holiday pay
    Amounts owing for holiday pay can be claimed if they are paid within 63 days of balance date (i.e. holiday pay paid between 1 April 2017 and 2 June 2017 can be claimed for tax purposes). A great time to review how much you owe your staff and encourage them to use up leave.
  • Prepayments
    Some expenses can be prepaid and claimed as a tax deduction in the year to 31 March, regardless of the amount (postage and stationery, vehicle registration, rates, subscriptions) while other expenses have limits (rent, consumables, insurances, travel).
  • Home Office and Donations
    Make sure you have all the information necessary to enable your accountant to make a claim.

Some of these areas can be “a bit grey” so if you are unsure please call us!

Now is also the perfect time to:

  • prepare your 2017/18 budget/cashflow forecasts
  • review your current accounting system and management report process.

Start the 2018 financial year with a plan!