Key Tax Matters to Review Now

With the 31 March balance date approaching, now is the time for most business clients (and some of our farmers) to review their tax position and address any matters that need to be actioned before year-end. Early planning can help manage tax cash flow and avoid surprises. We’ll be in touch directly with our clients to request completion of their end-of-year checklist document that provides valuable information required to prepare the annual financial statements.

Expected profit and tax exposure

It’s useful if clients have a clear sense of how this year’s profit is tracking. If results are stronger or weaker than expected, there may be implications for income tax, provisional tax, and cash flow that should be considered before 31 March.

Asset purchases and depreciation

If you’re planning to purchase business assets such as vehicles or equipment, timing is critical. To claim depreciation this year, assets must generally be purchased and available for use before 31 March. Remember that asset purchases just before balance date provide minimal tax benefit, as depreciation is calculated based on the number of months the assets is owned.

Bad debts and income recognition

Review outstanding debtors and follow up overdue accounts. Genuinely bad debts may be deductible if they are written off before balance date. Ensure all income earned to 31 March is correctly recorded.

Stock on hand

If your business holds stock, ensure stock levels and values at 31 March are accurate. Obsolete or slow-moving stock should be identified, as overstated stock can increase taxable income unnecessarily. Trading stock at balance date should be valued at cost price and excluding GST. Farmers, we need you to provide details of the numbers of animals owned by you at balance date.

Records and GST

Ensure bank accounts are reconciled in your accounting system, GST returns are up to date, and transactions are correctly coded before year-end. Good records support accurate tax reporting and reduce compliance costs.

Provisional tax looking ahead

Your 31 March result will influence future provisional tax obligations. Understanding this early helps with cash flow planning for the year ahead.

Final word

Tax planning before 31 March is far more effective than trying to fix things after the fact. If you’d like help reviewing your position or discussing actions to take before balance date, we recommend getting in touch sooner rather than later.