Get ready for End of Financial Year!
Date: 6th March 2017
With 31st March looming, it’s time to start thinking about getting your accounts ready to hand over to your accountant so here’s a handy End of Financial Year Checklist to help you get started. Work through the points below to straighten things up and be sure to talk to us if you need help along the way.
- Contracts – have you invoiced retentions that are not due and payable for another year? If they are payable in the 2016/17 year they need to be declared as income but if not, the income will be deferred to a subsequent year.
- Credit notes – issued to customers after 31 March may be applied to the previous year, potentially reducing the current year’s taxable income.
- Debtors – have you taken reasonable steps to recover bad debts? If so, and you write them off before 31 March, you may be able to claim a deduction.
- Discounts for prompt payment – if you maintain a discount reserve, it is deductible. In the first year a deduction for the actual discount percentage is allowed. In subsequent years, the amount is calculated as a percentage. Different rules apply if credit extended to customers exceeds 93 days.
- Dividends and imputation credits – consider reviewing planned dividend payments. The imputation credit account must not have a debit balance at 31 March otherwise penalties may arise.
- Employee expenses – amounts owing for holiday pay, bonuses, redundancy payments, long service leave etc. can be claimed, if you have committed to them at year end and they’re paid within 63 days.
- Fixed assets – do you have any that you are no longer using or don’t intend to use in future? If so, the book value may be able to be written off.
- Loss offset elections and subvention payments – talk to us if you think the company will make a loss.
- Stock – dispose of obsolete trading stock by 31 March or write it down to net realisable value (lesser of cost or market value). If the stock is worth less than $10,000 and your turnover is less than $1.3m for the year, you won’t need to include your stock movement for tax purposes.
- 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.
Xero EOY processing
Once you satisfied on the above checklist, you can run through Xero’s simple end of year process or hand over to us.
Get in touch
As always, please contact us if you need help at any stage.
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