With the end of the financial year fast approaching, there are a few things you may want to check to keep your bases covered. We’ve put together an end of financial year checklist so you can get yourself ready.
Understand your Government payments
If you received any resurgence payments, remember that they include GST, so ensure that you have returned GST on these. The government may review your eligibility to have claimed any subsidies, so make sure you have the support for your claim readily available in case they ask.
If you receive shareholder salaries or are a self-employed person, any wage subsidy received needs to be included in your IR3 (personal tax return) in the government subsidy box.
Look at your imputation credit balance
If your imputation credit balance is in debit on 31 March 2022, you’ll be charged an imputation penalty tax and will need to pay further income tax. It’s an easy fix – get in touch with us today for assistance on how to clear any imputation account debits.
Check your accounts receivable for bad debts
In order to receive the tax deduction, the bad debt must actually have been written off by 31 March 2022. A thorough review of accounts receivable balances must be done to determine which of these are no longer likely to be collected. These can then be written off as a bad debt.
Review your assets
Review your fixed asset register to see if there are assets you no longer have. This could be assets that have broken, died or been sold. You can write these off in the 2022 accounts. If a loss on disposal was made, then a deduction can be taken, or any depreciation recovered will be income. If an asset purchased during the year was less than $1,000 this can be expensed immediately
Think about making a donation
If you’ve been thinking about making a donation but haven’t done so yet, making one before March 2022 is a good idea. If you make a donation before this time, the rebate can be claimed soon after 31 March. If you wait until after this date, you will need to claim the rebate the following year. You have four years to claim a donation, so if you have made any in the last four years, you can claim the rebates.
Check your accruals and expenses
If you have committed to an expense then it is deductible in the 31 March 2022 accounts. You can accrue it and pay it in April or May, but still take the tax deduction in March. The one exception to this is employee expenses such as bonuses – these must not only be incurred but paid within 63 days of the balance date.
Have a look at trading stock
There are two options to value stock, the lower of cost or market selling value. Where the market selling value is lower than the cost it is beneficial to revalue the stock at balance date to this value. You’ll need evidence at the market value of the stock at 31 March 2022.
If you want help with getting things sorted for the end of the tax year, don’t hesitate to contact the Haven team on 0800 700 699, we would love to help you out.