End of Year Tax Checklist
As 1 April marks the start of the new tax year for most businesses, March presents a valuable opportunity to optimise tax positions and manage cash surpluses. Here are key areas to review before the tax year ends:
Key Considerations for Year-End
Bad Debts
- Write off bad debts in your debtors’ ledger before balance date to claim a deduction.
- Keep records showing reasonable recovery efforts before the write-off.
Employee Expenses
Deductions are available for certain employee-related expenses if committed to before year-end and paid within 63 days of balance date. These may include:
- Holiday pay
- Redundancy payments
- Long service leave
Staff Reimbursements and Allowances
Maintain comprehensive records of reimbursements and allowances paid to employees for work-related expenses.
Prepaid Expenses
Consider prepaying expenses before 31 March to claim deductions where applicable. Potentially deductible expenses include:
- Stationery
- Postage
- Courier charges
Some prepaid expenses have claimable limits (e.g., rent, insurance, equipment contracts, travel, and accommodation). Check with us for specific guidance.
Fixed Assets
- Review your fixed asset schedule to determine if any assets can be written off.
- Identify assets no longer in use.
Additional Important Factors
- Complete any planned repairs and maintenance before year-end to claim deductions this financial year.
- Dispose of obsolete stock or write it down to its net realisable value.
- Update vehicle logbooks (required every three years).
- Review credit notes issued post-balance date for sales recorded in the 2025 financial year.
- Examine contract terms for retention amounts:
- Ensure amounts payable in the 2025 financial year are included in assessable income.
- Identify retentions invoiced but not receivable until the next tax year.
Get in Touch
Taking proactive steps now will help ensure compliance and optimise your tax position. If you have any questions or need clarification on any of these points, reach out to us for guidance.
