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Well what a financial year it has been and for most of you, the EOFY (end of the financial year) is happening in 8 days time …

So congratulations on making it to the end and here are some tips before we cross the “magic” date of 31 March to possibly save some tax:

Minimum Wage increase – from 1 April, the minimum wage increases from $18.90 to $20.00. Click here to read our previous blog.
Here is a link to other resources from Employsure.

Stock – if you have stock you will need to conduct a stock-take on 31 March and this needs to be recorded. However the value that you use per item may reduce your tax. The values that you can use are the lower of cost price or market value (excl GST if GST registered), with market value needing to be substantiated by evidence if used. And just to clarify different valuation methods can be used for different stock items. Also any obsolete stock needs to be physically disposed of before 31 March. If you can reasonably estimate that your stock on hand is below $10,000 at 31 March, you do not need to do a stock take. However we recommend that you actual do a stocktake as best practice.

Work in Progress – for those of you that in a service industry or in a trade, you are likely to have work (or jobs) in progress at 31 March. This needs to be valued and accounted for if, and only if, you have the right to invoice the customer at 31 March. To put a value on this, all the inputs are valued at cost (excl GST if GST registered) and would include labour and materials. Any questions around this please contact us

Bad Debts – in order to claim a bad debt, it needs to be physically written off and evidence that it is not being pursued by 31 March. So if you use an accounting system, the debt needs to be credited out of the system dated 31 March or prior.

Repairs & Maintenance – if you have any repairs that you are going to undertake in the next couple of months, see if you can get it done before 31 March and claim the expense in this financial year instead of waiting a whole year .. or at least purchase any materials required (eg paint). As long as the work has been committed to is enough to be able to claim the expenditure even if the work has taken place.

Vehicle Expenses – fill the business vehicles up with fuel before the end of year, maybe buy some more RUC and like repairs above, if there is anything that you can see is going to be needed in the next couple of months, do it before 31 March (example tires).

Asset Purchases – even though the increased threshold is now gone, the new threshold is $1,000 (excl GST if GST registered). So consider the purchase of any needed assets below this amount prior to 31 March as they can be claimed as an expense. Click here to read about the rules around the purchasing requirements.

Other Expenses – top up the stationery cupboard, order the printer cartridges, prepay any subscriptions as all these types of expenses are tax deductible.

Donations – pay any donations, particularly school donations, that you wish to before 31 March and get a receipt in order to claim it as a rebate. A company can also make donations and claim as an expense but before doing so please check with us.

BUT don’t just go spending money to save tax .. as cash is always king!

Remember .. to check out our blog by clicking here for other tips and updates.
For some free tools to help you prepare for the new financial year click here.