End of Financial Year Tax Planning
For many businesses 31 March is the end of the financial year. There are a number of things that need to be actioned before the end of the financial year that can legitimately reduce your profit. These include:
- Review your accounts receivable (debtors) prior to your balance date and write off any debts that are likely to be bad. If the debts are not written off prior to 31 March they cannot be claimed as a bad debt in your financials.
- If you are considering doing repairs and maintenance in the near future, you could bring this forward prior to your 2021 balance date, so you can claim this expense in the current year.
- Review stock on hand and write off any obsolete stock items.
- Review your fixed asset schedule to see if there are any assets that can be scrapped. Let us know what these are.
- From the 17th of March 2021 the threshold for when you purchase an asset and can claim the full cost as an expense (rather than capitalising the asset and depreciating it) is $1,000 GST exclusive. If you are planning on purchasing any assets for less than $1,000 GST exclusive do this prior to your end of year balance date so you can claim the full cost.