YEAR END
31 MARCH 2022

The following is a list of must-do items in preparation of year end 31 March 2022, make sure you work through a year-end process to maximise your tax deductions and minimise your tax bill.

Assets

Assets purchased for less than $1,000 can be expensed
Depreciation can be claimed from the first day of the month of purchase
Ensure assets traded in are disposed of and the replacement asset is depreciated and recorded at its full cost
Depreciate residential rental property chattels purchased during the year
Depreciation can be claimed on commercial property, provided it has been claimed previously or the property was newly acquired in the 2022 year
Review your fixed asset register from your 2021 financials– ensure assets sold, stolen, scrapped or destroyed are noted on the asset register and provide this list to us.
If an asset sale is expected to result in depreciation recovery, consider deferring the sale until after 31 March 2022
Review repairs and maintenance codes to ensure all assets are moved to the asset account where appropriate

Trading Stock

Value closing stock at market selling value if this is lower than cost
Carry out a stocktake at 31 March to ensure an accurate closing stock figure
Write-off any obsolete stock
If trading stock is less than $10,000 and turnover is less than $1.3m, you can use the opening stock value as the closing stock figure (even if this is nil)

Accruals and Provisions

These are not deductible in the current year unless you are definitively committed to the expense at year-end and the amount can be reliably estimated
Keep a record of employment provisions paid out between 1 April and 2 June as that portion of the provision is deductible in the 31 March financial year, this includes holiday pay and bonuses

Repairs and Maintenance

A one-year warranty purchased with a fixed asset can be deducted as an expense rather than capitalised, provided the cost of the warranty can be separately identified
Review fixed asset registers to ensure genuine R&M has been expensed and not capitalised to fixed assets

Bad Debts

The debt must be physically written off the debtors’ ledger by 31 March to be deductible
Retain documentation to support the debts as not recoverable
Claim the GST adjustment of any bad debt adjustment if you are on invoice basis

Donations

Cash donations paid to donee organisations or registered Charities are deductible up to the level of net income.  If the business is in a tax loss position, consider the owner making the donation and claiming the donation rebate.

Cut Off

Follow year-end cut off procedures to ensure sales, stock, expenses, etc, are accounted for in the correct year

Income Tax

The third instalment of 2022 provisional tax is due 7 May 2022 based on actual results to 31 March, therefore it is important to have your records in order to determine this if you are not paying based on standard uplift. Remember, the tax rate for individual’s income over $180,000 is now 39%.
If you have not yet filed your 2021 income tax return, please be aware there is now an extension of time to lodge until 31 May 2022. If we haven’t been in touch with your 2021 results we are certainly working towards getting them finalised in time and as soon as possible.

GST

Ensure you have made any GST adjustments required from the preparation of 31 March 2021 financial statements

System Considerations

Ensure bank reconciliations are completed to financial year end and that all bank and loan balances in the accounting system match the bank statements that will be provided to your accountant
Confirm the balances of outstanding creditors and debtors are accurate
Where possible, lock your system at the year end to ensure no changes can be made once the final position has been determined

YEAR END31 MARCH 2022

The following is a list of must-do items in preparation of year end 31 March 2022, make sure you work through a year-end process to maximise your tax deductions and minimise your tax bill.

Assets

Assets purchased for less than $1,000 can be expensed

Depreciation can be claimed from the first day of the month of purchaseEnsure assets traded in are disposed of and the replacement asset is depreciated and recorded at its full cost

Depreciate residential rental property chattels purchased during the year

Depreciation can be claimed on commercial property, provided it has been claimed previously or the property was newly acquired in the 2022 year

Review your fixed asset register from your 2021 financials– ensure assets sold, stolen, scrapped or destroyed are noted on the asset register and provide this list to us.

If an asset sale is expected to result in depreciation recovery, consider deferring the sale until after 31 March 2022

Review repairs and maintenance codes to ensure all assets are moved to the asset account where appropriate

Trading Stock

Value closing stock at market selling value if this is lower than cost

Carry out a stocktake at 31 March to ensure an accurate closing stock figure

Write-off any obsolete stock

If trading stock is less than $10,000 and turnover is less than $1.3m, you can use the opening stock value as the closing stock figure (even if this is nil)

Accruals and Provisions

These are not deductible in the current year unless you are definitively committed to the expense at year-end and the amount can be reliably estimated

Keep a record of employment provisions paid out between 1 April and 2 June as that portion of the provision is deductible in the 31 March financial year, this includes holiday pay and bonuses

Repairs and Maintenance

A one-year warranty purchased with a fixed asset can be deducted as an expense rather than capitalised, provided the cost of the warranty can be separately identified

Review fixed asset registers to ensure genuine R&M has been expensed and not capitalised to fixed assets

Bad Debts

The debt must be physically written off the debtors’ ledger by 31 March to be deductible

Retain documentation to support the debts as not recoverable

Claim the GST adjustment of any bad debt adjustment if you are on invoice basis

Donations

Cash donations paid to donee organisations or registered Charities are deductible up to the level of net income. If the business is in a tax loss position, consider the owner making the donation and claiming the donation rebate.

Cut Off

Follow year-end cut off procedures to ensure sales, stock, expenses, etc, are accounted for in the correct year

Income Tax

The third instalment of 2022 provisional tax is due 7 May 2022 based on actual results to 31 March, therefore it is important to have your records in order to determine this if you are not paying based on standard uplift. Remember, the tax rate for individual’s income over $180,000 is now 39%.

If you have not yet filed your 2021 income tax return, please be aware there is now an extension of time to lodge until 31 May 2022. If we haven’t been in touch with your 2021 results we are certainly working towards getting them finalised in time and as soon as possible.

GST

Ensure you have made any GST adjustments required from the preparation of 31 March 2021 financial statements

System Considerations

Ensure bank reconciliations are completed to financial year end and that all bank and loan balances in the accounting system match the bank statements that will be provided to your accountant

Confirm the balances of outstanding creditors and debtors are accurate

Where possible, lock your system at the year end to ensure no changes can be made once the final position has been determined

Attending to these matters now will help us to ensure you maximise your tax deductions for 31 March 2022 and ultimately lower your tax bill.

YEAR END
31 MARCH 2022

Depreciation can be claimed from the first day of the month of purchase
Ensure assets traded in are disposed of and the replacement asset is depreciated and recorded at its full cost

Cash donations paid to donee organisations or registered Charities are deductible up to the level of net income.  If the business is in a tax loss position, consider the owner making the donation and claiming the donation rebate.