As the financial year in New Zealand comes to a close on 31 March, individuals and businesses must take action now to ensure they are financially prepared. With smart tax planning, you can maximise deductions, avoid penalties and start the new financial year on a strong footing. Here are the top considerations to keep in mind before the EOFY deadline.
1. Income & Tax obligations: plan smart, pay less
Provisional tax payments
Missing your provisional tax deadline could mean unnecessary penalties and interest. Check your IRD payment schedules and ensure your final payment is in by 7 May to stay on track.
Don’t leave bad debts hanging
If you’ve got unpaid invoices that aren’t going to be recovered, write them off before 31 March. Claiming a deduction for bad debts reduces taxable income and keeps your financial records accurate.
2. Maximise your deductions and expenses
Prepaid expenses = more savings
Expenses like rent, insurance and subscriptions could be deductible in advance, depending on IRD thresholds. Look ahead and consider early payments to maximise tax benefits.
Review last year’s fixed asset register
Review your fixed assets to check they are all still in use and make a note of any that need removing (if they have been sold or are obsolete etc).
Stock valuation: reduce taxable income
A proper stocktake can reveal slow-moving, obsolete or damaged inventory that should be written off. Lower stock values can reduce taxable income, so don’t overlook this simple adjustment.
Employee bonuses and benefits
If you’re rewarding your team with bonuses or incentives, make sure these are paid within 63 days of the balance date, which is 31 March for most taxpayers, to qualify for a tax deduction this year.
3. GST & PAYE compliance: stay on the right side of the IRD
GST adjustments matter
Ensure proper adjustments for private use of business assets, bad debt write-offs and other necessary transactions before filing your final GST return.
Payroll & KiwiSaver: no room for mistakes
Double-check that all PAYE and KiwiSaver obligations are met. Late payments mean penalties, so staying compliant is crucial.
4. Trusts & Companies: take action before 31 March
Trust distributions
With recent tax rate changes for trusts, trustees should review and finalise distributions within the prescribed timeframe to avoid unnecessary tax burdens.
Dividend decisions
If you own a company, should you declare dividends now or later? Reviewing dividend options can help optimise shareholder tax efficiency.
5. Get organised and file with confidence
Sort your financial records
A cluttered tax season is a stressful tax season. Ensure invoices, receipts and records are in order for a smooth filing process and fewer audit risks.
Seek professional advice
A tax expert can help you uncover savings and ensure full compliance with IRD regulations. If you’re unsure about anything, now’s the time to get expert guidance.
EOFY is more than just a deadline—it’s a golden opportunity to review your financial health, cut down your tax bill, and prepare for a prosperous new financial year. Take proactive steps now, and you’ll thank yourself later!
For more information on any of the above or assistance preparing your tax return, contact your local William Buck advisor.
