As the financial year in New Zealand ends 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.
As 31 March approaches, are you ready to wrap up the financial year with confidence — or risk penalties and missed savings?
Here are the top considerations to keep in mind before the end-of-financial year (EOFY) deadline.
1. Income and tax obligations: plan smart, pay less
Provisional tax payments
Missing your provisional tax deadline could result in unnecessary penalties and interest. Check your IRD payment schedules now — your final payment needs to be made by 7 May to avoid penalties and keep your business tax strategies 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 reduction by finalising bad debts helps maintain accurate records and lower your tax bill.
2. Maximise your deductions and expenses
Prepaid expenses = more savings
Depending on IRD thresholds, expenses like rent, insurance, and subscriptions could be deductible expenses you may be able to claim in advance. Look ahead and consider early payments to maximise tax benefits.
For example, under IRD rules, prepaying $2,000 in business insurance before 31 March could qualify as a deduction this year.
Review last year’s fixed asset register
Review your fixed assets to ensure they are all still in use and note any that need removing. Removing obsolete or sold assets ensures your depreciation claims stay accurate and your balance sheet reflects current operations to ensure you do not leave any surprises during future auditing activities.
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 — for most taxpayers, payments need to be made by 31 March to qualify for a tax deduction this year. Bonuses should also be settled by 2 June to ensure they count for this tax year.
3. GST and PAYE compliance: stay on the right side of the IRD
GST adjustments matter
Ensure proper adjustments are made to offset the private use of business assets, bad debt write-offs and other necessary transactions before filing your final GST return. These adjustments are vital to tax compliance and should not be rushed or overlooked at EOFY.
Payroll and KiwiSaver: no room for mistakes
Double-check that all PAYE and KiwiSaver obligations are met. Late payments can lead to unnecessary penalties, so ensure all payroll deductions are up to date to stay compliant.
4. Trusts and Companies: take action before 31 March
Trust distributions
With recent trust tax rate changes, trustees should review and finalise distributions before 31 March to avoid unnecessary tax burdens and minimise your exposure to the new trust tax rate.
Dividend decisions
If you own a company, should you declare dividends now or later? Reviewing dividend options can help optimise shareholder tax efficiency. Now is the time to evaluate if declaring a dividend will benefit shareholders before the new financial year.
5. Get organised and file with confidence
Sort your financial records
A cluttered tax season is a stressful tax season. Maintaining accurate records by ensuring all invoices, receipts, and records are in place helps reduce risk in case of an IRD audit and supports faster, stress-free filing.
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. Tax planning shouldn’t be left to guesswork. Work with a financial advisor to ensure you are prepared for the End of financial year
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!
Contact your local William Buck advisor today to optimise your end-of-financial-year position.
