A great read from local business- Janine Roberts, Accounting Associate at Haven on “7 Things you should check on before the end of the tax year”.
We’re not far away from the 2019 financial year coming to an end, and with that, it’s time to flag a few important points.
1. Accruals and Expenses
If you have committed to an expense, then it is deductible in the 31 March 2019 accounts. You can accrue it and pay it in April or May 2019 but still take the tax deduction in March 2019. The one exception to this is employee expenses such as bonuses – these must not only be incurred but paid within 63 days of balance date.
2. Bad Debts
In order to take the tax deduction, the bad debt must actually have been written off by 31 March 2019. It isn’t acceptable to book the journal in April 2019 as part of the account preparation work. Make sure you also retain evidence that the debt was bad – i.e. debt collection attempts.
3. Trading Stock
There are two options to value stock – the lower of cost, or market selling value. Where the market selling value is lower than the cost, it is beneficial to revalue the stock at balance date to this value. Again, you need evidence of the market value of the stock at 31 March 2019.
If you haven’t paid that donation you’ve been thinking about, including school fees, paying it in March 2019 is a good idea. The donation rebate form gets filled in and the rebate paid shortly thereafter. If you pay the donation in April 2019, you will need to wait until the end of the March 2020 year to claim the rebate.
If you have no taxable income in the 2019 year, then it may be best to pay the donation in the following year. This is because once there is income, then the rebate can be claimed, or the amount expensed if a company. You have four years to claim any donation rebates, so if you paid any donations between 1 April 2014 and 31 March 2015, now is the last chance to claim any rebates.
5. Shareholder current accounts
If the company is owed money by its shareholders, consider paying shareholder-employee salaries or paying a dividend. Where the shareholder current account is an asset on the company accounts, then there may be fringe benefit tax or deemed dividend issues.
6. Imputation Credit Account (ICA) balance
Time to make sure that the ICA does not have a debit balance on 31 March 2019. If it does, penalties will be incurred. It’s an easy fix – make a voluntary tax payment to clear the debit.
7. Assets Review your fixed asset register – if there are assets there that you no longer have, any that broke, died or you sold them, then you can write them off in the 2019 accounts. If a loss on disposal was made, then a deduction can be taken.
If you want any help with getting things sorted for the end of this tax year, get in touch with the Haven Accounting team – we’d love to help you out!
Janine Roberts on 0800700699 or by email firstname.lastname@example.org
As an Accounting Associate at Haven, Janine is accustomed to working alongside an extensive number of clients, understanding and delivering customised reports specific to their industries and requirements, as well as in ensuring their tax compliance requirements are met. With her strong reconciliation and analytical skills, Janine provides valuable support to businesses in managing and monitoring results against forecasts and budgets.