By Hayes Knight – 13 March 2018

Want to reduce your tax bill?

With a new financial year about to start for 31 March balance date businesses, now is the time to start planning for year-end.

The checklist below will help guide you through the year-end process and show you how to maximise your tax deductions, ultimately minimising your tax bill.


  • Expense assets purchased which cost $500 or less, or where the total cost is $500 or less for similar assets acquired together
  • Claim depreciation from the first day of the month of purchase
  • When you trade-in an asset, treat it as a disposal and capitalise the new asset at its full cost
  • Consider depreciating individual chattels for residential rental property purchased during the year
  • Separate fit-out costs to maximise depreciation deductions for commercial property acquired during the year
  • Update fixed asset register for any assets sold, stolen, scrapped, destroyed or no longer used in the business to determine loss on disposal
  • If an asset sale is expected to result in depreciation recovery, if possible defer the sale until after 31 March
  • Review fixed asset register to identify deductible feasibility and research and development expenditure

Trading Stock

  • Value closing stock at market selling value if lower than cost
  • Perform a stocktake around 31 March to ensure an accurate closing stock figure
  • Write-off obsolete stock
  • If turnover is less than $1.3m and you can reasonably estimate you have less than $10,000 in trading stock, you can use opening stock value as your closing stock figure

Provisions and Accruals

  • 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
  • Ensure you have the necessary supporting documentation in place at year-end

Employment accruals

Amounts owing to employees at balance date for bonuses, holiday pay or long service leave can only be deducted in the current year if the amount is paid within 63 days of balance date (2 June)

Repairs and Maintenance

  • A one year warranty purchased with a fixed asset can be deducted as an expense rather than capitalised providing the cost of the warranty can be separately identified
  • Review fixed asset register to ensure genuine R&M has been expensed and not capitalised to fixed assets
  • Carry out R&M work before year end

Bad Debts

  • To claim a deduction the debt must be physically written off the debtors’ ledger by 31 March (if this is your balance date)
  • Retain documentation to support the debts as not recoverable
  • Remember to make your GST adjustment
  • Bad debts recovered need to be treated as income, with the corresponding GST adjustment

Prepaid Expenses

  • Certain prepaid expenses (eg, rent, insurance, advertising, service contracts and subscriptions) can be claimed as a tax deduction in the current income year so long as they have not been treated as a prepayment in the balance sheet.  Keep documentation to establish when payment was made, what it was for and for what period, so deductibility can be determined
  • ACC levies are deductible when paid


  • Cash donations paid to donee organisations or registered Charities can be deducted to the extent of the company’s taxable income.  If the company is in a tax loss position, consider having the shareholder make the donation and claim the donation rebate

Shareholder Matters

  • Consider paying a dividend or shareholder salary if there is an overdrawn shareholder current account
  • Check the company has sufficient imputation credits; consider bringing forward a tax payment if necessary
  • Dividends for the 2017-18 year should be paid or credited before 31 March 2018
  • Dividend withholding tax is payable on 20 April 2018
  • Review shareholding changes throughout the year to ensure shareholder continuity has been maintained
  • If a dividend is being paid to a non-resident, non-resident withholding tax may need to be considered

International Matters

  • Interest deductibility may be impacted by the thin capitalisation rules if there is control by a non-resident, or offshore investment
  • Cross-border related party transactions need to be at an arm’s length price or will be at risk of being restated by the IRD under the transfer pricing rules

Income Tax

  • If your income/ profit is higher than you had expected, consider making a voluntary provisional tax payment to the IRD or a tax intermediary as soon as possible to minimise IRD interest
  • If you wish to use the new AIM provisional tax method, you must be using the correct accounting software by 1 April 2018
  • If you have not yet filed your 2017 income tax return, ensure it is filed by 31 March otherwise late filing penalties will be charged, your extension of time to file 2018 may be lost and the 4-year statute bar periods extends to 5 years

Look-through companies

If you want your company to enter or exit the look-through company regime for the 2018-19 income year, the election notice needs to be filed by 31 March 2018


Where assets are used for both business and private use, make your year-end GST apportionment adjustment in the 31 March GST return

In Summary

Taking some time to consider the above before you race into the new financial year will help ensure you maximise your tax deductions for 31 March 2018 and ultimately lower your tax bill

Shelley-ann Brinkley
Associate – Tax Consulting
Hayes Knight
(09) 414-5444

Shelley-ann has a passion for demystifying the complexities of tax and providing practical solutions on both domestic and international tax issues that deliver tax efficiencies to clients.