March End of Year Procedures

March Year End Procedures

There are a number of items that have to reviewed and resolved prior to 31 March when you are running your own business.  Two crucial items to address include:

• Stock takes; and
• Bad debts

If you hold stock in your business, it is very important that you perform a physical stock take prior to 31 March and ensure that your closing stock numbers are correct.  We will need this number in order to complete your annual financial statements.

Bad debts are only tax deductible if they are written off prior to 31 March.  Therefore, you must review all your outstanding debtor balances.  If someone has owed you this money for over 90 days, is it likely that they will pay you?  If not, it may be worth writing off the debt in your accounts to ensure that you are not liable to pay tax on this income.

We recommend you review your bad debt as advise us before 31 March 2024, so we are able to process any bad debt write-offs before balance day.

We have a handy Small Business Checklist that will guide you through what needs to be done for your business.

‍Download your Small Business Checklist here

Xero Bank Feeds

There may be a delay for certain bank feeds over the Easter weekend until the 3rd April 2024.

With it being the end of the Financial Year and Easter break, it may cause some disruption to the feeds. However, it should all be up and running and all the feeds should have come through by Wednesday 3rd April.

New Rules for Rentals

The new Government has restored the mortgage interest deductibility for rental properties. This will be introduced in two stages.

1. For the year ended 31 March 2025, a deduction of 80% of interest paid in relation to residential rentals will be available. This will apply to both pre- and post-27 March 2021 lending. Any property that would have had 100% deductibility under the previous rules (e.g. new builds) will continue to have this for the year ended 31 March 2025 under the new rules.
2. For the year ended 31 March 2026, a full interest deduction will be available.

For the year ended 31 March 2024, no interest deduction is permitted for post-2021 lending to acquire residential property, with a limit of 50% deductibility on pre-2021 lending (with some limited exceptions).

The Government has also introduced a two-year bright line for residential properties purchased from 1 July 2024 onwards. Generally, this means any residential rental property that is the subject of a binding contract for sale, entered on or after 1 July 2024 will not have any capital gains taxed if the property was held for more than two years.

Important Tax Dates

The Tael 2024 Tax Calendars are available to download from our website here or you can collect one from the office.

Upcoming Tax Dates:

8 April 2024 – 2023 Terminal Tax is due for payment to the IRD.

7 May 2024 – The 3rd Instalment of 2024 Provisional Tax is due for payment to the IRD.

‍If you have any questions or concerns for us, please don’t hesitate to get in touch with us.

From

THE TAEL SOLUTIONS TEAM