Start getting ready, now, for the end of your financial year. Some things need to be done in advance:
Bad debts
If you have customers who are not paying their debts and you have taken all reasonable steps to collect the money, write off the bad debt before you get to balance date or you will not be able to claim that cost as a tax-deductible expense.
Kilometre rate
If you claim for the running costs of your motor vehicle on a kilometre rate basis, make a note to get an odometer reading on balance date. The rate is calculated based on the total number of kilometres travelled in the year and the proportion of them used for business. If the total number of kilometres exceeds 14,000 there is a two-step process for the calculation.
Vehicle logbook
If you need to keep a logbook you must do so for a three-month period at least once every three years.
Stock
If you are a retailer, this is a good time to start organising your stock ready for counting it. Get rid of obsolete stock. If you keep it, it still has to be valued at either what you paid for it or its current market value – for which you must have evidence.
Maintenance of equipment
Any maintenance you carry out before the end of your financial year is tax-deductible for that year. If you are planning maintenance in the short term, it might save you tax if you got on with it before the end of the financial year. Maintenance means bringing the asset back up to its original condition.
