All Blogs

Year End Tax Planning Tips

 We have compiled some tax planning tips to help you prepare for 2025 financial year end.

Please contact us if you have any questions about any of these items or if we can help with any other matters.

 For Business Owners

(A) Income Recognition

  1. Debtors and Bad Debts

Review your outstanding debtors list.  Write off any debt that you have been chasing for a reasonable amount of time but without success.

Remember if you do not write them off before 31 March, you will be paying income tax on it even though you may never recover the payment.

Ensure you keep a record of the time and measures you put into collecting the debt, before writing off the debt in case there is an IRD review/audit.

NOTE: Just because you have written off the debt, it does not prevent you from pursuing the debtor or referring them to debt collection agency. You will only pay income tax when you collect the debt.

  1. Stock & Work In Progress

Trading stock on hand must be calculated on its cost as at 31 March. Therefore, ensure you have completed a physical stock-take and note down the closing cost.

Write off and physically dispose any obsolete stock before 31 March.

Work in Progress. Costs incurred for work that is not completed or billed as at 31 March must be recorded as Work In Progress. Please write off any costs you believe are unrecoverable from your clients otherwise you will be paying tax on these unrecoverable costs.

(B) Claiming Expenses

  1. Repairs and Maintenance

You may wish to bring forward any repairs or maintenance work before financial year end to claim a deduction.

If the repairs are finished before 31 March but invoiced afterwards, you will be able to accrue and claim these deductions in FY2025.

  1. Write off obsolete Fixed Assets

Review the fixed assets schedule in your FY2024 financial statements.

Identify, remove, and write off all obsolete, non-functional assets or any assets that were disposed in the year

  1. Low Value Fixed Assets

Remember the $1,000 (GST exclusive) cost threshold. Subject to some provisos, you will be able to claim the item as an expense if it is below this threshold.

Please provide us with the asset details so that we can help you to evaluate against the conditions.

NOTE: if you purchased assets that are over this cost threshold, please provide us with the asset details or invoices so that we can select the appropriate depreciation rate for the item.

  1. Vehicle Expenses and Log Book

If your business has vehicles that are not 100% used for business, you need to keep a logbook over a test period to determine the business deducible %.Note: generally speaking, travel between home and work will be treated as private not business.

Please call if you have any questions.

  1. Staff Bonuses and Holiday Provisions

Staff bonuses that are determined before year end and paid within 63 days of year end (i.e. before 2 June) can be accrued and claimed as deductions in FY2025.

Holiday pay and long service leave owed that is payable within 63 days of year end are also deductible.

  1. Donations to charities with IRD approved donee status

Companies can claim deductions when making gifts to organisations that have approved done status. However, the amount deducible is limited to the extent of the net income for the Company.

NOTE:

For individual taxpayers, you can claim up to 33% of the donation as a charitable rebate in your personal names provided you derived taxable income equals or bigger than the donated sum.

You may consider bringing forward and making donations before 31 March so that you can claim the rebate in FY2025 income year.

  1. Prepayments

If you are in a strong cashflow position, you may consider prepaying expenses before 31 March and claim them as deductions in FY2025.

The following list sets out what you can claim as deduction when these expenses are prepaid in advance before 31 March:

Accounting Fees

Postage & Courier

Rates

Road User Charges

Printing & Stationery

Subscriptions to newspapers, professional journals

 No $ limit

No limit to number of months paid in advance
Advertising $14,000 limit

Maximum of 6 months payable in advance
Insurance Premiums Total annual premium cannot exceed $12,000

Maximum of 12 months payable in advance
Rent for Land & Buildings $26,000 limit

Maximum of 6 months payable in advance
Service or Maintenance Contracts Total annual amount cannot exceed $23,000

Maximum of 3 months payable in advance
Trade Professional Association Subscriptions Total annual subscription cannot exceed $6,000

Maximum of 12 months payable in advance
Telephone No $ limit

Maximum of 2 months payable in advance
Travel $14,000 limit

To be used within 6 months after balance date

 

(C) Other Compliance Matters to action before 31 March

  1. When Filing the March 2025 GST return

Before filing your March 2025 GST return, please remember to check whether you need to include additional GST adjustments.

We would have already advised you any GST “overs and unders” adjustments in our reporting letter.  Please call if you are unsure of the figure you need to adjust.

Please collate copies of your previous GST returns and workings for the year ended 31 March.

  1. Subvention Payments

Please remember to arrange subvention payments if your “profit making company” had utilised loss offset against “other loss making company” in the group for the previous 2024 income year. Due date is before 31 March 2025.

For Property Investors

  1. Selling properties

Please call us if you are planning to sell or likely to settle a sale before 31 March. We need to consider the following:

  • Bright Line Gains and Losses
  • Tax on depreciation clawback (if any)
  • Timing of the sale – being so close to end of the financial year, you may wish to defer the sale to FY2026.
  1. Repairs and Maintenance

Try to finish any repair works that you have been putting off.

If the repairs work is completed before 31 March, you will be able to accrue and claim these expenses in FY2025 but delaying payment until April 20th.

NOTE: For property investors, you can only claim repairs that have been paid for before 31 March.

  1. Depreciation

If you have purchased a commercial property, you may be able to maximise your depreciation deduction by separately identifying commercial leasehold fitout items.

NOTE: For FY2025, commercial landlords can no longer claim depreciation on building.

If you have purchased a residential property, you may be able to maximise your depreciation deduction by separately identifying the chattel items.

For Trusts

  1. Trust Review

Please provide us with any amendments/variations to your trust deed if you had a trust review with your lawyers.

NOTE: please consult with your lawyer if you have not had a trust review yet.

  1. Changing trustees

Please provide us with all the legal documentation if any trustees have retired or if you have appointed new trustee.

  1. Beneficiaries coming of age

Please provide us with the details of the beneficiaries who will turn 16 years of age before 31 March 2025.

NOTE:

  1. Any income distribution to beneficiaries aged 16 or older will be taxed at their respective personal marginal tax rate.
  2. Any income remained in trust will be taxed at 39% for FY2025 income year.