Are you prepared for Year End 31 March 2025?
To All Our Valued Clients
Appreciating this time of year is busy for all, this is a quick message to make you aware of some of the things that you may be asked for with end of financial year fast approaching.
We have enclosed the new 2025 checklist in anticipation for your 2025 accounts come 31 March 2025. Please have a read through and only fill in the relevant sections applicable to your circumstance.
If you know your personal or business circumstances have changed significantly from prior year or going forward to the 2025 tax year we strongly encourage you to get your information in to us early so we are able to be on the front foot with addressing these circumstances rather than on the back foot so we are able to provide the best advice and position.
Checklist
2025 Client checklist
Martin Thomas
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Key Tax Updates
Increased trust tax rate: Trustees planning income distributions should consider the timing, and purpose of the trust deed provisions to understand the tax implications. If profit of over $10,000 is left in the trust then this will be taxed at a 39% tax rate. Anything under is still taxed at the 33% rate.
Residential rental interest deductibility: Recent tax updated have increased the deductibility of interest expenses on residential rentals (back to 80% deductibility regardless of when the property was acquired or when the loan was drawn down), however, this is still subject to limits on tax deductions and residential ring-fencing rules. Full deductibility of interest will apply from the 2026 financial year (but still subject to the ring-fencing rules).
Commercial building depreciation: General depreciation for commercial buildings has been removed from the 2025 financial year. Is there fit-out components that can remain depreciable? Can this be determined?
Provisional tax and cash flow planning - With the 7 May 2025 provisional tax (final 2025 installment) fast approaching, businesses should calculate their taxable income in advance, or get in touch with us so we can look at your position to advise. As if over $60,000 tax to pay for the financial year, Use-of-money interest can apply from this date if not accurately managed. Let's be on the front foot.
GST on Assets previously claimed not acquired for taxable supplies
DEADLINE FOR OPTING OUT: 31 MARCH 2025
Change in the GST legislation allows taxpayers to opt out of GST if they made only a partial claim/ claim on an asset that was not acquired for taxable supplies. By opting out you must pay back the GST claimed previously to the IRD therefore, are not required to pay GST on the entire sale proceeds when sold. If you don't opt out, you could be required to pay GST on the entire sale proceeds when sold. e.g. a beach house used for own purposes more than it is Airbnb
Think this may apply to you or your entities please contact us immediately.
Year End Essentials
Bank Accounts if wanting to close a company at 31 March 2025
If you are wanting to wind up a company or trust make sure the bank account balance if any, is transferred and account/s are closed by 31 March to ensure another tax year is not required to be completed.
Cash & Petty Cash
If you are running petty cash make sure you have a tidy record of incomings and outgoings with the balance of your tin at 31 March.
Record any cash banking that have been put into the safe yet to be banked at 31 March, e.g. you might have 3 days of cash banking in the safe but don’t bank until April when you can physically get to a bank.
Count up the cash funds in your tills if you run a shop as your cash on hand at 31 March.
Debtors, Creditors & Bad Debts
Review your debtors list and make sure that you review and physically write off any bad debts before 31 March 2025 in your system, so it is not included as income for the current year.
Make sure creditors are all there and accurate, tidy up the ones that are not correct.
Stock & Livestock
If you carry more than $10,000 worth of stock you will need to complete a stock take and add up the value of the stock you have at year end. This is recorded as cost excluding GST. Write-off any obsolete stock.
If you run a farming business please ensure that your livestock head count is completed at 31 March, this should include, Gender, age & details of any deaths or personal consumption.
Please get in touch with us at MDA if you need to discuss any of the matters above.
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