Small Business Tax Checklist NZ: What to Do Before 31 March

New Zealand's tax year ends on 31 March. For small business owners, the weeks before and after this date are the most important in the tax calendar. Getting organised now can save you money and avoid compliance headaches later.

Here is a practical checklist to work through.

Make sure all transactions to 31 March are recorded in your accounting software. This means:

• All invoices issued and received are entered
• Bank accounts are reconciled
• Credit card statements are reconciled
• Cash transactions are recorded

If you use Xero, run a bank reconciliation report to confirm everything is matched.

If you have expenses you were planning to incur in April, consider whether you can bring them forward to March. Expenses incurred before 31 March are deductible in the current tax year.

Common expenses to consider:

• Subscriptions and software renewals
• Professional development and training
• Office supplies and equipment (under $1,000 — fully deductible immediately)
• Repairs and maintenance
• Professional fees (accounting, legal)

Important: The expense must be genuinely incurred — you cannot simply prepay expenses to bring forward deductions. There are rules around prepaid expenditure that limit deductions for amounts paid in advance.

If you are planning to buy equipment, computers, or other business assets, buying before 31 March means you get a depreciation deduction for this tax year.

Assets costing $1,000 or less (excluding GST) can be fully expensed in the year of purchase — no depreciation calculation needed.

If you have invoices that are genuinely uncollectable, write them off before 31 March. A bad debt written off before year end is deductible in that year.

To write off a bad debt:

• You must have included the amount in income in a previous year (or the current year)
• You must have taken reasonable steps to collect it
• You must genuinely believe it is irrecoverable

If you are GST-registered, you can also claim back the GST component of a bad debt written off.

If your business holds inventory, do a stocktake as close to 31 March as possible. You can value stock at cost, market value, or replacement cost — whichever is lowest. Writing down obsolete or damaged stock reduces your taxable income.

If you operate through a company, check the balance of your shareholder current account. If the company owes you money (credit balance), that is fine. If you owe the company money (debit balance), you may need to:

• Repay the amount before 31 March, or
• Ensure the loan is on commercial terms (interest at the prescribed rate), or
• Declare a dividend or salary to clear the balance

Overdrawn shareholder current accounts can trigger FBT and deemed dividend issues. Review this with your accountant before year end.

If you pay provisional tax, review your expected residual income tax for the year. If your income has been lower than expected, you may have overpaid provisional tax — which means a refund is coming. If income has been higher, you may need to top up.

Talk to your accountant about whether to make a voluntary payment before 31 March to reduce use-of-money interest.

If you plan to pay staff bonuses or reimburse employee expenses, do so before 31 March to get the deduction in the current year. The payment must actually be made — an accrual alone is not sufficient for most employee payments.

If you are on a two-monthly GST cycle, your March/April return will be due by 28 May. Make sure all GST transactions are coded correctly.

Your accountant will need:

• Bank statements for all business accounts
• Loan statements (showing opening balance, repayments, and closing balance)
• Hire purchase and lease agreements
• Details of any assets purchased or sold during the year
• Vehicle logbook (if claiming vehicle expenses)
• Home office details (if claiming home office expenses)
• Any other income not in your accounting software

The faster you get this to your accountant, the sooner your return is filed and the sooner you know your tax position.

Due dates:

• If you file yourself: 7 July
• If you use a tax agent (accountant): extension to 31 March of the following year (in most cases)

This is one of the key benefits of using an accountant — the extended filing deadline gives you much more time to get your affairs in order.

Once your current year tax is confirmed, review your provisional tax instalments for the coming year. If your income is growing, you may need to increase your instalments to avoid use-of-money interest.

These are not just year-end tasks — doing them throughout the year makes year end much easier:

• Reconcile your bank accounts monthly — do not let it pile up
• Keep receipts for all business expenses — digital copies are fine
• Separate business and personal finances — use a dedicated business bank account and credit card
• Keep a vehicle logbook — if you claim vehicle expenses, you need a logbook
• Invoice promptly — the sooner you invoice, the sooner you get paid
• Set aside tax as you earn — a rough guide is 25-30% of net profit for income tax and provisional tax

A little organisation before 31 March can make a meaningful difference to your tax bill and your stress levels. If you would like help with your year-end tax planning, contact Eastmure & Associates.