IF YOU want to write off a bad debt and claim your loss in the current year, you must do this before your business balance date.
Depending on your system of accounting, this could involve writing something like “debt written off by me on. . . Date signed. . . ” across a copy of an invoice. If you have a more sophisticated system, you will need to make it clear the debt has been written off in time.
Logbooks
If you need to keep a vehicle logbook, remember you need to take a representative three-month period and keep a record of all the running for that time.
There is an alternative. You could record the business running only and note the total number of kilometres travelled for the period. By deduction, the difference would be personal.
You are not permitted to do it the other way round and count just the personal running, because any travel which is overlooked needs to be treated as personal by default.
If you forget to record a business trip, you will pay for it yourself. It’s better to try and account for all kilometres travelled every day to minimise the risk of overlooking a business trip.
Kilometre basis
If you’re calculating your vehicle running expenses based on the number of kilometres you have travelled during the year, we will need you to supply that total. Don’t forget to take an odometer reading at the end of the day on 31 March (or equivalent balance date). If you don’t do this the maximum you can claim at the top km rate, currently 76c, is 3,500km whereas if you do keep the opening and closing odometer reading that rate can be used up to 14,000 kms.
If you trade in your vehicle during the year, you will need to keep an odometer reading at the time of sale of the old vehicle and at the time of purchase of the new vehicle.
You are permitted to switch from actual cost to kilometre rate or vice versa whenever you change your vehicle.
This can be done when we prepare your annual accounts, provided we do this within the time Inland Revenue allows us. Normally, we are allowed until 31 March following balance date to get the tax returns to Inland Revenue for the year.
Stocktaking
Now is a good time to tidy up your trading stock. Get rid of anything which has no value. If you’ve got time before balance date, have a sale. Any stock remaining on your shelves at balance date has to be taken into account at cost unless you can prove market value is lower by comparison with other sales outside your business.
Maintenance
If you do maintenance before balance date, you have a tax-deductible cost. Leave until after balance date and your deduction will not be until next year.
Salaries and wages
Any holiday pay, paid out within 63 days of the end of the financial year, may be claimed as a creditor. You can put the amount down as money owing by you at balance date.