Chartered Accountants and Business Advisors

Tax Tips

Year End Tax Planning Strategies

At this time of year many clients are wanting to know how to save on tax before June 30th arrives, so we thought we would provide this checklist as a simple means of ensuring you are doing all you can.

Business Strategies:

Standard strategies for reducing/delaying tax include:


  • Invoicing clients or customers, where possible, until July, for those recording sales on credit;
  • Banking of cheques until July for those recording sales on a cash basis (limited use),
  • Both these are very useful between one year and the next, particularly where tax rates reduce and thresholds increase in the later financial year. A delay could reduce your overall tax bill.


  • Income received late in the year to see if any of it could be treated as income in advance, and long outstanding debts to see if they can be written off as bad before June 30;
  • All stock lists for possible write-offs or revaluations, these must be physically written off your systems before June 30;
  • Plant and equipment for any obsolete items that could be written off or have their useful lives reduced, so increasing depreciation claims;
  • Monies invested and delaying maturity dates where possible;
  • Any capital gains made during the year and assessing whether any loss-making assets should also be sold to offset/reduce these gains, particularly in relation to shares;
  • Ownership of income-earning assets to see if changes in your structure may allow for income splitting, access to lower tax rates etc.
  • As above, any expenses claimed in the current tax year will give a greater tax benefit than if they are claimed in a later tax year.
  • The Personal Services Results Tests and 80/20 income source test, to see if you can qualify as a Personal Services Business.
  • The Non-Commercial loss rules for small micro businesses, to see if even bringing income forward into the current year may be of assistance.


  • All expenses incurred pre-June 30, that will not be paid until July 1 or later;

Bringing forward

  • Any expenses that may be currently budgeted for payment in July or later;


  • Items of plant and equipment where you can actually claim a full years depreciation (See STS); and/or use the 200% diminishing value rates announced in the 2006 Budget.


  • Expenses such as rent, car leases, interest, etc. for up to 13 months (now subject to restrictions for some businesses.). After 1st July 2002 only generally available to STS taxpayers and individuals; and needs a commercial reason and/or legal requirement to do so;


  • Superannuation contributions for business owners and their spouses, and ensuring the payments are made in time to have the super fund clear the cheque before June 30;
  • The value of your super by considering the abolition of the Superannuation surcharge from July 1 2005, and maximising contributions where possible.


  • whether bonuses are applicable for directors and employees and accruing these this year to be paid next year;


  • The Simplified Tax System (STS). Allows businesses that meet the criteria to:
    • use cash receipts instead of invoices for calculating gross income;
    • obtain immediate write-offs for plant & equipment costing up to $1000;
    • use pooling of assets over $1000 to gain accelerated rates of depreciation.
  • Having interim accounts prepared before June 30 so you know exactly what your profit position is before making any decisions.
  • Calling Piermonts Chartered Accountants & Business Advisors before June 30 instead of after.