TAX TIDBITS In this months issue: Year End Accounts
With the end of the 2010 financial year accounts having arrived there are some issues that business owners should consider before forwarding their year end accounts information. These issues impact on the tax position of the company. HWI SEMINAR FOR JUNE Our next seminar is the 30th of June 2010 and is on 'WHERE TO FROM HERE AFTER THE JOHN KEY'S BUDGET ANNOUNCEMENT'. This is a FREE breakfast seminar from 9am to 11am for you and your business colleagues. Please email us at hwi@hwi.co.nz or book via the www.hwi.co.nz website to register.
Issue Forty One, June 2010
Prepaid Expenses
Some expenses will be prepaid at year end. It is possible that monetary and time limits may apply to these expenses. This impacts on when an expense can be claimed for tax purposes.
Please advise HWI of any expenses paid at year end that relate to the next financial year, either in part or in entirety.
Holiday Pay Owing
Holiday pay owing at 31 March 2010 which is paid to employees before 2 June 2010 may be deductible for tax purposes in the March 2010 accounts. Please make sure that you advise HWI of any such Holiday Pay owing when you forward your year end accounts information.
Valuation of Trading Stock
If your turnover is not more than $1.3 million in the income year, you may use the opening stock as the closing stock figure if you reasonably estimate the value of your closing stock to be less than $10,000.
If a reasonable estimate of the value of closing stock is more than $10,0000 then businesses need to value any stock on hand at year end. For most businesses this valuation will be based on the cost of the stock. Where the value of the stock on hand is likely to have reduced significantly from the original cost price there are alternative valuation methods available. If you believe that this applies to you please discuss with HWI the method of stock valuation that is most applicable.
Imputation
Please ensure that you advise of any changes in shareholding that may have occurred during the year that have not been processed by HWI. A level of continuity is required to maintain a company's imputation balance and serious consequences can result where continuity is not considered before a shareholding change has occurred.
If you have any queries please don't hesitate to contact us.
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained. 
