Provisional Tax Made Simple

Most of you will have heard recent releases from IRD relating to their New Provisional Tax option for Small Businesses called AIM (Accounting Income Method).

They’re saying: “Once you’ve opted in to AIM you’ll only pay provisional tax when your business makes a profit. This will help you to avoid cash flow problems. As long as you make your payments in full and on time, there is no exposure to use-of-money interest. If your business makes a loss you can get your refund straightaway rather than waiting until the end of the year.”

This sounds great, and if the stars align it would be very useful.  But we all know the stars don’t always align and we believe this doesn’t work for everyone.

To see if this method will work for you – read on. Read More »



Provisional Tax Changes

You may have heard that the IRD have introduced some changes to the way they manage Provisional Tax.

For many years, some of the biggest gripes we have heard from our clients have related to Provisional Tax.

Why do you have to pay tax based on guesses as to what you are going to earn, and then get penalised if you get it wrong? And yes, we know that Use of Money Interest (UOMI) is actually interest and not a penalty, but people still see it as a penalty, especially as the IRD charge and pay interest as if they are a bank- they pay it at a low rate and charge it at a high rate.

Finally the IRD have listened and have taken the first steps towards making it a bit fairer. Read More »