Depositing tax FAQs

Do I need to notify Tax Traders if my client is depositing tax into the Tax Traders tax pool?

No, but your client must include their taxpayer name and Inland Revenue number as a reference on the payment so we can recognise it in our system. Our system automatically sweeps payments made to the deposit account into the Public Trust tax pooling account at Inland Revenue each night. To track your client’s entitlement online, you need to have an account with us and have your client added as a taxpayer on your client dashboard.

When do my client's deposits need to be transferred to Inland Revenue by?

Deposits paid into the tax pool are not subject to any time restriction for the taxpayer who holds the deposit, or any companies sharing >66% common ownership.

But for any amounts your client has purchased or swapped (or if the deposits are to meet a tax payment), these amounts need to be transferred within 75 days after their terminal tax date (amounts being transferred to a related entity will also be subject to this time limit).

If deposits are to be transferred to a closed income year, we will ask for evidence of outstanding liability at IR, in order to meet our AML obligations.

Can my client’s deposits be used for non-income tax payments?

Yes, because they are your client’s own funds, your client can use them to cover non-income tax payments where the deposit has been made prior to when the non-income tax payment was due. No time limit applies to this. Your client can then purchase back their tax through Tax Traders to cover any income tax shortfall (this purchase would need to be completed within 75 days of your client’s terminal tax date). There is a process to follow when transferring for non-income tax payments. Please contact one of our specialist team to discuss your client’s requirements.

Can I transfer my client’s deposits out of the tax pool to another taxpayer’s income tax account at Inland Revenue?

Yes, provided your client and the recipient taxpayer are ‘related entities’ and that this is done within 75 days of the recipient taxpayer’s terminal tax date.

Can I transfer my client’s deposits out of the pool to another taxpayer’s account at Inland Revenue for non-income tax?

Yes, provided the recipient taxpayer is a member of the same wholly owned group as your client, as at and from the date of deposit, and the date they are transferring the tax to is not earlier than the date of the deposit.

Can I transfer my client’s deposits from the tax pool to my client’s income tax account at Inland Revenue if they have not filed a tax return yet?

Yes you can, if there is an expected liability and it is prior to the filing date. Inland Revenue no longer requires your client to have filed a return before transferring tax from a tax pool to their income tax account. Once this is done however, any tax pooling benefits and flexibility with respect to the transferred funds will be lost.

I made a mistake on the transfer instruction, what can I do?

Tax Traders advise transfer requests to Inland Revenue weekly on a Friday. If you have made a mistake and we have not yet advised the transfer to Inland Revenue, please contact us to request the necessary correction. Once the transfer has been advised to Inland Revenue, any request for correction will need to be made directly to Inland Revenue through your client’s MyIR account.

Are there any fees for depositing tax?

No, there are no fees for depositing or transferring tax.

Is there a minimum deposit amount?

No, there is no minimum deposit amount.

How do I know my client’s funds will be safe?

All payments and refunds are made to and from bank accounts owned by Public Trust, who act as custodial trustee on your client’s behalf in relation to all client funds. Tax Traders has no authority on these accounts. Inland Revenue has also acknowledged Tax Traders has no authority to instruct Inland Revenue in relation to the Inland Revenue tax pool account. All instructions in relation to client funds and provisional tax payments must be authorised by Public Trust.

Public Trust is one of New Zealand’s largest trustee organisations and a Crown entity – their independence is guaranteed under the Public Trust Act 2001. We engaged Public Trust because they are Government owned and are known for their independent and reliable service.

Will Inland Revenue still send payment reminders if my client makes tax payments to the Tax Traders’ tax pool?

Yes. We do advise Inland Revenue of all tax pool users and Inland Revenue’s system is able to suppress some, but not all, payment reminders. Because tax pool payments do not show in your client’s Inland Revenue account until your request to transfer them to their income tax account has been processed, any statements that Inland Revenue issue in the interim will show nil payments, and may have interest and late payment penalties recorded.

Provided you transfer amounts from the pool to exactly match any payments required under the return filed for or by your client, your client’s final statement from Inland Revenue will show their payment as being made on time and any interest and/or late payment penalty charges will be removed.

Can my client get their deposits refunded?

Yes, your client can get their deposits refunded within three to four days. The tax pooling industry is governed by AML/CFT laws so for us to pay out cash, we would need your client to complete the relevant identification forms and requirements. In many cases, these checks can be done online. If your client has made a refund request and we need AML/CFT identification completed, one of our specialist team will be in touch with you.