Fund classification FAQs

How do I know if my taxpayer's funds are deposit funds or purchased funds?

On your taxpayer’s dashboard, we provide a Tax Pooling Summary which will identify funds available in your taxpayer’s account based on a specific tax period. Each line of available funds will have a note detailing whether the funds are purchased funds or deposited funds.

My taxpayer has purchased funds sitting in the pool that relate to a tax year that is closed for tax pooling. What are my options?

You can:

• Swap these funds to a future tax year when tax pooling can still be used.
• Sell the funds and receive a refund.

I only have purchased funds left on my taxpayer's account but my taxpayer is short of funds and I need them to meet another tax type liability. Is there anyway I can use these funds or do I just have to get them paid back to my taxpayer?

The only way purchased funds can be used to assist with meeting another tax liability is to sell the funds. We can make a direct cash payment of the sale proceeds to Inland Revenue on the selected processing day (normally the Friday following the transaction being submitted but will otherwise be the sale date selected on the sell estimate) and have this directed to the tax type and period your client requires.

It is important to note that sale proceeds are dated as at the sale date (not the date of the purchased funds), so if the due date of your other tax liability has passed already, the proceeds sent across will not mitigate all interest and penalties which have been applied to the account. It is preferable if you are aware of a client being in this situation to ensure the sale and the instructions required are set up and supplied to us prior to the tax being due, to minimise the additional costs the client may incur.

Please note supporting evidence of the other tax liability will be requested by our team before the sell can proceed.