Why would I swap tax?

How does it work?

If your client has deposits in the tax pool at an incorrect tax date, these funds can be swapped to the correct date to ensure your client’s tax arrives at Inland Revenue on time.

Swaps are an incredibly efficient way to move tax payments between dates, avoiding IR debit use of money interest (UOMI) or achieving more credit use of money interest.

To use our online swap calculator, all you need are your client deposits in our tax pool. These can be swapped forwards or backwards, and the transactions are entirely cashless.

Benefits

• Ensure tax funds transferred to IR are the correct amount and at the correct date.
• Prevent debit UOMI charges being applied.
• Complete swaps automatically online.
• Earn interest which is automatically used to purchase additional tax where deposits are in advance of the required date; the tax amount achieved is automatically reduced by the interest amount where deposits are being swapped forward to a tax date.

Criteria

• When swapping a deposit, your client is technically selling their deposit and purchasing tax at the correct date. The swapped funds become purchased funds as a result and can only be used to satisfy income tax obligations for current periods.
  • If retaining the ‘own funds’ status of a deposit is important (which allows your client to transfer the funds to non-income tax types), please contact us before submitting the swap request.
• The swapped funds must be transferred to IR within 75 days of your client’s terminal tax date.