Forgot to make a tax payment? Your client can pay outstanding tax at a time that suits their cashflow.
Purchase a missed payment
If your client has not paid their provisional tax by the due date, they can purchase tax from the Tax Traders tax pool. Purchasing tax from the tax pool will save your client money. They will pay less interest than settling a late payment with IR directly, while eliminating late payment penalties and interest altogether.
How does it work?
Tax pooling allows your client to purchase another taxpayer’s tax to settle their outstanding taxes with IR. This is a win-win outcome, because the person selling the tax receives more interest than IR's standard credit use of money interest (UOMI) rates.
It is a classic example of taxpayers helping other taxpayers for mutual advantage.
Tax Traders is an IR-approved tax pooling intermediary and acts like a broker to facilitate this market.
Benefits
- Reduced interest cost and eliminate late payment penalties.
- No minimum purchase amount.
- Immediate confirmation of purchase requests.
- Flexible payment options available online to suit your client’s cashflow and business priorities.
- Transactions processed weekly, so there are no long waits.
Criteria
- Tax purchases must be completed and transferred to IR within 75 days of your client’s terminal tax date.
- Income tax is the only tax type that can be purchased for an initial assessment.
- Other tax types can be purchased, but only if your client has had a reassessment from Inland Revenue and the initial return was paid and filed: GST, DWT, RWT, NRWT, PAYE, FBT, ESCT, and RSCT. Purchases and transfers must be completed within 60 days of the date of issue of the reassessment for these other tax types. Our online tools will guide you through this.
- IR has a discretion to allow a taxpayer to use Tax Traders if a voluntary disclosure has been made, but no previous return has been filed. There are specific criteria that a taxpayer needs to meet. Please contact us to discuss.