What is Taxi and how does it work?
Taxi is our new venture giving Kiwi businesses easy access to working capital at about half the rate of a big bank overdraft.
Taxi uses the tax pooling framework to unlock a new source of working capital for businesses. Instead of your clients’ provisional tax payments sitting idle in their myIR account, these payments can be used as security to provide access to affordable funding.
This kind of funding has been utilised by New Zealand’s largest companies for over ten years and Taxi makes it available to all Kiwi businesses that pay provisional tax.
Taxi provides significant benefits for your clients
Without working capital some businesses can struggle to grow and thrive. Taxi allows businesses to use their provisional tax payments as security to access affordable, dignified business funding.
With Taxi, your clients can:
- Halve their overdraft costs.
- Access new funds for growth (no further application to the bank required.)
- Manage seasonable trading – on average a New Zealand business
is cash flow negative for 4 months of the year. - Have peace of mind with a standby facility.
- Secure a new source of funding that can sit alongside their banking facility, without
affecting their existing credit limit
How does Taxi work?
- Your client creates an account with Taxi. No financial disclosures or credit checks are required, apart from a standard AML check.
- Your client pays their provisional tax through Taxi. These payments are held on their behalf, by Public Trust, at Inland Revenue.
- Taxi allows these payments to be used as security to access affordable funding and meet their tax obligations at the same time.
- When your client requires funding, they can access an amount equal to 90% of the provisional tax paid through Taxi or Tax Traders in the last 12 months.
- Access is straightforward and funds are in their bank account within 3 working days, without further application or documentation. Repayment is flexible and works with your client’s business.
- Following your client’s terminal tax date, we transfer their tax payments to IRD, within the legislative time frame.
Who can and can't use Taxi
Taxi uses the tax pooling framework and uses tax payments that have been paid into a “tax pool”. If your clients are already using Tax Traders, you’re in an excellent position to recommend Taxi to them. Your clients can start accessing funding through Taxi straight away, using their existing tax payments, deposited into a tax pool.
If your clients are not using Tax Traders yet, now is the perfect opportunity to recommend this. Once your clients have paid their tax payments into the Tax Traders tax pool, they can access funding via Taxi when they need it (and chances are they will!).
Businesses that are not eligible to use Taxi are those:
- Not paying provisional tax
- On a payment plan with IRD to settle historic tax obligations
- Using the AIM provisional tax method.
Taxi cannot be used for terminal tax obligations.
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