Whether your client has overpaid or underpaid their provisional tax, tax pooling can give them a fairer deal.
Provisional tax payment dates do not always fall at a convenient time. There are always competing cash flow pressures and other business expenses to consider.
Through tax pooling, your clients gain full control over when and how they pay provisional tax and save money in the process.
Your clients can use tax pooling to:
- Delay an upcoming tax payment
- Purchase a missed tax payment
- Create a tax instalment plan
- Purchase tax for a reassessment
- Finalise tax for an income year
- Sell overpaid tax for premium interest
- Pull tax back into the business if needed for cashflow.
How does it work?
The tax pool combines income tax payments from taxpayers across New Zealand and allows taxpayers to trade those payments to match their needs.
Instead of paying tax directly to Inland Revenue, a taxpayer has the option to pay into a tax pool whenever it suits them. If they have underpaid tax during and/or at the end of the income year, they can purchase tax to settle their liabilities, minimising late payment penalties and debit use of money interest from Inland Revenue. If they have overpaid tax throughout the income year, they can earn premium interest by selling their excess payments to other taxpayers. Funds deposited into a tax pool remain in the tax pool until the taxpayer directs the funds to be used to purchase tax to settle their liabilities, on-sold to another taxpayer, or refunded.
You can set up an account for your client in less than a minute on taxtraders.co.nz. There are no establishment fees or administrative charges.