For those unsure about tax pooling, it might seem too good to be true.
Read on to unravel the myths from the facts.
1. Tax Management NZ can only be used by big corporate companies with lots of money.
Wrong. Many smaller companies and individual taxpayers use Tax Management NZ’s services – especially Flexitax, our most popular product. In fact most accountancy firms in NZ use tax pooling to save their clients use of money interest and late penalties. No minimum amount required.
2. It’s not worth bothering with using tax pooling if savings to be made are small.
Wrong Again. We not only help clients save on use of money interest, we help taxpayers avoid late penalties if the provisional payment dates don’t match their cashflow.
3. Entering transaction details online will obligate the taxpayer to proceed with the transaction.
Sorry, wrong. Once you’ve gone online or called us to do a savings calculation, there’s no obligation to proceed. In fact, you can log in to get quotes without connecting it to a specific taxpayer. The transaction only gets completed when clients pay off the full tax amount.
4. When clients use TMNZ to pay their provisional tax, we hand the money to your client’s individual account at the IRD for payment.
You guessed it – wrong. The underlying provisional tax payment is already held in trust by Guardian Trust at IRD, earmarked for the provisional tax date to be paid. TMNZ has an arrangement in place where the provisional tax will be transferred to your client’s individual tax account at IRD once you pay off what is owed.
5. Organising tax pooling is too difficult and time consuming.
Ah no! You can set up arrangements online within a minute and receive automatic confirmation the transaction has been completed.