When Mark Ridling of The Housewash Company learned there was a way to delay his provisional tax payment due date for several months to relieve his cashflow, he was initially sceptical.
He hesitated to pay his tax through somebody other than IRD.
But once he tried using Tax Finance through Tax Management NZ (TMNZ), he discovered it was a brilliant solution to a problem.
“I was concerned that if I paid my taxes to a third party, I might later discover my hard earned dollars would go into some bank account in the Bahamas, never to be found again. Meanwhile, IRD would be hunting me down like a Fox Terrier on the rat to pay my tax a second time.”
The Housewash Company is the largest specialist house wash company in Auckland with a client base of around 9000 which generates a sizeable income. But that income is quite seasonal with highs and lows throughout the year.
“In spring, when everybody wants their house washed, we almost triple our revenue from the dark depths of winter. And summer is somewhere in between. So we’re awash with money in the spring and in winter, we struggle. When our accountant mentioned the service, I thought, of course, it’s brilliant.”
When Mark’s accountant told him about Tax FINANCE (a service available through TMNZ), he decided to give it a go.
Once he’d tried it, he was impressed.
“Tax FINANCE is great,” he exclaims. “It’s a no-risk situation. The fact you’ve got the monkey off your back – you feel as if you have more control over your cashflow.”
Mark simply paid a small upfront fee to TMNZ to defer paying his provisional tax for several months over winter and he paid TMNZ the full amount later in spring when the revenue was available.
The fee TMNZ charged for this convenient arrangement with IRD was much lower than what he would have been charged had he obtained a bank overdraft or unsecured loan. And no credit approvals were required. Using Tax Finance, he also avoided the IRD’s high use of money interest and late payment penalties.
Mark was amazed at how simple Tax FINANCE was to organise. “I was also surprised at the level of service I got. Even though the amount of provisional tax I pay is insignificant compared to some of the big corporates, I always have a good response from TMNZ. To sum up, it’s a great service and I will certainly recommend it to others. I have already done so.”
Daniel Relf, TMNZ Head of Client Services adds: “Thousands of businesses have benefited from using Tax FINANCE. If you have cashflow constraints or you feel your money could be best invested somewhere else in the business – and you’d like to shift your payment dates, please give us a call on 0800 829 888 and we’ll get back to you with a competitive quote.”