Take the sting out of underpaid 2015 income tax

Take the sting out of underpaid 2015 income tax

Take the sting out of underpaid 2015 income tax Lee Stace

Woman frightened by taxesFind out how to eliminate IRD late payment penalties and reduce interest costs if you have not paid enough income tax.

There is a method approved by Inland Revenue (IRD) that can ease the financial pressure on cashflow if the taxman has charged you late payment penalties and interest on underpaid 2015 income tax.

It’s called tax pooling, and it allows you to purchase backdated provisional tax if you have not paid enough for the current tax year or the one just completed.

Paying tax through Tax Management NZ (TMNZ) eliminates IRD late payment penalties and reduces interest costs by up to 30 percent, without having to negotiate with IRD.

The payment you make to TMNZ is effectively a purchase of tax previously paid into the TMNZ IRD tax pool account on the original date it was due. As this tax was date-stamped, it is therefore treated as paid on time by you once IRD processes the transfer from the TMNZ tax pool account to your own IRD account.

TMNZ also gives you the option to chip away at what you owe via flexible monthly instalments that let you pay what you can, when you can.

By using TMNZ, you get an extension of 75 days after your terminal tax date to purchase the income tax you need to settle your bill with IRD.

TMNZ is registered with IRD. All payments made to TMNZ are made into bank account administered by an independent trustee, Guardian Trust, which also oversees funds held in the tax pool account.

Feel free to talk with your accountant for more information.