Every business owner at one point has felt the tension between paying provisional tax versus withholding enough money to pay employees. When profit fluctuates year-on-year, it causes cashflow issues that force business owners to make some pretty hard decisions.
“If we don’t have to pay our tax straight away and we can alleviate that for a week or two then that makes a huge difference,” he says.
“We had a really good growth period and quite a good profit margin at the end of the year, but the following year we had quite a tough year where we didn’t actually make a profit – but we still had to pay our provisional tax which was a huge cost on top of paying our normal taxes and also paying our employees and doing all their tax et cetera, so we had a big cashflow issue.”
Watch the video below to hear more on how Tax Management NZ have helped Adroit Builders to stay in the good books with IRD.