Barbers and Merchants owner Josh Monaghan has a message for provisional taxpayers contemplating entering an IRD payment plan: There’s a better option.
It’s Tax Management NZ (TMNZ) – and it’s who he turns to when needing more time to pay his provisional tax.
Like many small businesses owners, managing Barbers and Merchants’ cashflow can be tough for Josh.
That creates an obstacle to settle tax obligations on the dates prescribed by IRD. Usurious interest of 8.22 percent and late payment penalties are the consequence of not paying on time.
It’s unfair for compliant taxpayers who have every intention of paying what they owe but require extra time to get the money together.
Granted, the taxman’s not entirely heartless. Contact them before tax is due and they’ll afford you the opportunity to enter an IRD payment plan.
Sounds good, but there’s a catch.
As part of this process, taxpayers need to supply financial information and details about how and when they will pay the tax due. IRD interest still applies if a taxpayer strikes an arrangement with IRD.
“It’s very stressful. Most people don’t really want to have to deal with the IRD, if you know what I mean. It’s always easier if you have the money there so you can pay on time, but having to contact them to sort out an arrangement can be quite troublesome,” says Josh.
“They can be tricky to deal with.”
How TMNZ differs from an IRD payment plan
Compare that to TMNZ.
Its provisional tax payment plans trim IRD interest costs by up to 30 percent and eliminate late payment penalties.
You can defer upcoming payments to a later date. You can also pay off what you owe over a longer period in instalments.
Josh says the additional time to pay provisional tax “takes a big weight off your mind” when cashflow’s tight.
But he’s also happy with the prompt service he receives from TMNZ.
“Every time I have used you guys it’s been perfect.”
It was a Google search which alerted Josh to TMNZ. Now he’s spreading the message to his customers when using his trusty scissors and trimmer to give them a haircut they can set their watches to.
“It comes up in conversation around tax time with other tradies when they come into the shop. I’ve told people about you guys and how you can help.”
About Barbers and Merchants
Barbers and Merchants is a small, independent neighbourhood barbers based in Birkenhead on Auckland’s North Shore. Its approach to styling and grooming is “vintage with a twist”, according to its website.
They’re busy when the weather is nicer. Business cools slightly when the mercury drops a few degrees.
“You get a bit of a boost [in summer]. People have more events to go to like work functions and that kind of jazz. We’re established enough now that the drop in winter is not huge, but people do tend to get their hair cut a little bit less,” says Josh.
“It does make it a bit tricky managing cashflow.”
Cutting hair aside, Barbers and Merchants also offer hot towel shaves and sell various men’s hair products and shaving supplies.
Josh has been running the business for five years. He employs a contractor to assist him.
If you wish to learn more about how Tax Management NZ helps businesses match their provisional tax payments to when they earn their income, email email@example.com or phone 0800 829 888.