Three ways TMNZ’s tax finance solution has supported NZ business success

Since 2003, TMNZ has helped over 25,000 Kiwi businesses to improve cashflow, through our provisional tax solutions. And in the current market conditions, it’s no surprise that we’re experiencing increased demand from businesses looking to finance their 15 January tax payments. Here we cover three different ways, three different businesses have benefited from financing their tax payments through us.  

To find out how tax finance can solve your cashflow challenges this summer, learn more here.

 

Smarter savings in the hospitality industry  

The situation

A local hospitality equipment supplier found themselves in an exciting position. As an importer of specialized restaurant equipment, they noticed a significant shift in currency exchange rates that made their European supplier's products much more affordable than usual.

The challenge

While the timing presented a perfect opportunity to acquire high-quality equipment at reduced prices, the business faced a common dilemma. Their provisional tax payment was due soon, and the funds they had set aside for it were exactly what they needed to secure this advantageous deal. It was a situation many business owners face - having to choose between meeting tax obligations and capitalizing on business opportunities.

The solution

Rather than missing out on the opportunity, the business discovered a practical solution through TMNZ. Their approach was straightforward, they partnered with TMNZ to arrange a deferred payment plan for their provisional tax. They utilised their tax payment funds to purchase the discounted equipment and maintained compliance with Inland Revenue while pursuing business growth. 

The Results

The strategy proved successful on multiple fronts, they: 

  • acquired high-quality equipment at below-market prices 
  • maintained healthy cashflow despite the significant purchase 
  • increased their profit margins on future equipment sales 
  • kept their tax obligations in order without penalties 
  • and enhanced their competitive position in the market. 

Your key takeaway

While many small business owners view tax payments as inflexible deadlines, this case demonstrates how working with TMNZ can help manage tax obligations while seizing time-sensitive business opportunities that enhance profitability.

 

Scaling up in the transport industry

The situation

A transport business landed a fantastic opportunity - a contract supporting a major infrastructure project that could take their company to the next level.

The challenge

The timing created a cashflow squeeze. While winning the infrastructure contract was a milestone achievement, the business needed to expand their trucking fleet immediately to fulfill the contract requirements. Like many small businesses experiencing growth, they had funds set aside for their provisional tax payment but needed that same cash to fund their expansion.

The solution

The business owner took a strategic approach to managing this opportunity and partnered with TMNZ to defer their tax payment for 12 months. They used their provisional tax funds to purchase an additional truck and started servicing the new contract immediately with their expanded fleet. 

The results

This decision generated multiple benefits, where the business: 

  • secured and began working on the valuable infrastructure contract 
  • increased their fleet capacity and revenue potential 
  • generated immediate positive cashflow from the new truck 
  • maintained good standing with Inland Revenue 
  • spread their tax payment over a more manageable timeframe. 

Your key takeaway

Small business growth often requires making quick decisions when opportunities arise. This case shows how flexible tax payment arrangements can help business owners invest in growth while managing their tax obligations responsibly.

 

Supporting cashflow over summer in the electronics industry

The situation

A small electronics distribution company faced a common seasonal business challenge. Like many businesses in their industry, they traditionally closed their operations during the Christmas period through mid-January, aligning with their major clients' shutdown periods. 

The challenge

The holiday season created multiple financial pressures, like zero revenue during the extended Christmas closure. Staff holiday pay obligations were due during this period, and income tax and GST payments were due on 15 January. The business owner was worried about not being able to fully enjoy their family holiday due to financial stress. 

The solution

The business owner took proactive steps to manage their seasonal cashflow, and Connected with TMNZ in December. The owner recognized the recurring nature of their holiday season squeeze, and decided that from now on, they would arrange to defer their 15 January income tax payment until April. This maintained their GST compliance while managing cashflow in a smarter way.

The results 

This strategic approach delivered both financial and personal benefits, where the owner: 

  • balanced their holiday season expenses without depleting cash reserves 
  • maintained staff satisfaction with timely holiday pay 
  • shifted tax payments to align with their stronger cashflow period 
  • enjoyed stress-free family time at the beach 
  • started the new year in a stronger financial position.

Your key takeaway

Many seasonal businesses face predictable cashflow challenges during holiday periods. This case demonstrates how planning ahead and using flexible tax payment arrangements can help business owners manage their obligations while maintaining work-life balance during crucial family times. 

 

For more on how our tax finance solutions can help your business, go here.


How to manage cashflow over Christmas

Everyone loves the middle of summer and spending time with family and friends over Christmas, but it can be a challenging time of year for many small and medium-sized Kiwi businesses.

According to a poll conducted by the Employers and Manufacturers’ Association, more than half of businesses experience cashflow constraints between January and March.

It’s hardly surprising. The period after Christmas is traditionally slow for many companies, with people away enjoying their holidays. Consumers also tend to reduce spending after the expensive Christmas and New Year period.

Businesses can come under pressure for a number of reasons. Earnings will be down if companies shut over the break, while others will feel the pinch if they have paid bonuses before the end of the year.

Considering these facts, it’s understandable that many businesses struggle to manage cashflow and make provisional tax payments on 15 January every year.

Unfortunately, Inland Revenue (IR) doesn’t factor in these seasonal challenges. IR charges taxpayers 5.04% late payment penalties and 10.91% use of money interest (UOMI) if tax is not received on the due date (as at November 2024).

Your options for managing cashflow

What are the best options for businesses that want to manage cashflow and free-up money over the summer?

Tax pooling is IR-approved and can be used to defer provisional tax payments to a time that suits the taxpayer without incurring late payment penalties and UOMI.

This method is cheaper than using many traditional forms of finance. And tax pooling doesn’t affect existing lines of credit. Also, no credit checks or security are required.

The full amount of finance doesn’t need to be paid back if less tax is owed than first thought. The finance arrangement can be easily extended as well.

How tax pooling can help

Say you want to defer a $5,000 provisional tax payment for six months. You would pay TMNZ a one-off, tax-deductible interest amount and TMNZ would arrange the $5,000 provisional tax payment on your behalf.

The interest amount is based on the amount of tax financed and the period of maturity, so in this instance, ​it would be roughly $205.

The provisional tax payment is held in an IR account administered by the Guardian Trust. Guardian Trust instructs the IR to transfer the tax into your IR account when you repay the $5,000 principal in six months’ time.

The IR treats the $5,000 provisional tax as being paid on time once the transfer is processed. It’s that simple.

Ready to ease your seasonal cashflow worries? Learn more about our tax finance options today.

Find our latest resources on tax pooling and calculating tax using the Standard Uplift method here.


Are you in a tight spot with your company tax?

Fibre Cement Solutions Ltd is a family-run business, owned by Rachel Osborn and Graeme Zimmerman, who bring 25 years of construction industry experience with them. As a leading supplier of fibre cement board in New Zealand, they work with several construction partners across the country and after expanding, they have distribution centres in both Auckland and Christchurch.

A few years into business, Rachel, who managed the finances of Fibre Cement Solutions, found herself in a tight spot. It was the middle of COVID-19, and she hadn’t been advised of their upcoming tax liabilities and deadlines. Like many smaller businesses, especially those in the construction industry, the business was experiencing fluctuating cashflow, despite in their case, fantastic growth. As a result, Rachel found herself struggling to pay the unexpected company tax on time, now facing the risk of hefty penalty from Inland Revenue (IR).

Her new accountant suggested she look into tax pooling and made the introduction to Tax Management New Zealand (TMNZ).

And that’s where TMNZ stepped into help.

TMNZ can work directly with any business (or with their accountant) to find a better solution for provisional tax.

Rachel contacted TMNZ to sign up to their IR-approved service, which gives businesses up to 22 months to pay their company tax without incurring heavy penalties. TMNZ provided Rachel with flexible payment options, charging only a small interest fee for the service, much smaller than IR or bank interest rates. And when her tax payments were made, TMNZ transferred these to IR, as date-stamped payments. Job done.

Rachel's flexible payment plan with TMNZ allowed her to make payments on dates that suited the business’ cashflow, and payment amounts that worked for her budget. This solution allowed the business to stay compliant with IR regulations, avoid fees, and manage tax obligations in a way that better suited the business. Meaning Fibre Cement Solutions could continue to pay staff, meet sales targets and continue to grow.

After her initial positive experience with TMNZ, Rachel now monitors the company's financial position monthly. She loves the option to pay TMNZ instead of Inland Revenue directly, allowing her to reinvest funds into the business for growth. Rachel says:

“If you are ever in a tight spot re paying your company tax like we were, there is an incredible solution that TMNZ offer… It is so flexible and user friendly and keeps you out of trouble with the IRD!”

“The Team at TMNZ are extremely friendly and can explain tax in layman's terms which I really loved. I cannot recommend them highly enough”

To learn more about how TMNZ can help your business manage tax payments and gain cashflow flexibility, contact one of our friendly team members here or speak with your accountant about setting up a flexible cashflow arrangement allowing you to choose when you pay your tax.


Top ten financial benefits of tax pooling for larger businesses

Corporate businesses with June balance dates will be aware of the 28 November provisional tax deadline fast approaching.

So, now’s the perfect time to start thinking about using tax pooling – not just to save on Inland Revenue interest and reduce risk, but also as a strategic financial tool for competitive advantage.

If you’re new to tax pooling, it’s worth knowing that it’s an Inland Revenue approved system to help New Zealand businesses better manage their provisional tax. Tax pooling has been around since 2003 and since then TMNZ has helped over 130,000 taxpayers to save more than $520 million, with our flexible and innovative tax payment solutions.

Essentially, tax pooling turns a fixed tax obligation into a flexible financial instrument, giving your company more control over its tax strategy and cashflow management.

Specifically for larger businesses with complex tax obligations, there are many strategic financial benefits. Here we’ve summarised our top ten positive impacts of tax pooling:

  1. Cost savings: Large businesses often have significant tax liabilities. Tax pooling can lead to considerable savings on Inland Revenue interest and penalties. Savings for some big New Zealand businesses are in the hundreds of thousands of dollars annually. Plus, businesses can even earn more on any overpaid tax.
  2. Working capital optimisation: Tax pooling allows businesses to retain large sums of working capital for longer periods, which can be strategically deployed for investments, acquisitions, or other high-return activities.
  3. Risk management: Large businesses face complex tax risks. Tax pooling can be an effective tool in an overall tax risk management strategy, providing protection against unexpected liabilities, reassessments, and penalties.
  4. Compliance benefits: Tax pooling can help maintain compliance across complex tax structures and simplify tax management processes.
  5. Reporting advantages: With tax pooling, businesses can improve financial reporting by providing more predictable tax expenses and potentially enhancing key financial ratios.
  6. Market considerations: For businesses heavily impacted by fluctuating markets, tax pooling can be beneficial for dealing with interest rate fluctuations, by allowing businesses to lock in rates in advance.
  7. Tailored arrangements: With a business’s specific tax situation in mind, tax payments can be structured around unique cashflows, rather than Inland Revenue's standard dates. This flexibility gives more control over funds - from earning higher interest on overpayments to accessing funds as a fee-free line of credit or carrying them forward to future years.
  8. Direct integration: TMNZ is directly integrated with Inland Revenue, providing certainty and security around sensitive tax information.
  9. Scalability and growth: Tax pooling solutions can scale with a business’s growth and adapt to changing tax landscapes.
  10. Personal support: Our expert team of Chartered Accountants, tax lawyers and customer success specialists are on hand to provide you with personal support and guidance, when you need it.

Whatever your tax position - whether you're looking to earn more interest on overpayments, need payment flexibility and want to avoid expensive banking facilities - tax pooling offers more control and better financial outcomes than paying IR directly.

Contact our team to discuss how these benefits apply to your business and to develop a tailored arrangement before the upcoming provisional tax deadline.


Reducing risk: 28 October provisional tax

The current market conditions are making it even trickier to work out how much provisional tax to pay, not to mention finding the funds to pay it. That’s why, with 28 October approaching, we’re going to offer some ways to reduce your risk in this uncertain environment.

TMNZ offers options to defer this payment for up to 19 months – without having to worry about any nasty consequence from Inland Revenue (IR). We also look at the pros and cons of the respective options available to calculate your payment.

For taxpayers with a 31 March balance date who file their GST returns every six months, 28 October will be the first of two provisional tax instalments payable for the 2024-25 income year. It is also the first of three instalments payable for those with a 31 May year-end who file their GST returns monthly or every two months. This makes it a major payment date for many businesses in the agricultural sector.  

What should you pay?

While working out the liability to the exact cent is far from easy – even at the best of times – it does not change the fact you generally have two options when it comes to calculating your provisional tax payments. They are:

  • Pay based on an uplift of an income tax liability from a previous year. This is known as using the standard uplift method.
  • Pay based on your current expectation of profitability for the 2024-25 income year.

Paying based on an uplift of a prior year

If you travel down this route, the provisional tax payable for the 2024-25 income year will be based on either:

  • Your 2024 income tax liability plus five percent; or
  • Your 2023 income tax liability plus 10 percent (if your accountant has not filed your 2024 tax return and does not legally have to do so until 31 March 2025).

The benefit of paying uplift means you will not incur IR interest (UOMI) – from 28 October 2024 if it turns out you have not paid enough provisional tax to satisfy the liability for the year.

Given this is the date which carries the longest exposure to UOMI, sticking with uplift may be a sound insurance policy if you feel a similar result to last year is on the cards or want to play it safe in this uncertain environment to ensure you are not caught short later if business picks up down the track. And besides, if things turn to custard, you can always revise your payment downwards later to account for any overpayment on 28 October once the picture starts to become clearer.

However, the downside of paying on uplift means you may end up making a provisional tax payment that is not reflective of your current earnings (or more than your expected profitability for the year). From a cashflow perspective, that can be problematic as generally you will not be able to get your overpaid tax back from IR until after you have filed your 2024-25 income tax return.

Paying based on forecast profitability

Indeed, there’s no denying many New Zealand businesses have been doing it tough and are forecasting lower profits.  As such, you may be considering making a payment on 28 October that is more in line with how you are currently performing – especially if your business earnings have been significantly impacted.

On plus side, you won’t be paying any more provisional tax than you need to if you choose to do this. That will certainly offer a cashflow benefit by allowing you to keep money in your business.

You can always revise payments upward or downward depending on how everything unfolds. However, it means you run the risk of incurring UOMI from 28 October 2024 if you experience a sudden or late upswing in profitability during the backend of the 2024-25 income year and provisional tax paid on this dates turns out to be less than the amount required. That said, there is a way to reduce the interest cost on underpaid tax. More on that shortly.

Do you need to file an estimate with IR to pay less than uplift?

We get this question a lot. You do not need to file an estimate with IRD if you plan on paying provisional tax based on your expected profitability for the 2024-25 income year. There is no legislative requirement to do so. Just make your payment on 28 October as you see fit.

Tax pooling can help if you cannot pay, or it turns out you have not paid enough

No matter the basis you utilise to calculate your 28 October payment, IR-approved TMNZ can offer some assistance, with payment options for taxpayers who:

  • Do not or cannot make their payment on the prescribed IR payment date.
  • Want to eliminate IR interest and late payment penalties if they underpay their tax.

Pay 28 October provisional tax when it suits you

Where preserving cash is of primary importance, you can use TMNZ to defer an upcoming provisional tax payment for up to 19 months, without facing UOMI and late payment penalties.

TMNZ will make a payment to IR on your behalf on 28 October. You then pay TMNZ later. This can be once the liability for the 2024-25 income year is known or when your cashflow situation improves. The amount owed can also be paid in instalments.

You would have until mid-June 2026 to pay what you owe with Flexitax if you have a 7 April terminal tax date. Check with your accountant if you are unsure what your terminal tax date is. There is some interest to pay to TMNZ – but this is significantly cheaper than IRD’s UOMI rate.

Reduce the cost of underpaid tax

Tax pooling is not just for those who are struggling to pay IR on time.

Where forecasting profitability for the 2024-25 income year is proving challenging or you would simply prefer to make your provisional tax payments based on how your business is performing by reviewing your position at each instalment date, you can rest easy knowing that TMNZ can help in the event you get your payments wrong and wind up with additional tax to pay. That’s because you can use TMNZ to make significant savings on the IR interest cost you face and wipe late payment penalties when you underpay tax.

How? TMNZ lets you apply provisional tax that was originally paid to the tax department on the date(s) it was due against your liability. As such, IR treats it as if you paid on time once it processes this tax pooling transaction. This eliminates any late payment penalties. You have up to 75 days from your terminal tax date for the 2024-25 income year to pay any underpaid provisional tax with TMNZ. It’s a useful option to pull out of your back pocket once you determine your actual position and file your return. The savings TMNZ offers on underpaid tax can be significant.

Speak with your accountant

As always, we recommend you speak with and direct any questions you have about your 28 October provisional tax payment to your accountant. If you don’t have an accountant, check out the directory of firms that TMNZ works alongside. You can filter this list by specialist topic or search for a tax agent in your region.


A confident woman smiles at the camera | TMNZ Tax Finance

Tax Finance: An alternative funding source

Growing a business is hard yakka. More specifically, it costs money.

And therein lies a problem for many small business owners: Cashflow. In fact, it’s not a problem. It’s a major problem. According to Xero’s Small Business Insights, New Zealand business sales fell by over 8% for the year ending June 2024.

Now granted, there are several choices available when it comes to accessing funds you need to. A bank loan, overdraft, credit card and an unsecured loan are just some.

But again, it’s not that simple. There can be a few hoops to jump through as part of the approval process and you will likely have to use assets as collateral, often using your personal house (or the house of a shareholder, for example) as security to get a lower cost of funds. If there is no approval or credit review process, then chances are you will be up for double-digit interest rates. Ouch.

However, there is another option. It’s one you probably have not heard about either.

The other option – Tax Finance

Did you know that your provisional tax payments are also a source of finance? Yes, that’s right – provisional tax. That thing many small business owners loathe paying. That thing that places undue pressure on, you guessed it, cashflow.

Allow us to explain.

An IR-approved tax pooling provider such as TMNZ offers a payment option known as Tax Finance. It lets you free up working capital by deferring a provisional tax payment to a later date, without incurring Inland Revenue (IR) interest of 10.91% (as at 7 August 2024) and late payment penalties.

For an upfront finance fee, you can choose a time in the future you wish to pay what you owe. Essentially, this allows you to use the money you have set aside for income tax more productively.

The finance fee or interest you pay to TMNZ is:

  1. similar to the interest rate charged by a bank for a residential mortgage; and
  2. tax-deductible.

So, you could also use the money set aside to repay your mortgage earlier, thereby reducing non-deductible interest costs charged by the banks on your personal house. The cost of Tax Finance is cheaper than using your business overdraft or an unsecured loan. Approval is guaranteed. Moreover, you do not have to provide any security.

Even better, if you already have paid tax deposits into the TMNZ tax pool, you can finance them back out while keeping the original tax date. We call this Tax Drawdown.

Altogether, this effectively treats your tax payments with the TMNZ tax pool as a revolving credit facility.

Who might Tax Finance suit?

Tax Finance will suit those who:

  • are looking for funding that does not affect other lines of credit or their General Security Agreement with their bank
  • want to keep headroom in their existing lending facilities
  • do not wish to go through the rigmarole of the normal lending process
  • want a fixed interest cost
  • feel there is more to gain financially from being able to keep money in their business instead of paying income tax.

How much does Tax Finance cost?

It depends. The finance fee is based on the amount of tax due and the future date you wish to pay.

As mentioned above, the TMNZ finance fees are similar to the home loan mortgage interest rates charged by banks.

For instance, at current rates¹ it only costs $335 to defer a $10,000 provisional tax payment for six months. That works out to be approximately 6.70%pa².

How does Tax Finance work?

Here's how Tax Finance works in a nutshell:

  1. Ahead of your provisional tax payment date, you tell TMNZ the amount of tax you want to finance, the future date you want to finance that to (e.g., the date you think you may be able to pay the tax amount) and pay the finance fee based on the quote TMNZ provides. TMNZ arranges for a bank to make a payment for you in its tax pool account at IR on the provisional tax date. This payment is date-stamped.
  2. At the agreed upon future date (known as the maturity date), you have a few options:
    • settle the full tax amount by paying TMNZ; or
    • roll over the financed amount for another period of time – in this case you can get a quote for a further finance fee to pay based on how long you want to finance for;
    • settle part of the financed tax and roll over the remaining part;
    • settle only the amount you need (if your actual tax liability has reduced).
  3. Upon settlement of the financed tax, ownership of the tax deposit made by the bank changes to become owned by you and sits in your tax pooling account with TMNZ. You can then request TMNZ to transfer the tax payment it is holding on your behalf to your IR account to clear your tax liability. Once they’ve processed the transfer, IR treats this tax amount as if the tax was paid on your original provisional tax date. It will also reverse any interest and late payment penalties showing on your account.

In the event you choose the fourth bullet in step 2 above, there is no obligation on you for the remaining financed tax (even if you decide to not settle any of the financed tax). You can simply walk away, no questions asked. Or you can ask us to try and sell the residual unused financed amount for you and earn you some interest return, effectively getting some of your finance fee back.

 

TMNZ offers a competitive rate for Tax Finance. For more information, get in touch.

 

¹ At at August 2024

² The published ANZ 6 month residential mortgage rate as at 7 August 2024 is 6.99%pa if you have at least 80% LVR.


Accountant planning

Five top tips for paying 28 August provisional tax

Are you due to pay 28 August provisional tax?

For many businesses, this will be their first instalment of provisional tax for the 2025 tax year. It’s important to stump up what you owe on this date. Inland Revenue (IR) won’t hesitate to charge steep interest and late payment penalties if you don’t.

If you’re a business owner or operator, here are five useful tips to ensure you’re ready to pay 28 August provisional tax. For agents, you may also wish to share these tips with your clients to help them prepare.

1. Assess your cashflow

Now’s the time to look at the money coming in and going out of your business.

Cast your eyes over your accounts receivable report to see which customers owe you money. If required, ask them if they can sort their bill earlier. Conversely, see if you can buy more time if you owe suppliers money.

If cashflow is tight or you have a better use for the money, keep reading. There’s an option that lets you pay 28 August provisional tax when it suits you.

2. Be aware of the changes

If you’re a safe harbour taxpayer, be aware that despite the rule changes, IR will still charge LPPs at each payment date. You can find out more about the changes here.

3. Know your methods to calculate 28 August provisional tax

It’s important you are aware of the different methods available to calculate your provisional tax payments. For more information about the provisional tax methods available to you, see our Provisional Tax Guide.

4. Consider using tax pooling

An IR-approved tax pooling intermediary such as TMNZ can assist if cashflow is tight. Working with us allows you to pay 28 August provisional tax at a time and in a manner that suits you, without incurring late payment penalties. You can defer the full payment to a date in the future or pay off what’s due in instalments.

Paying via TMNZ also means significant savings on Inland Revenue use of money interest.

TMNZ holds date-stamped tax for you in its IR account. You pay TMNZ at the agreed future date or as and when it suits your cashflow.

5. If in doubt, consult a professional

Do you have any questions about 28 August provisional tax? Seek the advice of an accountant or tax advisor. They can determine the best provisional tax calculation for your business and help you manage your payments and cashflow.

If you wish to learn more about the provisional tax payment flexibility TMNZ offers businesses, get in touch

Information in this article is correct as at 30/7/24. You should consult with your tax advisor concerning all tax matters. Read our Terms and conditions.


A businesswoman using TMNZ tax pooling for cashflow flexibility

TMNZ: The ultimate cashflow flexibility tool for your business

In tough economic times, it can be hard for businesses to stay on top of cashflow and juggle their tax liabilities. For companies and sole traders dealing with fluctuating cashflow and provisional tax headaches, there’s an easier way to manage your obligations—tax pooling.

Did you know TMNZ’s tax pool can help you manage your tax by matching your cashflow forecasts with your provisional tax payments? And you can use tax pool deposits as an alternative funding source when cashflow is tight.

How we can help

TMNZ is an Inland Revenue (IR)-approved tax pooling provider, meaning you can use us to pay income tax on your behalf at a time that suits you. We offer greater flexibility over how and when you pay provisional tax.

First, you’ll need to think about your cashflow forecast. If you’re unsure how to put one together, read our cashflow management guide.

Once you’ve got your cashflow projection, we can work together to figure out the best time to pay your provisional tax. From there, all you need to do is tell us your tax amount owed, the date it is due, and how you would like to pay.

When your tax bill arrives, we’ll transfer the amount required to IR on your behalf as a time-stamped payment. IR will treat your tax as if it was paid on time, eliminating the risk of being charged interest or late payment fees. Simple.

A working capital solution

TMNZ’s payments to IR mean you can keep money in your business and use it at the times of the year you’ll need it most. You can top up your payments later into our tax pool at any time.

Tax pooling is a perfect solution for businesses worried about future cashflow and looming obligations. By partnering up with us, you’ll have total control over your tax bill, rather than working around IR’s strict deadlines.

With no more late fees and interest charges from IR to think about, you can get on with running your business. There will be no need to scrape together funds in the middle of holidays or quiet periods to meet IR’s deadlines.

TMNZ can also save you money by avoiding penalties and interest charges if you’ve missed or underpaid tax. We charge much lower interest rates than the penalties imposed by IR if you’re overdue.

We're a line of credit

Another amazing TMNZ feature is that we can be a line of credit for your business.

If you’ve deposited funds into our tax pool but find yourself short on cash, you can withdraw that money whenever you want to use it as working capital.

If you’ve paid provisional tax into our pool, you’ll have access to a working capital facility up to the value of your deposit. This provides even more flexibility for you and your team to get through a cash crunch and stay on top of debt management.

We can offer much cheaper interest rates than bank loans, overdrafts, or unsecured loans, meaning money withdrawn from our pool is better for you and your business, putting you in a stronger position at the end of the year.

Ready to learn more about the benefits of tax pooling?

Download our guide to Better Cashflow Management for top tips on managing cashflow throughout the financial year.

If you’re ready to take control of your tax and gain access to a valuable line of credit for your business, find out more at by reading our Tax Pooling 101 page to learn more about the full range of benefits of being in our pool.

Then talk to your tax adviser about TMNZ tax pooling to take away your tax management worries.


NZ business owner paying provisional tax with TMNZ

How TMNZ tech takes the pain out of tax

As New Zealand’s first ever tax pool, we’re proud of our long history of innovation. It’s at the heart of everything we do, and we’re always looking for new ways to simplify tax.

Technology has been at the forefront of our efforts, whether it’s rolling out new features for our customers, adding new functionality online, or partnering with forward-thinking digital platforms.

Recently, we’ve rolled out some amazing tools to help our customers and their accountants easily manage income tax.

Discover our top tech solutions to help you take the pain out of tax time, including tools to cut down on admin, share data between platforms, and get instant information on things like tax swaps.

Direct Inland Revenue Integration

TMNZ’s online dashboard is fully integrated with Inland Revenue (IR), meaning taxpayer information held by IR can be seamlessly shared on our platform, to make accountants lives easier.

In the past, accountants had to deal with multiple systems and spreadsheets to find accurate IR information. Integration means this admin work is no longer required.

Inland Revenue and TMNZ systems are directly connected so that key IR information is automatically populated on our dashboard. All relevant IR data, including Residual Income Tax figures, filing dates, and direct IR transactions appear on the TMNZ dashboard once you’ve logged in.

Thanks to IR integration, accountants can save time and reduce admin work. Direct IR integration also removes the risk of manual errors as clients populate information from one platform to another, making the process much more efficient.

IR information is fed into our calculator to help you determine your (or your client’s) tax position as quickly as possible.

Kathleen Payne, Partnerships Director at TMNZ, says:

“Following IR integration, all the data you need for your calculations goes straight onto our dashboard. All you have to do is put in the current year’s position that IR might not know yet, and everything is calculated without further data entry.”

If clients need any assistance with our direct IR integration, then TMNZ's friendly support team is on hand to help.  And you can find out more about IR integration here.

Taxlab integration

Our systems are also fully integrated with Taxlab, the cloud-based tax software system designed specifically for New Zealand accountants.

Taxlab integration is easy to set up and use. Once you’ve completed the process, TMNZ transactions will appear on the Taxlab platform. Clients no longer need to use different systems to calculate their tax position.

“Accountants will get a complete picture of all TMNZ transactions sitting against their clients’ tax year,” Kathleen says.

Like IR integration, the setup couldn’t be simpler:

  • log in to Taxlab, go to ‘Settings’, and add TMNZ as a connection
  • you’ll then be directed to TMNZ to log in and confirm
  • from there, you’ll be able to view TMNZ tax pooling information, including a full history of purchases, deposits, transfers, and tax payments.

Integration with Taxlab reduces the time and effort spent sharing information across the two platforms, giving tax agents even more time for their valuable client work.

Kathleen Payne, TMNZ Director of Strategic Partnerships
Kathleen Payne, TMNZ Partnership Director, discusses tax technology

Group Optimiser

If you’re a busy accountant in public practice looking to manage the tax year for groups of clients, TMNZ’s Group Optimiser tool is tailor-made for you.

This innovative feature enables accountants to calculate the position of several taxpayers and create multiple transactions at once.

Used alongside IR integration, Group Optimiser can make tax calculations even simpler.

Kathleen adds:

“Instead of having to prepare spreadsheets for each member in a group and then decide who has overpaid or underpaid tax, agents can use our calculator to enter a small amount of information. Then, at the click of a button, Group Optimiser calculates how to use the tax across the group in the most effective way.”

Group Optimser is ready and waiting on the TMNZ dashboard. All you need to do is log in.

Upcoming Deadlines

The Upcoming Deadlines function on the TMNZ dashboard is another of our top tech features.

For accountants managing several tax pooling clients, the Upcoming Deadlines feature can be used to track taxpayers ahead of key dates.

Offering total visibility over client tax positions as deadlines approach, the tool suggests prompts and actions to finalise the year.

“It also gives accountants a control list to work through their clients and ensure everything has been finalised,” Kathleen says. “It’s a workflow and control function and will remind advisers about everything they need to do for their clients.”

Automated Tax Swaps

TMNZ’s automated Tax Swaps is our latest dashboard feature, enabling clients to get instant quotes and process swaps below the threshold*.

Tax Swaps allow clients to even out their provisional tax payments if they have overpaid on one date and underpaid on another, saving on IR interest costs.

With our automated Tax Swap service, clients will benefit from faster, more efficient processing

The best part? The Tax Swap function is DIY.

“It’s a self-service system,” Kathleen explains. “If a client knows the swap they want to do, our system will automatically say, ‘Yes, you can do it, and this is the interest you’ll get’. You won’t have to interact with us at TMNZ. You can do-it-yourself.”

“It’s super efficient,” she adds. “Clients will have certainty of the outcome, they’ll know how much interest they’ll have to pay, or what they can earn, in an instant.

“At TMNZ, we’re all about flexibility, and empowering our customers to make decisions at a time that suits them.”

Automated Tax Swaps launched recently, following our pilot with TMNZ's Early Adopter community in April.

Become an Early Adopter

Are you part of TMNZ’s Early Adopter community, who gets first access to all our latest tech features?

Early Adopters enjoy the benefits of our new products and enhancements before anyone else, with support and training to help you make the most of new tools.

As an Early Adopter, you can share feedback and experiences to help us develop the best tech possible for accountants and clients.

“We love working with people to create the best tax solutions possible,” Kathleen adds. “Our Early Adopters are highly motivated, creative people who want to help us get even better.”

If you’re a tech savvy tax pooling user in an accounting firm, become an Early Adopter in a few simple steps:

  1. login to your dashboard
  2. Select your firm
  3. select ‘Early Adopter Programme’, from the left-hand menu
  4. review and accept the Terms and Conditions presented
  5. click the ‘Sign up’ button.

To learn more about TMNZ’s latest tech developments, head to our Innovative Tax Technology page or contact our support team today.

 

*the threshold is subject to change depending on market conditions.


Missed your latest provisional tax payment? How you can find relief

If you own a business, you’re probably familiar with paying provisional tax. Which means you’re also familiar with its inflexibility, and the penalties and interest that accumulate if you miss a provisional tax due date.

The problem with this model is how it affects your cashflow. You need money to pay staff, cover operational expenses, and invest in growth initiatives, yet it’s tied up in saving for tax time. Or worse yet, in shelling out for Inland Revenue (IR) interest and penalties on late payments.

No matter which camp you’re in, there is relief and it’s called tax pooling.

If you own a business, then you can benefit from tax pooling. Let us explain how.

First, what happens if I miss my provisional tax payment?

If you’ve paid taxes late or haven’t paid enough by the provisional tax due date, IR may charge penalties or interest on your unpaid amount as follows:

  • A 1% late payment penalty is charged on the day after the due date
  • An additional 4% penalty is charged seven days after the due date — including late payment penalties (LPP)
  • UOMI may be charged from the day after the due date – UOMI will be charged daily until you have paid your total tax amount, including late payment penalties and any accrued interest.

What is tax pooling?

Tax pooling is unique to Aotearoa, with TMNZ being the first and largest tax pooling business. Essentially it allows tax paying businesses to pool their provisional tax payments in an account held by a registered tax pooling intermediary like TMNZ. This way, we offset one business’ underpayments by another’s overpayments. Think of it as business helping business!

Because we’re able to backpay your unpaid tax, it is no longer considered a ‘late payment.’ Meaning you avoid the IR penalties and fees on any missed tax payments.

With TMNZ, you have the flexibility to make a one-off payment or set up a regular instalment arrangement, giving you up to 13 months to pay your provisional tax. Additionally, if you've missed your terminal tax date, TMNZ can still help reduce interest costs and eliminate late payment penalties.

How about for historic payments from IR reassessment notices?

TMNZ can also assist taxpayers with historic income tax payments and other tax types such as GST and PAYE if you receive a notice of reassessment from IR. You have 60 days from the date the IR issues this notice to use tax pooling.

What’s the catch?

Paying provisional tax through a tax pooling intermediary such as TMNZ lets you pay what you owe at a time in the future that better suits your business, or take advantage of instalments to avoid the provisional tax late payment penalty.

There is some interest to pay – but this is much lower than IR's interest on tax paid late or what you will incur if you use your business overdraft or get an unsecured loan. Tax pooling wipes the late payment penalties.

All you have to do is tell the tax pooling provider the amount of tax that is due and when or how you would like to pay it. They take care of the rest and even notify IR of your arrangement. Easy-peasy.

Save yourself the tax trouble. Find out more.

If you've missed your provisional tax payment or are struggling to meet your tax obligations, you’re not out of luck.

TMNZ can help ease the financial strain of late payment penalties and provide much-needed cashflow relief. Contact your accountant or tax agent and let them know you want to pay your missed or underpaid provisional tax using TMNZ tax pooling. Or get in touch with us directly to explore your options and take control of your tax payments.

Don't let a late payment penalty derail your business. With tax pooling from TMNZ, you can navigate the challenges of tax season with confidence and peace of mind.

Contact our team to take advantage of tax pooling today.