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How filing late and losing EOT impacts provisional tax payments 1200 630 Lee Stace
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How filing late and losing EOT impacts provisional tax payments

Losing extension of time (EOT) due to filing income tax returns late means someone can only use 105 percent of the previous year’s residual income tax (RIT) when calculating their provisional tax payments. That’s because if a taxpayer fails to provide their returns(s) on time, IRD’s system defaults to using the date by which they…

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Tax loss carry-back scheme: Important considerations 1200 630 Lee Stace
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Tax loss carry-back scheme: Important considerations

Standard imputation (ICA), ownership continuity and grouping rules still apply under the new tax loss carry-back scheme, while anyone who overestimates their loss will face IRD interest (UOMI) from the date of their first provisional tax instalment for the previous year. Moreover, company profits already paid out via shareholder-employee salaries or dividends are unable to…

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Small Business Cashflow Loan Scheme: Do your homework first 1200 630 Lee Stace
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Small Business Cashflow Loan Scheme: Do your homework first

A former economist at one of New Zealand’s largest banks has a warning for someone considering the Small Business Cashflow Loan Scheme: It could limit your future borrowing capacity. That’s because banks may decline lending to anyone who has this type of debt on their books, as IRD may have first collection rights as a…

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TMNZ virtual roadshow: Tony Alexander talks post-COVID-19 economic recovery 1200 620 Lee Stace
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TMNZ virtual roadshow: Tony Alexander talks post-COVID-19 economic recovery

The increase in New Zealand’s net debt to GDP ratio over the next four years is not the bogeyman some are making it out to be, nor will the Government necessarily have to increase taxes to pay off what they are borrowing. That’s according to one of New Zealand’s leading and respected economists, Tony Alexander,…

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IRD system issues affecting tax pooling 1200 630 Lee Stace
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IRD system issues affecting tax pooling

IRD is working to resolve the problem of its system incorrectly sending grace period letters to taxpayers flagged as using tax pooling. However, they have fixed the issue which was seeing someone’s GST refund being automatically applied to their provisional tax. Here’s what you need to know about both problems. Plus, we also highlight some…

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IRD adjusts UOMI rates 1200 630 Lee Stace
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IRD adjusts UOMI rates

Someone will now pay the taxman less interest (UOMI) if they underpay their tax – but literally receive nowt if they overpay. That’s the key takeaway after IRD announced it is adjusting its UOMI rates today. They are lowering the interest they charge for underpaid tax from 8.35 percent to seven percent. IRD’s credit interest…

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UOMI remission guidance: IRD overlooks provisional tax scenario 1344 814 Lee Stace
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UOMI remission guidance: IRD overlooks provisional tax scenario

Question: What is the amount on which IRD will remit interest (UOMI) at the date of the final provisional tax instalment if someone outside of safe harbour is unable to pay on time due to COVID-19? The answer: We cannot say for certain as this is a scenario IRD has yet to address in its…

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COVID-19: How tax pooling can still help taxpayers 1344 908 Lee Stace
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COVID-19: How tax pooling can still help taxpayers

IRD may be taking a more flexible approach in terms of its interest (UOMI) remission for taxpayers grappling with the financial impact of COVID-19 – but any request for relief will still be at its discretion and on its terms. As such, an IRD-approved tax pooling provider such as Tax Management NZ (TMNZ) can assist…

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Harrison Grierson mitigates provisional tax risk 1200 630 Lee Stace
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Harrison Grierson mitigates provisional tax risk

For Matthew Fleming, provisional tax is risky business as it requires a degree of crystal-ball gazing and guesswork. However, he chooses to mitigate that risk by depositing these payments into Tax Management NZ’s tax pool account. It’s a “no-brainer” because it gives him a better return if he overpays provisional tax and reduces his interest…

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Coffee with Tsarina at Shore Accounting Solutions 1200 630 Lee Stace
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Coffee with Tsarina at Shore Accounting Solutions

Tax pooling is part of the strategy Shore Accounting Solutions employs to assist businesses with managing cashflow and provisional tax payments. Tsarina Dellow (pictured above) is a chartered accountant at the two-person firm in Amberley, 45 minutes north of Christchurch. She says paying provisional tax on dates IRD prescribes can be hard on small- and…

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