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Increased provisional tax threshold: Legislative application 765 450 Lee Stace
  • Lee Stace

Increased provisional tax threshold: Legislative application

The rules that determine whether someone must pay provisional tax are still the same in terms of how IRD applies them. However, what’s not the same for the 2021 and future tax years is the point at which they are applicable to a taxpayer. That’s the important thing to remember if you’re struggling to wrap…

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Anti-money laundering requirements and tax pooling 1344 820 Lee Stace
  • Lee Stace

Anti-money laundering requirements and tax pooling

Updated 12 October 2020 Tax Management NZ (TMNZ) must now conduct a limited form of customer due diligence on all clients as part of recent changes to anti-money laundering (AML) requirements. As such, we will be collecting information about the taxpayers using our service and asking anyone acting on their behalf to supply some basic…

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Increased provisional tax threshold explained 1200 630 Lee Stace
  • Lee Stace

Increased provisional tax threshold explained

A taxpayer has no obligation to pay provisional tax for the 2020-21 income year if their liability for the previous year was $5000 or less. In most cases, any income tax payable for the upcoming year will be due at their terminal tax date. That said, there are some exceptions to this rule. We are…

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COVID-19 provisional tax interest remission: What you need to know 1200 630 Lee Stace
  • Lee Stace

COVID-19 provisional tax interest remission: What you need to know

Updated 11 August 2020 Small- and medium-sized taxpayers may no longer have to pay interest if they underpay provisional tax as a result of miscalculating the impact COVID-19 has on their profitability for the 2020-21 income year. However, while this concession is a major boon ahead of the 28 August 2020 payment date for those…

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GST ratio timeframe extended 1200 630 Lee Stace
  • Lee Stace

GST ratio timeframe extended

IRD has extended the timeframe for taxpayers to elect to use the GST ratio method in the wake of COVID-19. They now have until 19 August 2020 or the day before the start of their 2020-21 income year, depending on which is later, to opt in. Normally someone who is eligible to calculate their provisional…

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Deadline approaching for non-COVID-19 taxpayers 1200 630 Lee Stace
  • Lee Stace

Deadline approaching for non-COVID-19 taxpayers

Options in the marketplace are available to help those NOT affected by COVID-19 pay their TMNZ arrangement for the 2019 tax year within the required legislative timeframe. We are mentioning this as we know there will be taxpayers short on cash right now who unfortunately won’t meet the criteria to receive the deadline extension announced…

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COVID-19: IRD extends tax pooling deadline 1200 630 Lee Stace
  • Lee Stace

COVID-19: IRD extends tax pooling deadline

Updated 19 June 2020 Anyone impacted by COVID-19 will have 365 days after their terminal tax date to settle 2019 income tax arrangements with TMNZ, subject to meeting certain criteria. IRD has used its new discretionary powers in s6I Tax Administration Act 1994 to extend the legislative deadline after recognising the cashflow difficulties some taxpayers…

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

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
  • Lee Stace

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
  • Lee Stace

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
  • Lee Stace

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
  • Lee Stace

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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Webinars to get businesses geared up for the post-COVID-19 environment 1344 639 Lloyd Evaroa
  • Lloyd Evaroa

Webinars to get businesses geared up for the post-COVID-19 environment

From May until October this year, TMNZ will offer a new webinar that focuses on a different topic that is sure to provide value in a post-COVID-19 environment. Whether you are a business owner or tax agent or curious to know what the future will look like, be sure to come along and invite your…

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IRD adjusts UOMI rates 1200 630 Lee Stace
  • Lee Stace

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
  • Lee Stace

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
  • Lee Stace

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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COVID-19: Clarification around UOMI remission for 2019 terminal tax 1200 630 Lee Stace
  • Lee Stace

COVID-19: Clarification around UOMI remission for 2019 terminal tax

IRD will only remit interest (UOMI) for terminal tax after 7 April 2020 if a taxpayer was unable to make this payment on time due to COVID-19. It means anyone who is accruing UOMI on unpaid tax from the date of their final provisional tax instalment – or earlier dates, for that matter – for…

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

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
  • Lee Stace

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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COVID-19: Additional tax relief announced 1200 630 Lee Stace
  • Lee Stace

COVID-19: Additional tax relief announced

IRD will have the flexibility to change statutory tax deadlines as part of new measures announced to provide relief for taxpayers during the COVID-19 pandemic. Plans are also afoot to introduce a temporary tax loss carry-back scheme and relax the tax loss continuity rules. Today’s announcement by the Government recognises taxpayers require more assistance during…

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