Missed Your Tax Payment? 3 Ways TMNZ Helps Avoid IRD Penalties
If you’ve just realised you’ve missed your 15 January provisional tax payment, or you’re staring down a payment you simply can’t make right now, take a breath. You’re not alone, and there are options that can help you avoid penalties and get back on track.
At TMNZ, we work with thousands of New Zealand businesses every year who face the same challenge: provisional tax payments that don’t always line up with cashflow realities. The good news? TMNZ offers practical solutions that can save you money and give you breathing room.
What Happens if You Miss a Tax Payment?
Missing a provisional tax payment in New Zealand triggers a cascade of penalties and interest charges from IRD. Understanding what’s at stake can help you take action before costs spiral.
IRD Late Payment Penalties
IRD applies penalties in stages:
- 1% penalty – charged the day after the due date
- 4% penalty – charged 7 days after the due date (on top of the 1%)
- Use of Money Interest (UOMI) – currently 8.97% per annum (as at 16 January 2026), calculated daily from the day after the due date until paid in full
For example, if you owe $20,000 and miss the due date by two months, you could face approximately $1,000 in penalties alone—before UOMI is added.
First-Time Late Payers: Grace Period
If it’s your first late payment in a two-year period, IRD may offer you a grace period before charging penalties. They’ll notify you of this grace period and your new due date. However, if you don’t pay by the new due date, penalties are charged from the original due date. Don’t rely on this—it’s not guaranteed and only applies once every two years.
Understanding Your Options
How to Check Your Tax Position in myIR
Before you act, check where you stand:
- Log into myIR at ird.govt.nz
- Select your Income Tax account
- Select ‘View’ provisional tax to see your due dates and amounts owing
- Check your ‘Income summary’ for a breakdown of income sources
Your myIR account shows your provisional tax due dates, amounts paid, and any outstanding balances—giving you a clear picture of your obligations.
Comparing Your Options: IRD vs TMNZ vs Bank Finance
IRD Instalment Arrangement
- Set up through myIR to pay debt in weekly, fortnightly, or monthly instalments
- UOMI continues to accrue on the outstanding balance
- Some late payment penalties may be reduced if you set up before the due date
- Your payment is still recorded as ‘late’ with IRD
TMNZ
- IRD treats your tax as paid on time when transferred from the pool
- Eliminates late payment penalties entirely
- Interest rates significantly lower than IRD’s UOMI
- Flexible payment options—pay in instalments, defer, or access deposited funds
- You have 75 days from your terminal tax date to use tax pooling for the tax year
Bank Finance/Overdraft
- May require security or affect your credit facilities
- Interest rates often higher than tax pooling
- Uses up banking headroom you may need for business operations
- Doesn’t eliminate IRD penalties—you’re still paying late
The 75-Day Rule for Tax Pooling
A critical deadline to know: you have 75 days from your terminal tax date to use tax pooling to satisfy your provisional or terminal tax liabilities at backdated effective dates. For a standard 31 March balance date taxpayer with a tax agent, your terminal tax date is typically 7 April—giving you until late June to settle tax pooling for that tax year. Act early to ensure you don’t miss this window.
Let’s look at how three different businesses used TMNZ to navigate missed provisional tax payments.
Scenario 1: The project-based business
Meet the team at Bayside Builders*
Bayside Builders is a residential construction company with several homes due for completion after the January provisional tax date. They knew they’d have the cash to pay tax once the properties were signed off and final payments came through, but they couldn’t tie up working capital in tax when they needed it to finish the builds.
January hit, and the 15th came and went. Materials, subcontractors, and wages had to come first.
How TMNZ helped:
Bayside Builders used TMNZ’s tax financing option to defer their provisional tax payment. This meant they could:
- access financing at rates lower than their bank
- preserve banking headroom for construction costs
- avoid IRD penalties and use of money interest (UOMI)
- repay the tax finance once properties settled and revenue came in.
The result: Bayside Builders maintained the capital they needed to complete their projects, avoided penalties, and kept their banking relationships intact, all while meeting their tax obligations.
Scenario 2: The unexpected cashflow crunch
Meet the Andersons from Clearwater Station*
The Andersons run a sheep and beef farm in the South Island. By January, lamb sales are well underway, and cash is starting to come in. But this year, the farm was still recovering from a tough winter. The cost of carrying stock through the cold months—supplementary feed, animal health, and repairs—had stretched their reserves. When an unexpected dry spell hit and they needed to buy in more feed, the business account couldn’t stretch to cover both farm costs and the 15 January provisional tax payment.
But now they needed short-term access to those funds to keep the farm running.
How TMNZ helped:
Because the Andersons had deposited their tax into TMNZ’s pool, they were able to use the drawdown facility to:
- access their deposited funds for a short period
- bridge the immediate cashflow gap caused by the drought
- repay the funds once livestock sales came through
- avoid IRD penalties and maintain their tax position.
The result: The Andersons got through the drought without compromising their tax compliance or incurring penalties, and their funds were back in place once sales resumed.
Scenario 3: The seasonal business
Meet Jo from Coastal Homewares*
Jo runs a homeware and giftstore that does about 40% of its annual revenue in the lead-up to Christmas. By January, the shop is quiet, but the invoices from stocking up for the holiday rush—placed on 30 and 60-day terms—are all landing at once. Between paying suppliers, clearing staff holiday pay, and managing post-Christmas returns, cash is tight. Missing the 15 January provisional tax payment wasn’t the plan, but it was the reality.
How TMNZ helped:
Rather than facing IRD’s late payment penalties and UOMI, Jo purchased tax through TMNZ’s pool and set up a payment plan that matched her cashflow. This allowed her to:
- pay in flexible instalments spread over several months
- avoid late payment penalties entirely
- pay interest at rates lower than IRD’s UOMI debit rate
- get back on her feet without draining the business account
Because TMNZ had already made the payment to IRD on the original due date, IRD treated Jo’s tax as paid on time when it was transferred to her account.
The result: Jo kept her business running through the quiet months and avoided costly penalties, all while staying fully compliant.
Why This Matters
Missing a provisional tax payment doesn’t have to mean penalties, stress, or a hit to your reputation with IRD. TMNZ gives you options that work with your business reality, not against it.
Here’s what you need to know:
- Avoid penalties: When you purchase tax through TMNZ’s pool, IRD treats it as paid on time. That eliminates late payment penalties.
- Flexible payment options: Pay in instalments, defer to a future date, or access funds you’ve already deposited.
- Lower interest rates: TMNZ’s rates are lower than IRD’s UOMI debit rates and competitive with bank financing.
- Fast turnaround: We can often arrange solutions within days, not weeks.
Frequently Asked Questions
If you miss a provisional tax payment, IRD charges a 1% late payment penalty the day after the due date, followed by an additional 4% penalty seven days later. Use of money interest (UOMI) at 8.97% per annum also accrues daily until the debt is paid. These costs add up quickly, which is why taking action early is important.
Yes. Tax pooling allows you to purchase backdated tax credits that IRD treats as paid on the original due date. This eliminates late payment penalties entirely. TMNZ is an IRD-approved tax pooling intermediary that has helped thousands of New Zealand businesses avoid penalties since 2003.
You have 75 days from your terminal tax date to use tax pooling to cover missed provisional or terminal tax payments for that tax year. For most taxpayers with a 31 March balance date and a tax agent, the terminal tax date is 7 April—so you’d have until approximately late June. The sooner you act, the lower your interest costs.
Tax pooling is an IRD-approved system where provisional tax payments from multiple businesses are held in a pooled account. When one business overpays and another underpays, the overpayment can cover the shortfall. Because funds in the pool are date-stamped, purchasing tax from the pool means IRD treats your payment as made on the original due date—eliminating penalties and reducing interest costs.
Yes. TMNZ (Tax Management New Zealand) pioneered tax pooling in 2003 and is one of six registered tax pooling intermediaries approved by IRD. Tax pooling is fully compliant with New Zealand tax law and is used by thousands of businesses and accountants nationwide.
They’re separate charges. Late payment penalties are fixed percentages (1% immediately, then 4% after seven days) charged as a penalty for missing the due date. UOMI (use of money interest) is interest charged daily at 8.97% per annum on the outstanding tax balance until it’s paid. Both can apply simultaneously, making timely action crucial to minimising costs.
Ready to explore your options?
If you’ve missed your 15 January payment or you’re concerned about upcoming payments, our team can help you understand your options and put together a plan that works for your business. We’re here to make tax easier and help you stay in control of your cashflow, no matter what challenges come your way. Get in touch today.
*These scenarios are fictional examples created to demonstrate how tax payment solutions work to meet unique circumstances in a range of industries.
Tax Payment Trends for 2026: Supporting Business Growth Through Economic Recovery
Matt Edwards, Chief Executive Officer, TMNZ
As we move into 2026, New Zealand businesses are anticipating a turning point after navigating challenging economic conditions. Business confidence has surged to its highest level in nearly twelve years1, driven by aggressive central bank rate cuts and growing optimism about the recovery ahead. For business and tax advisors, this presents both opportunity and complexity.
At TMNZ, we’re seeing firsthand how evolving payment patterns are reshaping the way businesses manage their tax obligations, and we’re committed to supporting your clients’ growth throughout this pivotal year.
The Economic Landscape: Recovery with Caution
The New Zealand economy is projected to grow with real GDP expected to increase by 1.7% in 2025/26, rising to 3.4% in 2026/272, a welcome improvement after recent contraction. Business sentiment is notably strong, with manufacturers particularly optimistic about the year ahead.
However, the recovery is nuanced. While lower interest rates are providing relief to indebted businesses and the rural economy remains relatively robust, our urban centres continue to face headwinds. Unemployment is expected to peak around 5.5% in the March 2026 quarter, and inflation remains at the upper limit of the Reserve Bank’s target band. Core Crown tax revenue is forecast to rise as a share of GDP, from 27.3% in 2025/26 to 28.4% in 2029/303, largely driven by an improvement in the economy and the effect of wage growth moving people into higher tax bands. At TMNZ we have seen significant, double-digit year on year growth in tax deposits made by small and medium sized businesses, indicating that some businesses are expecting to be more profitable this year.
For advisors, this environment demands careful cashflow management. The gap between economic optimism and actual financial performance means that while businesses may be planning expansion, they’re also managing tighter margins and delayed investment decisions.
Emerging Tax Payment Trends
We’re observing several significant shifts in how advisors manage their clients’ tax obligations in 2026:
- Provisional tax calculation has become critical. In those industries that are struggling, many advisors are suggesting their clients to pay provisional tax based on actual cashflow rather than overpaying based on an uplift from the prior year liability.
- Tax pooling is gaining traction. More businesses are turning to tax pooling arrangements to manage provisional tax more efficiently, reducing the risk of underpayment penalties while avoiding the opportunity cost of overpayment. Tax advisors are increasingly encouraging their clients to pay their provisional tax through TMNZ. This trend reflects a more sophisticated approach to working capital management as businesses seek every advantage during the recovery phase.
- Tax payments are under scrutiny. With Inland Revenue’s increased focus on businesses with tax debt, advisors are setting up payment arrangements for provisional tax, while ensuring that clients’ GST and PAYE obligations are met by the due date.
How TMNZ’s Solutions Support Business Growth
At TMNZ, we recognise that effective tax payment management isn’t just about compliance – it’s about enabling growth for your clients. Our payment solutions are designed for the challenges businesses face in 2026:
- Flexible payment scheduling allows you to align your client’s tax payments with their actual cashflow patterns, particularly valuable when revenue remains uncertain. Rather than forcing provisional tax payments to fit rigid schedules, our payment solutions match to business rhythm.
- Integrated payment tracking provides real-time visibility across provisional tax obligations. For advisors managing multiple entities or complex group structures, this consolidated view eliminates the risk of missed deadlines and provides the data needed for strategic cashflow planning.
- Payment reliability matters more than ever. As your clients invest in growth initiatives, the last thing they need is a missed payment disrupting tax compliance or damaging their relationship with Inland Revenue.
Looking Ahead
The economic outlook for 2026 represents a genuine opportunity for New Zealand businesses. Capital investment is forecast to increase 6.1% in calendar 20264, its strongest pace of expansion since 2021. This is the environment where strategic tax payment management transforms from a compliance function into a growth enabler.
For advisors, the message is clear: businesses that can efficiently manage their tax obligations while preserving working capital for investment will be best positioned to capitalise on the recovery. At TMNZ, we’re committed to providing the payment tools that makes this possible.
As we navigate 2026 together, I encourage you to review your current tax payment processes. Are they supporting your clients’ growth objectives, or are they simply maintaining compliance? The difference matters, and TMNZ is here to help you bridge that gap.
1 New Zealand Institute of Economic Research (NZIER) Survey of Business Opinion, January 2026
2 New Zealand Treasury Half Year Economic and Fiscal Update 2025
3 New Zealand Treasury Half Year Economic and Fiscal Update 2025
4 BNZ Economic Forecast for 2026
How to manage business cashflow over the seasonal period
Summer’s here. A time for family, friends, and well-earned downtime. But for many small and medium-sized Kiwi businesses, it’s also one of the toughest periods for cashflow. The challenge is heightened for many sectors that experience a slow period in January and February, while provisional tax and GST payments are due on 15 January for businesses with a 31 March balance date.
This year brings additional pressure with the 2025/2026 Christmas and New Year public holidays falling midweek on Wednesdays and Thursdays. This creates a fragmented two-week period where many businesses will close or operate at reduced capacity.
Let’s look at why Christmas creates cashflow challenges and what options can help you navigate this seasonal period more smoothly.
Why Christmas creates cashflow challenges for NZ businesses
The period after Christmas is traditionally slow. For sectors like hospitality or retail, there’s a surge in demand before Christmas that makes the January drop-off particularly harsh.
Additional pressures businesses can come under include:
- business closures or reduced capacity over the break – less income generated
- employee incentive schemes and bonuses paid before Christmas – draining cash reserves right before the quiet period
- reduced consumer spending in January and February – as consumers apply more caution after the holiday spending surge
- inventory tied up in stock – particularly challenging for retail businesses with cash locked in unsold summer ranges
- slower bank processing times – public holidays and weekends can delay payments arriving in your account
Together, these create what many business owners know as the “summer squeeze” on cashflow, with added pressure to cash reserves with the 15 January provisional tax deadline.
The 15 January provisional tax deadline
With these seasonal challenges, it’s no surprise many businesses struggle to manage cashflow and meet the 15 January provisional tax deadline.
Unfortunately, Inland Revenue doesn’t factor in these seasonal challenges. They’ll charge 3.27% late payment penalties and 9.89% use of money interest (UOMI) if tax isn’t received on the due date (rates as at May 2025).
Many businesses find this timing particularly challenging given the seasonal slowdown and reduced cash reserves after the holiday period.
Ways to manage your Christmas cashflow
So what are your best options?
Many businesses take a proactive approach to their Christmas cashflow. Here are a few key areas to consider:
Accounts receivable – review outstanding invoices before the holiday period and follow up with customers to improve collection timing. Early December works well to encourage payment before businesses close for the break.
Supplier relationships – if you have good trading relationships and have been a reliable payer, consider discussing your payment schedules with suppliers over the seasonal period.
Planning ahead – create a cashflow forecast covering the December to February period. This helps identify potential gaps in advance, including reduced trading days, holiday bonuses, and the 15 January tax payment.
Every business situation is different. It’s worth discussing your specific circumstances with your accountant or financial adviser.
A smarter way to manage tax payments
Looking at your provisional tax payment timing? TMNZ offers a smarter alternative.
Tax pooling through TMNZ is approved by Inland Revenue and trusted by New Zealand businesses. It lets you defer provisional tax payments to a time that suits you, without incurring late payment penalties and UOMI.
It’s more affordable than many traditional forms of finance, doesn’t affect your existing credit facilities, and requires no credit checks or security.
You only pay back what you actually owe. If your tax liability is less than expected, you don’t need to repay the full amount. And the finance arrangement can be easily extended.
How it works
Say you need to defer a $5,000 provisional tax payment for 6 months. You’d pay TMNZ a one-off, tax-deductible interest amount, and we’d arrange the $5,000 provisional tax payment on your behalf.
The interest amount is based on the tax amount financed and the deferral period. In this instance, it would be roughly $130.
The provisional tax payment is held in an IRD account administered by Guardian Trust. They instruct IRD to transfer the tax into your IRD account when you repay the $5,000 principal in 6 months.
IRD treats the $5,000 provisional tax as paid on time once the transfer is processed. It’s that simple.
Key benefits of tax pooling:
- IRD-approved
- doesn’t impact your existing credit facilities
- no security or credit checks required
- flexibility to adjust if you owe less tax than expected
Planning ahead for the summer period
The businesses that navigate Christmas cashflow most successfully? They start planning early. Consider reviewing your cashflow position in October or November, before the holiday rush begins. This gives you time to understand your position and explore options that work for you.
Your accountant can help you assess your specific situation and what approaches might work for you, including whether tax pooling could be the right solution for managing your 15 January provisional tax obligations.
Take control of your summer cashflow
Christmas doesn’t have to be stressful for your cashflow. With forward planning and the right solutions, you can navigate the seasonal challenges while keeping your business on track.
Ready to ease your seasonal cashflow pressures? Learn more.
Need to calculate your provisional tax? Check out our Calculating Provisional tax guide.
Three ways TMNZ’s tax finance solution has supported NZ business success
Cashflow challenges don’t wait for convenient timing – and neither do business opportunities.
Since 2003, TMNZ has helped over 25,000 Kiwi businesses improve cashflow through our provisional tax solutions, including tax finance – a better way to delay income tax payments.
Three different businesses. Three different challenges. Three smart ways tax finance made the difference.
Who tax finance can help
Tax finance through TMNZ can help if you’re:
- facing a cashflow squeeze during seasonal low periods
- spotting time-sensitive opportunities that need immediate capital
- growing your business and need working capital for expansion
- managing the timing mismatch between seasonal revenue and tax obligations
Smarter savings in the hospitality industry
The situation
A local hospitality equipment supplier spotted an opportunity too good to miss. As an importer of specialised restaurant equipment, they noticed currency exchange rates had shifted significantly – making their European supplier’s products much more affordable than usual.
The challenge
The timing was perfect for acquiring high-quality equipment at reduced prices. But there was a catch. Their provisional tax payment was due soon, and the funds set aside for it were exactly what they needed to secure the deal. It’s a dilemma many business owners know well – choose between meeting tax obligations or capitalising on growth opportunities.
The solution
Rather than missing out, they found a practical solution through TMNZ. The approach was straightforward. Partner with TMNZ to defer their provisional tax payment for interest rates similar to your mortgage. Use those funds to purchase the discounted equipment. Maintain compliance with Inland Revenue while pursuing growth.
The results
The results? Success on multiple fronts:
- acquired high-quality equipment at below-market prices
- maintained healthy cashflow despite the significant purchase
- increased profit margins on future equipment sales
- kept tax obligations in order without penalties
- enhanced their competitive position in the market
The takeaway
Tax payments don’t have to be inflexible deadlines. This shows how working with TMNZ helps you manage tax obligations while seizing time-sensitive opportunities that enhance profitability.
And here’s the important bit – all TMNZ tax finance arrangements are 100% Inland Revenue approved. You can defer payments with complete compliance and peace of mind.
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. Winning the infrastructure contract was a milestone achievement, but they needed to expand their trucking fleet immediately to meet requirements. Like many growing businesses, they had funds set aside for provisional tax but needed that same cash to fund expansion.
The solution
The business owner took a smart approach. Partner with TMNZ to defer their tax payment for 12 months. Use their provisional tax funds to purchase an additional truck. Start servicing the new contract immediately with an expanded fleet.
The results
The results delivered multiple benefits:
- secured and started the valuable infrastructure contract
- increased fleet capacity and revenue potential
- generated immediate positive cashflow from the new truck
- maintained good standing with Inland Revenue
- spread tax payment over a more manageable timeframe
The takeaway
Small business growth often requires making quick decisions when opportunities arise. This shows how flexible tax payment arrangements help you invest in growth while managing tax obligations responsibly.
Supporting cashflow over summer in the electronics industry
The situation
A small electronics distribution company faced a common seasonal challenge. Like many in their industry, they closed during the Christmas period through mid-January, aligning with their major clients’ shutdown periods.
The challenge
The holiday season created multiple financial pressures. Zero revenue during the extended Christmas closure. Staff holiday pay obligations coming due. Income tax and GST payments due on 15 January. The business owner worried they wouldn’t fully enjoy their family holiday because of financial stress.
The solution
The business owner took proactive steps to manage seasonal cashflow and connected with TMNZ in December. They recognised the recurring nature of the holiday squeeze and decided to arrange deferring their 15 January income tax payment until April from now on. This maintained GST compliance while managing cashflow more smartly.
The results
The results? Both financial and personal benefits:
- balanced holiday season expenses without depleting cash reserves
- maintained staff satisfaction with timely holiday pay
- shifted tax payments to align with stronger cashflow periods
- enjoyed stress-free family time at the beach
- started the new year in a stronger financial position
The takeaway
Many seasonal businesses face predictable cashflow challenges during holidays. This shows how planning ahead and using flexible tax payment arrangements helps you manage obligations while protecting crucial family time.
Payment flexibility that works for your business
Up to 75 days of payment flexibility after your terminal tax date. Breathing room to manage cashflow on your terms while maintaining full Inland Revenue compliance.
Ready to explore how tax finance could work for you? Managing seasonal cashflow challenges? Funding growth opportunities? Or simply want more flexibility with provisional tax payments? Learn more about our tax finance solutions here.
Tax payment flexibility. Too good to be true?
Why smart kiwi businesses are making the switch to TMNZ.
For over 20 years, TMNZ has been helping New Zealand businesses manage their provisional tax more effectively. Yet many SMEs still have questions about how it works and whether it’s right for them.
We sat down with Joe Kettlewell, Customer Growth Manager at TMNZ to address the most common concerns we hear.
Is tax pooling actually legit?
Absolutely. It’s has been part of New Zealand’s tax landscape for more than two decades. All tax pooling intermediaries, including TMNZ, use trust accounts directly linked to the IRD. This means your funds carry crown risk – the lowest risk level possible.
When you deposit funds into a tax pool, it’s essentially the same as paying the IRD directly. The IRD fully supports this provisional tax payment method because it helps businesses stay compliant by ensuring the right amount of tax is paid at the right time.
I’ve always paid the IRD directly – why change now?
There are two main reasons to consider TMNZ’s provisional tax solutions, even if you’ve never had payment issues before:
- Future-proof your business: Cashflow consistency today doesn’t guarantee tomorrow. Whether it’s seasonal dips, unexpected expenses, or market changes, having TMNZ set up means you’re ready to respond quickly if circumstances change.
- Take control of your tax: When you overpay the IRD, they might allocate your surplus to other tax types without consulting you. With TMNZ, your funds remain ringfenced and under your control. Need a refund? You can typically get surplus funds back within a week, rather than waiting months for the IRD to process your request.
My accountant handles everything – do I need to get involved?
The beauty of TMNZ’s provisional tax solutions is the flexibility. If your accountant manages your tax affairs, they can engage with TMNZ on your behalf – in fact, we’re endorsed by major consultancy firms and accountants across New Zealand.
For businesses with in-house tax teams, we provide hands-on support. We’ll review your historic myIR statements, understand your income patterns and seasonality, and recommend solutions that smooth out your provisional tax obligations throughout the year.
Isn’t it just for big corporates?
This is perhaps the biggest misconception. While large enterprises certainly benefit from deferring provisional tax payments for capital expenditure or better returns, the majority of our clients are actually small to medium businesses.
From hairdressers to tradies, any business with income fluctuations finds TMNZ invaluable. You can pay as much or little as you want throughout the year, matching your tax payments to your actual cash flow. Plus, you get an extra 75 days after your terminal tax date to settle your affairs.
What if I’ve never had problems paying provisional tax?
Even businesses with perfect payment histories benefit from TMNZ:
- Better reminders: We proactively remind you of upcoming provisional tax dates – something the IRD doesn’t always do effectively
- Expert support: As New Zealand’s tax pooling originators with 20 years’ experience, we provide guidance the IRD can’t
- Insurance policy: If circumstances change, purchasing tax through TMNZ costs less than IRD penalties and interest
Any other benefits?
Using TMNZ for your provisional tax gives you:
- More time: An additional 75 days to pay after your terminal tax date
- Faster refunds: Surplus tax refunded within a week versus months with the IRD
- Cost savings: Purchase tax at rates lower than IRD penalties and interest
- Flexibility: Handle reassessments across all tax types using pooled funds
There’s virtually no downside to using TMNZ. Your funds sit in an IRD-linked trust account with crown risk protection. You only pay interest if you need to purchase tax – and our rates beat both bank lending and IRD penalty rates.
Start proactively, not reactively
While TMNZ can rescue you from a shortfall discovered late in the year, the smartest approach is proactive planning. By engaging with TMNZ at the start of your tax year, we can:
- review your provisional tax notice
- understand your business’s unique cashflow patterns
- design a payment arrangement that works with your seasonality
- ensure you meet all obligations without straining your working capital.
Getting started is simple
Ready to take control of your provisional tax? Getting started with TMNZ is straightforward:
- Using an accountant? They’ll already know TMNZ and can set everything up with minimal input from you
- Managing tax yourself? Contact us directly and we’ll review your situation and recommend the right solution
Your key takeaway
With 15 January approaching, now’s the perfect time to explore how TMNZ can benefit your business. Don’t wait for cashflow constraints to force your hand – be proactive and give your business the flexibility it deserves.
Ready to pay provisional tax on your terms? Contact our team of tax experts here.
Why smart CFOs are turning tax into competitive advantage: 10 game-changing benefits for larger businesses
With the 28 November provisional tax deadline approaching, corporate businesses with June balance dates have a choice to make. Pay Inland Revenue directly and lock your funds away. Or turn that tax obligation into a strategic financial tool.
Over 25,000 businesses have chosen the smarter path with TMNZ, saving more than $520 million through our flexible tax payment solutions.
Tax pooling with TMNZ isn’t just about avoiding penalties anymore. It’s a strategic tax management approach that turns a fixed obligation into a flexible financial instrument that gives your company a real competitive advantage.
The Strategic Shift: From Tax Burden to Financial Asset
As the originators of tax pooling, approved by Inland Revenue since 2003, we’ve watched it evolve from a compliance tool to a sophisticated financial strategy suitable for any large business with complex tax obligations.
Here’s how smart CFOs are using TMNZ’s tax pooling solutions to outmanoeuvre their competition:
1. Save significant costs
Large businesses often carry substantial tax liabilities. With TMNZ, these obligations become opportunities for considerable savings on Inland Revenue interest and penalties.
But here’s where it gets interesting: your company can earn more on overpaid tax.
While your competitors tie up funds with IR, earning minimal credit interest, you’re generating higher returns that flow directly to your bottom line.
The numbers speak for themselves; some of our larger clients save hundreds of thousands of dollars annually. That’s real money that can fund growth initiatives, acquisitions, or shareholder returns.
2. Retain working capital
TMNZ lets you retain large sums of working capital for longer periods. Instead of sending substantial payments to Inland Revenue months before they’re actually due, you keep that capital actively working in your business.
You can use that money to fund high-return investments and acquisitions, or maintain liquidity to capitalise on market opportunities.
Your working capital becomes strategic ammunition, rather than locked-away tax payments.
3. Manage risks
Large businesses can face complex tax risks that can challenge even the most prepared finance teams. Unexpected liabilities, reassessments, and penalties can hit at the worst possible times.
TMNZ can help as a valuable part of your company’s corporate tax management strategy. Get protection against financial curveballs and the flexibility to respond quickly when circumstances change.
4. Simplify compliance
Managing compliance across complex tax structures can feel like juggling flaming torches. TMNZ helps alleviate wasted time by simplifying tax management processes across your company.
No more scrambling to meet multiple tax deadlines or managing cash across various entities. One strategic tax management approach that covers all your bases.
5. Improve financial reporting
TMNZ provides more predictable tax expenses, which enhance key financial ratios that matter to stakeholders, lenders, and potential acquirers.
When your business tax management strategy contributes to stronger financial metrics, you’re building value that extends far beyond simple compliance.
6. Protect against market volatility
For businesses heavily impacted by fluctuating markets, TMNZ offers protection against interest rate volatility by allowing you to lock in rates in advance, removing another variable from your financial planning equation.
This is especially valuable during periods of economic uncertainty when interest rate changes can significantly impact your cost structure.
7. Structure flexible payments
Standard Inland Revenue payment dates weren’t designed with your specific business rhythm in mind. TMNZ lets you structure tax payments around your unique cashflow patterns rather than arbitrary government deadlines.
This flexibility gives you real control over your funds. Earn higher interest on overpayments, access funds as a fee-free line of credit or carry them forward to future years. Our strategic tax management services work for your business, not against it.
8. Turn overpayments into assets
Paid too much? Don’t wait months for IRD to process refunds. Access overpaid amounts within 3-5 days without filing returns. Or earn above IR’s credit rate by on-selling surplus tax. Some corporates earn 2-3% above IR rates on excess deposits.
9. Provide scalable growth
As your business grows and evolves, your tax payment solutions scale with you. Whether you’re expanding into new markets, acquiring competitors, or adapting to changing tax landscapes, your tax strategy remains flexible and responsive.
This scalability means you’re not constantly rebuilding your tax approach as your business situation changes. Your foundation remains strong while adapting to new circumstances.
10. Gain expert support
Our expert team of Chartered Accountants, tax lawyers, and customer success specialists provide personal support when you need it most. They understand the complexities of larger business tax situations, and when hundreds of thousands of dollars are at stake, having direct access to expertise that matches the sophistication of your tax challenges makes all the difference.
The 28 November opportunity
Acting before 28 November gives you maximum flexibility and tax efficiency. Here are a few scenarios and outcomes we commonly see in our corporate clients:
- Scenario A: You’re confident about profitability – Deposit your tax payment into TMNZ’s pool to earn higher interest than IRD pays, maintain complete flexibility, and access funds within days if needed.
- Scenario B: Cashflow is tight or better deployed elsewhere – Use Tax Finance to defer payment. Our current rates are significantly cheaper than standard bank overdraft rates. No security required. Approval guaranteed.
- Scenario C: Uncertain about your final position? Swap tax across dates to minimise exposure. Buy tax retroactively if you’ve underpaid. Sell surplus if you’ve overpaid.
Turn tax obligation into tax efficiency
Whatever your current tax position, TMNZ offers more control and better financial outcomes than paying IRD directly. Whether you want to earn more interest on overpayments, need payment flexibility, or want to avoid expensive banking services, the opportunity is clear.
The 28 November deadline is approaching fast. Smart CFOs are already positioning their businesses to turn tax season into competitive advantage season.
Ready to transform your tax strategy?
Book a call to discuss how TMNZ’s solutions can help your specific business situation and develop a tailored arrangement before the provisional tax deadline.
Five top tips for paying 28 August provisional tax
Are you due to pay 28 August provisional tax?
For most business taxpayers, your first instalment of provisional tax for the 2025 tax year is coming up. It’s important to pay what you owe on the due date. Inland Revenue 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 the first provisional tax payment for the year on the 28 August due date. 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 fish hooks
If you pay less than $60,000, you are what’s known as a safe harbour taxpayer. You won’t be charged interest by Inland Revenue if you pay your provisional tax late. But, you will be charged late payment penalties. You can find out more about safe harbour rules 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 Inland Revenue-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 Inland Revenue interest or late payment penalties. You can defer the full payment to a date in the future or pay off what’s due in instalments.
TMNZ will date-stamp tax for you in a special trust account with Inland Revenue on your behalf. You pay TMNZ at the agreed future date or as and when it suits your cashflow, and the tax will be transferred to your account with Inland Revenue, and treated by them as being paid on time.
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.
Get provisional tax peace of mind with TMNZ
The 28 August provisional tax payment date doesn’t need to cause stress. TMNZ offers flexible, IR-approved payment solutions that give you more control over your cashflow—without the risk of late payment penalties or use-of-money interest. Explore our full 28 August payment guide or talk to TMNZ today to find out how we can support your business this tax year.
Information in this article is correct as at 31/7/25. You should consult with your tax advisor concerning all tax matters. Read our Terms and Conditions.
First year of trading and provisional tax
What are a taxpayer’s provisional tax obligations in their first year of trading?
This is a question we receive a lot. In fact, there is certainly a lot of confusion out there.
As most know, their first year of trading is not tax-free. However, when income tax is due and payable depends on a taxpayer’s tax liability (called their residual income tax (RIT)) for the year and if they are a ‘new provisional taxpayer’.
So, with that in mind, we explain below how the provisional tax rules work for new business taxpayers.
First year of trading: RIT is less than $60,000
If a taxpayer’s residual income tax (RIT) is less than $60,000 in their first year of trading, they won’t need to pay provisional tax that year. Instead, tax is payable as a lump sum on their terminal tax date, which for most taxpayers will be 7 February or 7 April of the year after this tax year.
Use of money interest and late payment penalties will be incurred if their tax bill isn’t paid by the due date.
If the RIT is more than $5000 in their first year of trading, they will be a provisional taxpayer for the following year.
First year of trading: RIT is $60,000 or more
Inland Revenue (IR) will charge interest if taxpayers fall into the ‘new provisional taxpayer’ category and you don’t make provisional tax payments.
The new provisional taxpayer criteria are different for individuals and companies/trusts.
An individual qualifies as a new provisional taxpayer if:
- Their RIT for that tax year is $60,000 or more
- Their RIT in each of the four previous tax years was $5000 or less
- They stopped receiving income from employment and started to receive income from a taxable activity during that tax year.
A company or trust qualifies as a new provisional taxpayer if:
- Their RIT for that tax year is $60,000 or more
- They did not receive taxable income from a taxable activity in any of the four previous years
- They started receiving income from a taxable activity during that tax year.
Please take note of the different criteria for individuals and companies/trusts. This catches taxpayers out.
When is the first provisional tax payment due?
Inland Revenue will charge interest (see the current rate here) on the number of provisional tax payments a taxpayer could have made in their first year of business if they meet the new provisional taxpayer criteria.
Of course, that number depends on the date on which their business starts trading.
For someone with a 31 March balance date, refer to the table below:
| If the first year of trading starts… | Then the number of provisional tax instalments payable is… | And the due dates are… |
| Before 29 July | Three | 28 Aug, 15 Jan and 7 May |
| 29 July – 15 Dec | Two | 15 Jan and 7 May |
| 16 December+ | One | 7 May |
These dates will differ if your balance date isn’t 31 March or if you file GST returns on a six-monthly basis.
First provisional tax payment – The basic amount
So, what happens if you meet the new provisional taxpayer criteria in your first year of trading?
Well, put simply, Inland Revenue will divide your tax liability (RIT) for the year by the number of instalments you were liable to pay per the table above.
For instance, say your business starts trading on 1 October and your RIT for the year was $69,000.
IR will charge interest from two provisional tax payment dates: 15 January and 7 May. The amount on which interest will accrue at each due date will be $34,500.
Reducing exposure to Inland Revenue interest
Taxpayers may wish to pay provisional tax in their first year of trading to mitigate their exposure to IR interest if they expect their RIT to be $60,000 or more.
If they are an individual or a partner in a partnership and meet certain criteria, they may also get an early payment discount of 6.3%. This is provided they make voluntary payments before their tax date and haven’t been obligated to pay provisional tax in the current or previous four years.
Reduce IRD Interest with TMNZ
Worried about use of money interest on your first year tax bill?
If you have missed making a provisional tax payment, or wish to delay when you make the provisional tax payment, TMNZ can help. TMNZ can delay the payment of your provisional tax, or help you with any missed payments. The interest cost to you is well below Inland Revenue’s interest rate. Talk with TMNZ to stay on top of your tax obligations without the stress.
This article has been written in general terms only. You should not rely upon this to provide specific information without also obtaining appropriate professional advice after detailed examination of your situation.
Using smart tax solutions to drive growth in the construction industry
The situation
Leighs Construction, a proudly New Zealand-owned and operated company, is renowned for delivering complex, high-calibre construction projects that leave a lasting legacy for local communities. As they continue to grow, managing tax obligations amidst fluctuating project phases proved to be an ongoing challenge.
The challenge
In the construction industry, taxable income can vary significantly depending on the phase of projects. For Rebecca the Group Finance Manager of Leighs Construction, this variability made it difficult to forecast and plan for tax obligations ahead of time. Traditionally, they paid taxes directly to the IRD, but this rigid approach lacked the flexibility needed to align payments with their cashflow.
The solution
Leighs Construction turned to TMNZ for a smarter, more flexible approach to their provisional tax payments. Key benefits included:
- saving money on IRD Use of Money Interest (UOMI)
- ability to time-shift tax payments forward or backward, depending on project performance and cashflow needs, without IRD penalties
- confidence in TMNZ’s trusted and IRD-approved solution for managing their tax obligations
- access to expert tax guidance and support, ensuring peace of mind during tax time.
The results
With TMNZ, Rebecca and the team at Leighs Construction have transformed their tax management process. The company now enjoys:
- cashflow flexibility, allowing them to pay taxes when it best suits their business
- significant savings on UOMI, freeing up working capital for reinvestment
- confidence in their tax compliance, supported by TMNZ’s expertise.
- ability to focus on growth knowing their tax obligations are under control.
Your key takeaway
For businesses in the construction industry, tax flexibility can unlock working capital and reduce financial stress. By partnering with TMNZ, Leighs Construction has gained the tools and support needed to navigate tax obligations with ease, enabling them to focus on building a brighter future for their business and the communities they serve.
For more on how our TMNZ’s solutions can help your business, go here.
Book a tax pooling overview for your business
Is tax pooling the right solution for you? Every business we work with has different needs. Book an overview with one of our tax pooling specialists to find out how we can support you.
How TMNZ partners with accountants to simplify tax for growing businesses
The situation
Sauvruth Sanjay is the Senior Accountant at Orb360, a small-to-medium-sized chartered accounting firm based in Auckland and Wellington. They specialise in helping SME businesses with compliance, tax advisory, dispute resolution, and franchise consulting. They’ve built a reputation for delivering tailored solutions for their clients’ financial needs, including navigating complex tax obligations.
The challenge
Many of Orb360’s clients struggle with:
- Compliance issues: Filing tax returns on time and avoiding IRD interest and penalties.
- Cashflow pressures: Juggling multiple tax obligations simultaneously (e.g., GST and provisional tax), creating strain on cashflow and preventing reinvestment into their operations.
These challenges are especially significant for SMEs, where resources are stretched, and missing deadlines can have costly consequences.
The solution
Over a decade ago, Orb360 partnered with TMNZ, to provide their clients with flexible, tailored provisional tax solutions. TMNZ offers:
- Flexibility: Clients can pay provisional tax on their terms, aligning payments with their business cashflow cycles, not just IRD’s deadlines.
- Cost savings: No IRD penalties and interest, freeing up funds for other priorities.
- Peace of mind: Integrated systems ensure clients never miss tax deadlines, reducing stress for both clients and accountants.
TMNZ also supports Orb360 during IRD audits and reassessments, providing an additional 90-day payment window to ease financial pressure during tax disputes.
The results
- Improved compliance: Orb360’s clients now consistently meet tax deadlines, avoiding penalties and maintaining good standing with IRD.
- More cashflow flexibility: Businesses can manage large tax bills without sacrificing operational growth, reinvesting funds into their companies.
- Stronger client relationships: The partnership with TMNZ has strengthened Orb360’s reputation as a strategic partner for business growth.
- Operational efficiency for accountants: TMNZ’s dedicated account managers and responsive support team have streamlined workflows for Orb360’s accountants, allowing them to focus on client growth.
Your key takeaway
For small and medium sized businesses, managing tax compliance and cashflow can be overwhelming. By partnering with TMNZ, Orb360 has provided their clients with a strategic financial planning tool, ensuring cashflow flexibility, cost savings, and peace of mind. This collaboration has not only helped clients thrive but also supported Orb360’s growth as a trusted advisor.
Book a tax pooling overview for your business
Is tax pooling the right solution for you? Every business we work with has different needs. Book an overview with one of our tax pooling specialists to find out how we can support you.