Growing a career and team in Christchurch: Penny Ineson’s leadership story
When Penny Ineson joined TMNZ 10 years ago, she had an ambitious 90-day plan that included starting a Christchurch office. A decade later, that plan has come to life. With a recent promotion to Head of Advisor Relationships – South Island, Penny now leads a team of four, aiming to ‘take the South Island by storm’ in tax payment solutions.
How are you feeling about your new leadership role?
I am so excited! It’s a little nerve-wracking because, while the investment is in the South Island, it’s also an investment in me. But I always feel valued and supported by TMNZ to work hard and do my job well. Throughout my promotions (Business Development Manager, Senior Client Relationship Manager, and Regional Manager), I’ve received ongoing support, great communication and connection with the wider team , and flexible working hours, which have allowed me to manage maternity leave, complete my Bachelor of Commerce in Accounting, and most recently, secure office space in Christchurch.
What’s the best thing about your job?
I love interacting with people; my clients are down-to-earth and genuine. I enjoy helping businesses with tax; it’s rewarding to hear how TMNZ supports them to grow or navigate tough times.
What does it mean to you to be a female leader in accounting?
It’s really special. I love networking with other female leaders in the industry. At TMNZ we have held a number of events where we acknowledge female leaders within the accounting and tax industries. I’ve witnessed more and more women rise in the industry, and now that’s me too, so I’m proud.
What does your promotion signal about TMNZ’s growth and success in the South Island?
From 2015 to 2021, I was the primary person managing accounts in the South Island. In 2022, I gained the support of Isabella Prichard (Customer Growth Manager,Auckland) to reach more clients. We work exceptionally well together and wouldn’t be where we are now without her ambition, enthusiasm, and drive.
While we have done well to spread the word about TMNZ’s provisional tax solutions across the South Island, there are still many people and businesses that don’t know how we can help them. Now, we have Harry Macgregor (Customer Success Manager,) and Lexie Weaver (Customer Success Consultant) on board in Christchurch.
TMNZ’s investment shows the faith they have in us and our ability to take the South Island by storm.
What did you take into account when hiring new team members?
It’s so important for our team to be able to relate to and care about people regardless of whether they’re paying $500 or $5,000,000. Tax can be a stressful topic for people, so we need staff who are compassionate as well as qualified.
Lexie, a science graduate from Victoria University, has empathy in spades and great problem-solving skills, and Harry, a Chartered Accountant, can walk into a room and start a conversation with anyone. It’s exciting to have a combination of knowledge and strong interpersonal skills.
How are you going to be supporting South Island businesses?
I have lots of ideas, but first and foremost, we’re going to be visiting the regions, listening to people’s pain points, and figuring out how we can help solve them.
We’ll be planning more events so we can get to know our clients in a more informal setting.
How do you maintain a good work/life balance?
My non-negotiable is a group fitness gym session in the morning. It’s the only time of day when my mind’s not racing; for 45 minutes, I’m just trying to survive the workout! I have amazing support from family and friends to help me maintain self-care amongst the chaos.
Please describe in three words how you’re feeling about the next 90 days.
Primed. Optimistic. Excited.
How can people get in touch?
I’d love to chat to anyone interested in learning how TMNZ can support their business (or their clients businesses) through our smart tax payment solutions. Please contact us here, and ask to speak with Penny.
From left: Penny Ineson—Head of Advisor Relationships South Island, Harry Macgregor—Customer Success Manager, Lexie Weaver—Customer Success Consultant
Enhancing financial flexibility for a healthcare services provider
The situation
The Finance Manager at a Healthcare Services business in Auckland, began working with TMNZ five years ago when the business experienced unexpected fluctuations in their retail operations. The business was looking for ways to maintain good cashflow while supporting the international group’s financial position.
The challenge
During the 2024-25 fiscal year, the Finance Manager was juggling many financial priorities, such as:
- meeting quarter-end, half-year, and year-end cashflow targets without incurring external debt
- maintaining tax compliance while optimising the balance sheet.
The solution
They chose to leverage TMNZ’s Tax Drawdown solution because:
- TMNZ provided more efficient and easier access to funds compared to other finance channels
- the solution helped optimise the balance sheet position, providing access to short term cash rather than long-term bank loans
- significant administrative costs were saved, including legal fees and bank covenant reporting requirements
- they could maintain their tax deposit date after repaying the drawdown.
The results
By using TMNZ’s services, the Healthcare business achieved:
- enhanced support for the international group’s financial position, contributing positively to the group’s risk profile
- the ability to temporarily access funds, which was highly valued by the international group’s treasury team
- improved cashflow management without incurring more costly third-party debt.
Your key takeaway
TMNZ’s solutions provide flexible and efficient tax management, aligning with business needs and supporting financial stability without the constraints of traditional finance channels.
For more on how our Tax Drawdown solutions can help your business, go here.
Utilising future tax to create working capital in the real estate industry
Working scenario: Bay Vista Real Estate
The situation
Emma runs a real estate agency in Auckland with 12 agents. The business experiences significant income fluctuations, with summer months (December-March) typically generating 60% of annual revenue.
The challenge
During the 2024-25 tax year, Bay Vista faced:
- peak income during the summer months
- large commission payments to agents in December/ January
- lower winter income but consistent overhead costs
- two of their provisional tax payments due during quieter months
- a preference for flexibility to withdraw funds if new opportunities arose.
The solution
Emma chose a TMNZ solution which allowed her to:
- delay payment of provisional tax due in August until a time when the business was earning revenue
- deposit $180,000 during the peak summer months:
- $100,000 in December
- $80,000 in January
- earn interest on deposited funds
- maintain flexibility to withdraw funds for a new investment opportunity
- ask TMNZ to allocate tax to the correct payment dates once the business’s income tax liability is known.
The results
Emma continued her business growth plans, while she also:
- earned interest on deposits in excess of what her bank was offering
- better matched tax payments to income patterns
- reduced her stress during quieter months
- protected her working capital during winter
- simplified the tax planning process
- created a tax savings discipline for the business
- rested easy knowing no IRD interest or penalties had been incurred.
Going forward, the business can use TMNZ annually as part of growth plans and cashflow strategy.
Your key takeaway
By matching peak periods with future planning, you can earn interest and create a facility to fund business growth when opportunities arise.
For more on how our tax solutions can help your business, go here.
*This scenario is a fictional example created to demonstrate how tax management solutions work to meet unique circumstances in a range of industries.
Managing uncertainty in tax and costs in the construction industry
Working scenario: Wilson Construction.
The situation
James operates a commercial construction company in Hamilton with 45 employees. The company experiences significant variations in monthly income based on project completion milestones. If clients pay late, this further stresses cashflow.
The challenge
For the 2024-25 tax year, Wilson Construction faced:
- uncertain provisional tax obligations due to uncertainty on when income will be earned
- a large variation between estimated profit ($1.8M) and actual profit ($2.9M) when a project was delivered ahead of schedule in the 2025 financial year, rather than the 2026 financial year as expected
- cashflow regularly tied up in materials and labour costs
- Inland Revenue’s prescribed instalment dates that were not aligned with project payment schedules.
The solution
James opted to manage their tax payments through TMNZ because:
- TMNZ allowed flexible payment dates throughout the year
- the company could make 20+ smaller payments instead of 3 large instalments
- they made payments after receiving project milestone payments
- there was no need to estimate their annual tax liability upfront
- they could change payment amounts at any time based on actual cashflow.
The company made 24 payments ranging from $15,000 to $45,000. They timed payments to follow major project milestone payments and adjusted payment sizes based on project profitability. The total tax paid was $812,000.
The results
James enjoyed better cashflow management, as well as:
- reduced stress around provisional tax deadlines
- no Use of Money Interest charges or late payment penalties
- maintaining a strong working capital position
- better aligned tax payments with business income patterns
- avoiding drawing on construction bonds or expensive bank facilities.
Your key takeaway
Using TMNZ solutions, and seasonal financial planning, tax obligations can be managed to align with business and project outcomes, not IRD deadlines.
For more on how our tax finance solutions can help your business, go here.
*This scenario is a fictional example created to demonstrate how tax management solutions work to meet unique circumstances in a range of industries.
Reducing the cost of funds for a dairy farm
Working scenario: Henderson Dairy Farm.
The situation
The Henderson family operates a 650-cow dairy farm in Southland. They recently invested in a new milking shed automation system and expanded their herd, creating irregular cash flow patterns during the upgrade period.
The challenge
In the 2024-25 season, they faced:
- $280,000 investment in automation equipment
- an additional $150,000 for herd expansion
- a provisional tax payment of $165,000 due March 2025
- expected lower income for the next few months, picking up in October
- bank facilities already used for farm improvements
- needing to maintain working capital for winter feed.
The solution
The Henderson’s worked with TMNZ to:
- finance the full $165,000 provisional tax payment
- secure 5.6% interest rate (vs IRD’s 10.88%)
- structure repayment to align with improved monthly income
- use TMNZ’s tax finance solution as an alternative funding source.
The results
The Henderson’s saved approximately $4,950 in interest compared to IRD and bank overdraft rates. They also:
- preserved their working capital for winter feed purchases
- maintained a good standing with existing bank
- protected their new automation investment
- avoided selling stock at suboptimal time
- better aligned provisional tax payments with their income cycle.
Your key takeaway
By creating a long-term plan to address variabilities in cashflow, you can plan ahead and secure lower interest on funds to cover costs.
For more on how our tax solutions can help your business, go here.
*This scenario is a fictional example created to demonstrate how tax management solutions work to meet unique circumstances in a range of industries.
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.
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.
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 9.89% (as at 8 May 2025) 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:
- similar to the interest rate charged by a bank for a residential mortgage; and
- 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:
- 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.
- 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).
- 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.
How you can use tax pooling like a savings account
In business, cash is king, and being able to access funds quickly in a crisis can mark the difference between success and failure. In an unpredictable world, having the ability to access cash during challenging times can be priceless.
With tax pooling, companies can easily request refunds of provisional tax payments they have made at the year to date without waiting to file their tax returns. They can receive their refunds within a matter of days.
Tax can be one of the largest expenditure lines for a business, so flexibility is vital.
In this economic climate, it’s far from ideal to have large sums tied up with Inland Revenue (IR).
What if you can’t access the money in an emergency?
What if your profitability projections trend down over the year, meaning you’re likely to overpay?
For taxpayers with a 30 June year-end, the first instalment of provisional tax is due on 28 November. Every business and sole trader should ask themselves these questions, especially if their work is seasonal or cyclical in nature.
Businesses should also think about the accessibility of their funds if their income is difficult to predict or fluctuates due to factors such as commodity prices, adverse weather events, or the exchange rate.
Accessible tax money
Depositing tax payments into a tax pool can form part of an effective risk management strategy in times of uncertainty.
Look at it like depositing into a savings account with the added benefit of eliminating late payment penalties and IR interest. You can still access your funds if you need to, you’re covering yourself for tax time and possibly extending your time to pay.
How depositing provisional tax into a tax pool works
Tax pooling operates with the blessing of the New Zealand tax department. TMNZ has been a registered provider of the service since 2003.
Companies deposit their provisional tax payments into a shared pool instead of directly into their own IR account.
Each payment is date stamped as at the date it is made into the pool (e.g., 28 November). Funds are held in an account at the IR. This account is managed by an independent trustee, Guardian Trust.
A taxpayer holds their payments in the pool until it instructs TMNZ to transfer their deposits to their own IR account.
Taxpayers can request a refund from TMNZ of provisional tax deposits held in the pool at any time without having to file their tax return or an estimate with IR.
Refunds may be subject to meeting anti-money laundering requirements. (Corporate taxpayers also need to be mindful of imputation credit account impacts when requesting a refund of tax they hold in the pool).
A taxpayer typically instructs TMNZ to transfer their tax deposits to their own IR account once they finalise their tax return and know the amounts required at each instalment date to satisfy their liability for the year.
As the tax being transferred from the TMNZ tax pool to a taxpayer’s IR account has been date stamped to when it was originally paid into the pool, IR recognises it as if the taxpayer paid the whole amount on time.
This remits any IR interest and late payment penalties showing on the taxpayer's account.
Access previously paid funds
If you’re short on cash, tax pooling also allows you to temporarily withdraw deposits you hold in our pool.
You can access the amount of provisional tax funds you have deposited (minus an upfront interest cost). You also have the option to restore your deposit at the original deposit date once your cashflow situation has improved.
Buy some time
When preserving cashflow is high on the agenda, you can use a tax pool to defer upcoming provisional tax payments to a date in the future without incurring late payment penalties.
For example, someone with a 7 April terminal tax date could have up to 75 days from that date to settle their provisional tax.
Earn more interest if you’ve overpaid
If you have surplus tax remaining in the pool once you have transferred money to the IR to satisfy your liability, you can earn interest above the IR’s credit interest rate by selling the excess tax to other pool members that have underpaid for the year or have received a notice of reassessment from the IR.
Please note that this is subject to market demand.
The purchasing taxpayer can reduce the interest cost faced on their underpayment significantly when applying this tax against their liability. This also eliminates any late payment penalties.
Overpayers earn more interest while fellow taxpayers pay less. Everyone’s a winner!
Find out more
To learn more about managing your provisional tax, check out our calculating provisional tax guide and cashflow management tips for businesses.
Alternatively, please get in touch with our friendly support team if you have any questions. We're always happy to help.
Manage IR exposure with corporate tax pooling
With the 28 November provisional tax date fast approaching, now’s the perfect time to talk to larger clients about the benefits of TMNZ corporate tax pooling.
Tax pooling is an Inland Revenue-approved system to help New Zealand businesses manage their provisional tax. Instead of paying the IRD directly, taxpayers can purchase overpaid tax from other tax pool members and pay into the tax pool when it suits them.
As some businesses overpay tax when they have funds to spare, they help to cover other taxpayers that need a bit more time to meet their obligations. We like to think of it as businesses helping businesses.
TMNZ is proud to be New Zealand’s original tax pool, pioneering the concept in 2003. We haven’t looked back since, helping large businesses, SMEs, and sole traders with tax management.
With tax pooling, businesses that can’t meet their provisional tax liabilities can purchase tax from those that have overpaid. This is charged at a lower interest rate than the IRD’s use of money interest charges, and companies also avoid late payment penalties.
There are advantages on both sides of a tax pool. Companies that have overpaid into our pool can also earn more interest on their surplus tax than if they had paid the IRD directly.
Clients that experience volatility or pay substantial amounts of provisional tax (e.g., more than $100,000 at each date) can reduce their exposure to use of money interest by paying provisional tax into the Guardian Trust/TMNZ tax pool account at Inland Revenue (IRD) rather than directly into their IRD account.
In summary, here are all of the ways corporate tax pooling is great for large companies:
- Companies earn more interest on surplus tax than they would if they overpaid the IRD.
- Tax can be purchased if businesses have underpaid income tax.
- Tax can be swapped across provisional tax dates to reduce exposure to use of money interest.
- Overpaid tax can be refunded within three to five days — without filing a return.
- Businesses can access TMNZ’s in-house expertise for corporate tax pooling advice on how to optimise their provisional tax payments.
- Money is deposited in the TMNZ tax pooling account at IRD.
What’s more, by using the TMNZ tax pool, you and your clients are also helping to give back to New Zealand. All our profit is invested in the Whakatupu Aotearoa Foundation, supporting social and environmental causes.
Contact us today to find out how TMNZ tax pooling can help your clients.