Are you due to pay 28 August provisional tax?

For many businesses, this will be their first instalment of provisional tax for the 2024 tax year. It’s important to stump up what you owe on this date. Inland Revenue (IR) won’t hesitate to charge steep interest and late payment penalties if you don’t.

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

1. Assess your cashflow

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

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

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

2. Be aware of the changes 

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

3. Know your methods to calculate 28 August provisional tax

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

4. Consider using tax pooling

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

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

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

5. If in doubt, consult a professional

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

If you wish to learn more about the provisional tax payment flexibility TMNZ offers businesses, email support@tmnz.co.nz or phone 0800 829 888.

Information in this article is correct as at 17/8/22. You should consult with your tax advisor concerning all tax matters. Read our Terms and conditions.