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.