provisional tax

GST ratio timeframe extended

GST ratio timeframe extended 1200 630 Lee Stace

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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COVID-19: IRD extends tax pooling deadline

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

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

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

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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Image: IRD system

IRD system issues affecting tax pooling

IRD system issues affecting tax pooling 1200 630 Lee Stace

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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UOMI remission guidance: IRD overlooks provisional tax scenario

UOMI remission guidance: IRD overlooks provisional tax scenario 1344 814 Lee Stace

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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Harrison Grierson mitigates provisional tax risk

Harrison Grierson mitigates provisional tax risk 1200 630 Lee Stace

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

Coffee with Tsarina at Shore Accounting Solutions 1200 630 Lee Stace

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

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

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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Image: COVID-19 update

COVID-19 update: Devil in the detail with UOMI remission

COVID-19 update: Devil in the detail with UOMI remission 1344 756 Lee Stace

Update as at 14 April 2020 after IRD clarified its position following the publication of this article Someone who is struggling to pay tax on time due to COVID-19 will have to engage with IRD and agree to the terms of a payment plan if they want to receive a remission of interest (UOMI). Given…

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Standard uplift: When 105 percent uplift payments are less than 110 percent payments

Standard uplift: When 105 percent uplift payments are less than 110 percent payments 1200 630 Lee Stace

IRD will sometimes apply the 105 percent standard uplift calculation (CY-1) retrospectively when determining what’s due and payable at each provisional tax instalment. This happens in situations where CY-1 payments turn out to be less than 110 percent uplift payments (CY-2). When this is the case, IRD’s system will automatically overwrite the CY-2 calculation once…

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