TMNZ

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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Tax loss carry-back scheme: Important considerations

Tax loss carry-back scheme: Important considerations 1200 630 Lee Stace

Standard imputation (ICA), ownership continuity and grouping rules still apply under the new tax loss carry-back scheme, while anyone who overestimates their loss will face IRD interest (UOMI) from the date of their first provisional tax instalment for the previous year. Moreover, company profits already paid out via shareholder-employee salaries or dividends are unable to…

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Small Business Cashflow Loan Scheme: Do your homework first

Small Business Cashflow Loan Scheme: Do your homework first 1200 630 Lee Stace

A former economist at one of New Zealand’s largest banks has a warning for someone considering the Small Business Cashflow Loan Scheme: It could limit your future borrowing capacity. That’s because banks may decline lending to anyone who has this type of debt on their books, as IRD may have first collection rights as a…

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TMNZ virtual roadshow: Tony Alexander talks post-COVID-19 economic recovery

TMNZ virtual roadshow: Tony Alexander talks post-COVID-19 economic recovery 1200 620 Lee Stace

The increase in New Zealand’s net debt to GDP ratio over the next four years is not the bogeyman some are making it out to be, nor will the Government necessarily have to increase taxes to pay off what they are borrowing. That’s according to one of New Zealand’s leading and respected economists, Tony Alexander,…

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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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COVID-19: How tax pooling can still help taxpayers

COVID-19: How tax pooling can still help taxpayers 1344 908 Lee Stace

IRD may be taking a more flexible approach in terms of its interest (UOMI) remission for taxpayers grappling with the financial impact of COVID-19 – but any request for relief will still be at its discretion and on its terms. As such, an IRD-approved tax pooling provider such as Tax Management NZ (TMNZ) can assist…

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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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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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