Tax pooling
TMNZ tax pooling helps your business clients save money, time, and stress
If you’re an accountant, tax pooling with TMNZ can help ease your clients cashflow issues and keep money in their business for longer, all while saving on IRD late payment penalties and interest.
More cashflow flexibility for your clients
By using TMNZ’s tax pool, your clients can pay provisional tax whenever they need to, and we make sure everything is settled on time with IRD. Your clients get greater flexibility and control so you save time managing them in the long run.
Save on IRD interest and late payment penalties
If your client has provisional or terminal tax owing to IRD, they can save up to 30% on interest costs and eliminate late payment penalties altogether. Set up a tax pooling arrangement with TMNZ so your clients are better off.
Get some cover during tax audits
TMNZ has the largest tax pool in the country, with the oldest tax going back as far as 2009. This means that we’re in the best position to help your clients with any historic liability arising from a tax audit or voluntary disclosure.
Easy online tools and expert support
Create, save and confirm quotes online, track client savings, download monthly statements and get free advice and support on any tax pooling matters. You add value to your consulting service without increasing your workload.
Two ways you can help your clients with cashflow
1
Make your provisional tax payments match your business cashflow so you pay how and when it suits the business
Flexitax® gives you cashflow flexibility so your provisional tax payments suit your business, without worrying about IRD interest or late payment penalties.
You can choose to pay provisional tax in lump sums or spread out tax payments over time (up to 75 days after your terminal tax date).
The interest charged is tax deductible and based on competitive lending rates (lower than bank overdraft fees). Approval is guaranteed and no security is required.
2
Defer provisional tax payment dates so you keep money in the business for longer and reduce lending costs
Tax Finance allows you to take control over a future provisional tax payment date and gives the certainty of a fixed fee paid upfront.
Choose a preferred date to pay, and make your provisional tax payment on the date you chose. We then transfer back-dated tax into your IRD account so it’s as if you paid on time.
The fee is also tax deductible and based on competitive lending rates. Approval is guaranteed and no security is required.
John Farac helps his clients do tax on their terms
Learn more about Tax Pooling
History of tax pooling in New Zealand
The IRD-approved system of tax pooling has operated in New Zealand since rules for tax pooling and Government legislation were passed in 2003. Tax pooling was established to reduce the taxpayer’s exposure to Use of Money Interest (UOMI) and to offer a more flexible means of paying provisional tax.
If you are an accountant working on behalf of taxpayers interested in using the tax pool system, TMNZ can help as an approved tax pool intermediary. IRD only accepts approved tax pooling companies and TMNZ is the largest and industry-leading tax pooling service provider.
What is tax pooling?
Tax pooling enables you to deposit your provisional tax payments into an account held by an IRD-approved intermediary. Payments are date stamped which is why IRD treats it as being paid on time once the transfer from the tax pool to the taxpayers’ IRD account has been made.
Basically, the system gives you the option to pay into the tax pool when it suits you, instead of paying the IRD directly. Once you have deposited the payments into the tax pool, the intermediary will hold these funds in the account until you instruct them to transfer the money into your own IRD account. The payment will be considered “tax paid” once this transfer is made.
How does tax pooling work?
Tax pooling works by having a taxpayer deposit money with a tax pooling intermediary on its provisional tax dates, rather than paying it directly to the IRD. These payments are deposited by the tax pooling intermediary into a tax pooling account at the IRD.
Approved tax pooling intermediaries
For a person to act as an official tax pooling intermediary, they first must be approved by the IRD. The commissioner of the IRD must agree that the applicant meets the legislated criteria and is fit to operate a tax pool. Once the applicant is officially approved, they are given their own tax pooling account with the IRD.
Approved tax pooling intermediaries are legally required to protect the taxpayer’s payment details and personal information. This is a key rule stated within the legislation. This is why all payments to TMNZ go into trust accounts administered by Guardian Trust, New Zealand’s largest corporate trustee, which also oversees the TMNZ tax pool account at IRD.
TMNZ is the leading tax pooling intermediary in New Zealand and was the first ever tax pooling service approved by the IRD. TMNZ has set the standard for reliable, secure tax management, with the high-security systems in place to protect client’s funds. With innovative solutions and a dedicated team on deck, TMNZ is a top choice for business owners across the country. If you are interested in taking advantage of tax pooling, contact TMNZ today.
The Benefits of tax pooling
Tax pooling provides numerous benefits for taxpayers. The simpler, stress-free system has helped business owners successfully manage their provisional tax obligations for many years. It’s a better, easier way to pay tax.
The greatest advantage of depositing into a tax pool is flexibility. Tax pooling allows you to make provisional tax payments when it best suits your business cash flow, giving you and your clients greater control over tax and also helping save time in the long run. Ultimately, you decide how to make tax work for you and clients.
Tax pooling also saves you interest costs and completely erases the risk of payment penalties, including underpaid, missed or future provisional tax payments. You won’t have to worry about late payment penalties related to tax audits either, as you will have cover from the tax pool.
Tax pooling and UOMI(use of money interest)
If you are a taxpayer unsure about how much income tax to pay during the year, you run the risk of underpaying tax. This is because your provisional tax is only based off an estimation of annual profit.
If you have underpaid tax due to an incorrect judgement of your liability, you may be exposed to UOMI. Conversely, if you have overestimated the amount of tax you have to pay, the money you could be using for your business could be tied up at the IRD, earning less return. Either situation can place you at a financial disadvantage.
But tax pooling offers a solution for overpaying or underpaying tax. The arrangement allows you to balance overpayments by underpayments within the same pool, which will subsequently reduce costs related to UOMI exposure.
What tax payments can tax pooling assist with?
Various types of payments can be made to a tax pooling account. This includes voluntary provisional tax payments or normal provisional tax instalments, reassessments of income tax, deferrable tax and agreed delay tax. Payments can also be made for meeting increased obligations or reassessments of income tax revenue. However, tax pooling cannot be used for meeting regular tax payments where the amount due is known, such as PAYE or GST.
What our customers say about TMNZ
It is very convenient to top up p 1 2 and 3 and or terminal in arrears.
– Robin Seal
A great product to assist cashflow and minimise IRD interest and penalties.
– Angela Ransfield
The website is easy to use and any issues I have had are quickly sorted by your friendly call centre staff. Makes dealing with our clients tax easy!
– Cristy Campbell
Great product, works well for SMEs with cash flow issues and wanting to reduce penalties and interest on tax.
– Ben Shore
A great way to solve client tax issues.
– Kayleen Milner-Taylor