Working scenario: Bay Vista Real Estate
The situation
Emma runs a real estate agency in Auckland with 12 agents. The business experiences significant income fluctuations, with summer months (December-March) typically generating 60% of annual revenue.
The challenge
During the 2024-25 tax year, Bay Vista faced:
- peak income during the summer months
- large commission payments to agents in December/ January
- lower winter income but consistent overhead costs
- two of their provisional tax payments due during quieter months
- a preference for flexibility to withdraw funds if new opportunities arose.
The solution
Emma chose a TMNZ solution which allowed her to:
- delay payment of provisional tax due in August until a time when the business was earning revenue
- deposit $180,000 during the peak summer months:
- $100,000 in December
- $80,000 in January
- earn interest on deposited funds
- maintain flexibility to withdraw funds for a new investment opportunity
- ask TMNZ to allocate tax to the correct payment dates once the business’s income tax liability is known.
The results
Emma continued her business growth plans, while she also:
- earned interest on deposits in excess of what her bank was offering
- better matched tax payments to income patterns
- reduced her stress during quieter months
- protected her working capital during winter
- simplified the tax planning process
- created a tax savings discipline for the business
- rested easy knowing no IRD interest or penalties had been incurred.
Going forward, the business can use TMNZ annually as part of growth plans and cashflow strategy.
Your key takeaway
By matching peak periods with future planning, you can earn interest and create a facility to fund business growth when opportunities arise.
For more on how our tax finance solutions can help your business, go here.