Date: 30th January 2018
The Government wants the new tax system to fit in with how businesses operate, and not the other way around.
Provisional tax is being reformed, so that small businesses have a choice of the new pay-as-you-go option for provisional tax payments. This option applies to small businesses with a turnover of less than $5 million p.a. and comes into effect for payments from 1 April 2018. This will coincide with the two monthly accounting
software changes at IRD, so businesses will be prompted to make the right tax payment generally at the same time as GST is paid.
This will help small businesses tailor payments to their real circumstances, and not estimated figures. If a small business chooses this option and pays their tax on time, the Use of Money Interest won’t apply. Many businesses choose the “standard” method for calculating provisional tax. They also won’t be subject to the use of money interest if their annual tax liability for the year is under $60,000 and their tax is paid on time.
For taxpayers with a tax liability over $60,000, and using the standard method, the Use of Money Interest also won’t apply, provided their tax is paid on time.
‘Bout time we reckon!
Thanks for Auckland Chamber of Commerce for these notes.
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