Tax Pooling – Jump on in!
By Rosie Gallagher
Dealing with tax arrears isn’t just about negotiating the debt accrued – it’s about ensuring the right processes are in place to guarantee future compliance.
For instance, I recommend all of my clients operate a GST savings account, whereby, every time you are paid, 15% goes straight into an untouched savings account, just waiting for GST time to be paid in full and on time.
Income tax can be harder to manage though. That’s where Tax Pooling comes in.
You use this pool to pay or finance your provisional and terminal tax. There are no penalties charged by the IRD if you have underpaid, or if you have not paid your provisional tax on time. You save up to 30% on use of money interest (UOMI) when compared to the IRD.
The various ways of utilising tax pooling for your benefit are:
- Tax deposit – Deposit your provisional tax payments into the TPS tax pool and increase your return on overpayments.
- Tax purchase – Save up to 30% in use of money interest costs and avoid late payment penalties by buying the tax you need from the TPS tax pool.
- Tax swap – Increase your return/reduce interest costs by swapping excess tax payments made into any tax pool for tax on the date you require.
- Tax finance – Finance provisional tax payments at very competitive rates for up to 21 months. No application fees, no credit checks, no security required.
- Defer payments – Reduce your interest costs by purchasing back dated tax now, but deferring payment until a future date at a lower finance rate.
- Historic deposit finance – Holding a deposit in the TPS tax pool? Treat it as a pre-approved overdraft facility – the funds can be withdrawn and financed at competitive rates at any time.
We recommend an IRD approved tax pool company such as Tax Pooling Solutions – http://taxpooling.co.nz
Don’t drown in tax debt, we’re here to help. Call Rosie to address your tax debt today – 0800 829 277.