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Business Advisory team update

Risk and Reward - Reduce the cost of paying late terminal, provisional tax

Anyone who has been hit hard by Inland Revenue (IRD) late  payment penalties and use of money interest (UOMI) for unpaid or underpaid taxknows how crippling this can be.  It’s the last thing you want to happen.  However, using tax pooling to settle income tax liabilitiesreduces  your exposure to late payment penalties and UOMI, meaningit is  cheaper than paying the money directly to IRD. Tax pooling allows you to purchase tax from someonewho has  overpaid and then apply that taxto meet your liabilities.  As such, youcan eliminate IRD late payment penalties and significantly reduce UOMI costs by up to 30 percent.

If, having justpaid your third instalment of provisional tax for the 2014 year, you think youmight have underpaid at one of your earlier dates, you can top up at any time with Tax Management NZ (TMNZ)to eliminate late payment penalties and reduce UOMI  interest costs.  Those with unpaid 7 April terminal tax have until 16 June,2014 to eliminate late payment penalties and reduce UOMI costs through  TMNZ.

Contact us if you would like to talk through your tax plan andwant to know more about using tax pooling to manage your provisional tax.


 

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