Don’t Be Blasé About Tax Debt

When it comes to paying bills, we often tend to be blasé and put our financial responsibilities into the too hard basket.  Ignoring debt is the easy option at the time but eventually things catch up with you.  When it comes to paying tax, it is even more important to stay on top of your obligations to avoid potential tax debt.

So what happens if I do get behind?  You should try to avoid getting to this point, but it is likely the IRD will contact you if you miss your payments.

In most scenarios, tax debt will result in the following charges:

• late filing penalties and interest
• late payment penalties
• non-payment penalties

If you do receive a letter from the IRD, it pays to act quickly.  There may be a variety of payback options available to you. If you want to know more, let Nick know and he can work with you to get back in the black.

Tax due in April and again in May…  A bridge too far?

Many taxpayers get a terminal tax bill due 7 April 2015.  Then IRD insist you pay again on 7 May 2015 for provisional tax.  This could well be a bridge too far’ and your Cashflow just can’t take it.

We at the A + BAC have found a very easy and risk free funding option which is only for provisional tax and the IRD have approved it.  It is called Tax Finance.

By using Tax Finance (see Table below), you decide when you want to pay your tax (maximum delay of 10 months for 7 May).  The tax intermediary arranges your payment into their tax pool which is a special account with the IRD.  All you have to do is pay the interest cost upfront. Then there’s nothing to pay until your selected maturity date.  You can even use this as a form of instalment such as arranging tax finance for 6 months and then paying 1/6^th to Guardian Trust tax pool each month.  You won’t get any late payment penalties or IRD interest.

nick@abac.co.nz or on 0800 ASK NICK are the best ways to contact Nick to see how Tax Pooling can help you.