Provisional Tax – do you have a payment due?

As we look forward to the Christmas break, please don’t forget that on 15 January 2014 you may be required to make a provisional tax payment to the IRD if your balance date is 31 March. This is the second provisional tax instalment due for the income tax year ended 31 March 2014.

So who has to make a payment? Prima facie a taxpayer who had residual income tax of $2,500 or more in the prior income tax year (31 March 2013) will be required to make a payment to IRD. However, we all know prior trading history does not always reflect the current income year. There will be taxpayers out there who are not obligated to make a payment, yet are trading well and should consider making a payment to avoid penalties and use of money interest. There will also be taxpayers who are trading well down from last year, and should consider holding off on making a provisional tax payment.

Provisional tax is a complicated beast; if you are uncertain about your obligations please contact Walsh & Associates for further advice.