Tax Pooling

Tax Bills Catching You Off Guard?

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Tax Pooling

We often see poorly managed cash flows hurting our client’s bottom lines. If you would like to better manage your business’ cash flow, Tax Pooling may provide some attractive solutions. After a free consultation, a member of our team can evaluate how Tax Pooling may solve some of the problems you’re encountering.

How does it work?

“Tax pooling is the framework Inland Revenue established to help taxpayers meet their provisional tax obligations. Instead of paying provisional tax directly to Inland Revenue, Taxpayers can make payments into a tax pool. Once taxpayers know exactly what they need to pay in provisional tax, they transfer this out of the tax pool and sell any surplus to someone else (typically for a return greater than the Inland Revenue credit interest rate they would otherwise receive)”.

Tax Traders, Our tax pooling partner

The Benefits of Tax Pooling

Utilising the flexibility of tax pooling can have a handful of benefits for your business, such as:

Deferring tax payments; 
When used correctly, Tax Pooling can be thought of as a pre-approved overdraft facility. The funds you put in a Tax Pool can be easily withdrawn to help with cash flow.

Reducing your borrowing costs;
Tax pooling has lower interest rates than IRD and most other lenders. This benefit of Tax Pooling can help a range of clients with the fluctuating costs of running a business.

Saving on IRD penalties and UOMI;
If you have underpaid tax, you can save up to 30% on IRD’s UOMI (use-of-money interest) and penalties by using Tax Pooling. In the case of underpaid tax from prior years, you can purchase back-dated tax with cheaper interest rates and avoid UOMI completely. This is because Tax Pooling allows for far greater flexibility than making payments directly to Inland Revenue.

And increasing the returns on any overpayments
If you overpay your provisional tax into the tax pool, it can be sold to other buyers for up to double of what Inland Revenue will pay you. This is another instance where Tax Pooling offers more benefits and flexibility to business owners than IRD.

Want to know more?

Our dedicated team, paired with the expertise of Tax Traders, can create practical and effective Tax Pooling solutions for your business. Contact us now, for a no obligation discussion about how we can help your business thrive.

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