Many of you are using software these days that supports your management of your business…
Among many changes this year, Inland Revenue has also changed the way they charge penalties and interest on late paid provisional tax.
In the past, if provisional tax was paid late, there were usually no significant consequences. Now, under the new rules, there can be quite severe consequences, even if the payment is one day late.
Late payments mean you lose the “safe harbour” option and you will be charged interest from the first instalment, irrespective of which instalment is actually late.
Hence this reminder of how important it is to pay your tax on time, particularly those provisional instalments.
If you’re still sending payments by cheque, that’s both related and separate in that it’s hard to predict how long it will take a cheque to travel through the mail system, so another consideration for Provisional tax payments.
Inland Revenue has also announced that from 1 March 2020, they will no longer accept cheques so whichever alternate payment option you choose, you’ll still need to be organised in terms of setting up payments.
We have already had many cases of cheques not being processed on time and thus incurring penalties – it takes a lot of time and talking to obtain a satisfactory outcome for these cases.
As always, if you know any payment is going to be a problem, particularly your provisional payments, it’s better to advise our Tax Manager in advance if you can: [email protected]
In order to assist, and given the time of year we’re facing, here’s a quick reminder of Inland Revenue deadlines for January:
Large employers’ payment due. |
File employment information within two working days after payday.
|15 January||GST||Payment and return for November.|
|15 January||Provisional Tax||Instalment due.|
|20 January||PAYE||Small and large employers’ payment due. File employment information within two working days after payday.|
|20 January||FBT||Return and payment due.|
|28 January||GST||Payment and return for December.|