What is tax pooling?

What is tax pooling?

Tax pooling is the framework Inland Revenue established to help reduce concern and costs from exposure to the use-of-money interest (UOMI) in calculating provisional tax, end-of-year tax, and from reassessments of income tax. Tax Pooling Solutions (TPS) can save you use of money interest (UOMI) charged by Inland Revenue on underpayments of provisional tax and increase returns on overpayments of provisional tax. Tax pooling assist businesses with variable cash flow, or get access to additional funding arrangements, Tax Pooling Solutions (TPS) can also finance your provisional tax payments at very competitive rates with no security or guarantees required.

For Accounting Firms | this is a service extension that your firm can offer to your clients in managing their provisional and terminal tax payments with greater flexibility of how their funds are managed. TPS does not charge any registration, set up or management fees.

For Business Owners | you use this pool to pay or finance your provisional and terminal tax. There are no penalties charged by the IRD if you have underpaid or if you have not paid your provisional tax on time. You save up to 30% on UOMI when compared to the IRD.

Do you have provisional tax to pay

Contact our team today to get started with a no obligation consultation or just to ask for more information.

Here’s how Tax Pooling Solutions (TPS) is used by our clients.

Estimating your provisional tax can be difficult: pay too little and you will be hit with UOMI and other penalties; pay too much and valuable working capital is locked up at the IRD earning a minimal return.

The solution is to deposit your provisional tax payments into the Tax Pooling Solutions’ tax pool which is linked to the Inland Revenue to reduce your exposure to UOMI and increase your return on overpayments.

Underpaid?

Save up to 30% on your UOMI bill by buying the tax you need from the Tax Pooling Solutions’ tax pool instead of paying Inland Revenue UOMI.

Overpaid?

Increase your return on overpayments by selling excess tax for up to double what Inland Revenue will pay you in UOMI.

Tight cashflow?

Treat your tax payments as a pre-approved overdraft facility – the funds can be withdrawn and financed at competitive rates at any time.

Tax on the right dates?

Swap excess tax payments for tax on a later or earlier date you require and maximise your return.

Estimated correctly?

Tax Pooling Solutions will transfer your tax payments from the pool to your taxpayer account at Inland Revenue at no charge.

An additional benefit of using Tax Pooling Solutions is that if you have an amount of income tax to pay for a prior year due to a reassessment by Inland Revenue, you can purchase back dated tax from Tax Pooling Solutions at interest rates that are up to 30% cheaper than Inland Revenue’s UOMI rate. By purchasing back dated tax on the correct payment date, Inland Revenue will not charge you UOMI. This can be used for most tax types, not just income tax.

Contact our team today to get started with a no obligation consultation or just to ask for more information

Why Tax Pooling Solutions (TPS)?

  • We offer competitive rates for tax pooling deposits and financing services.
  • Our friendly team provides a solution focus and responsive service and are backed by the expertise of New Zealand’s leading professional tax advisers.
  • We are well placed to sell your overpaid tax due to our large client base through our seven offices across New Zealand.
  • Unlike some of tax pooling providers, we have no minimum deposit, purchase or finance amount.
  • Our online system has a reporting system that exports to Microsoft Excel, making it easy for you to access information.
  • Payments into the tax pool can be refunded at any time – there is no need to wait until your tax return is filed.
  • TPS trustee is Public Trust which is owned by the New Zealand Government so you can be sure that tax payments are handled by a secure and trustworthy entity.
  • Free registration and no membership fees.

 

Contact our team today to get started with a no obligation consultation or just to ask for more information.

What is the process of getting started?

Register online
First, you or your tax practitioner need to register you with TPS. Our online system will send you or your practitioner login details that will enable your account with TPS.

Automatic tax payment
As each of your tax payments fall due, you pay them into a bank account owned and operated by Public Trust. Your funds will be automatically transferred into the TPS’ tax pooling account at the Inland Revenue where they will be held on trust for you. To ensure that your tax payment receives the effective date for your provisional tax instalment, you can either pay your tax deposit one working day before the instalment due date or pay as a same day cleared payment on the provisional tax due date.

View statements online
When Public Trust has confirmed that your payment is in the TPS tax pooling account, the deposits will appear in a statement of your holdings that you can view in our online system.

Complete buy or sell tax requests
When you or your tax practitioner complete your tax return and you know whether you have underpaid or overpaid your income tax you can login and complete a buy or sell tax request depending on what you need.

Settle reassessments
You can also settle reassessments of any tax type. When you know the result of a reassessment you can choose to buy back dated tax to cover the reassessment and reduce your interest costs. You have up to 60 days from the date the reassessment is issued to settle any reassessment using tax pooling.

There are rules and timeframes around buying and selling tax. Contact our team today to get started with a no obligation consultation or just to ask for more information.

Deposit your provisional tax into the TPS tax pool to reduce exposure to use of money interest and penalties.

TPS’ services

  • Tax deposit
    Deposit your provisional tax payments into the TPS tax pool and increase your return on overpayments.
  • Tax purchase
    Save up to 30% in use of money interest costs and avoid late payment penalties by buying the tax you need from the TPS tax pool.
  • Tax swap
    Increase your return/reduce interest costs by swapping excess tax payments made into any tax pool for tax on the date you require.
  • Tax finance
    Finance provisional tax payments at very competitive rates for up to 21 months. No application fees, no credit checks, no security required.
  • Defer payments
    Reduce your interest costs by purchasing back dated tax now, but deferring payment until a future date at a lower finance rate.
  • Historic deposit finance
    Holding a deposit in the TPS tax pool? Treat it as a pre-approved overdraft facility – the funds can be withdrawn and financed at competitive rates at any time.

We are an Inland Revenue approved tax pooling intermediary. Public Trust is the custodial trustee of the TPS tax pool.