Tax pooling

Estimating your provisional tax can be difficult. Pay too little and you will be hit with use of money interest (UOMI) and other penalties; pay too much and valuable working capital is locked up at the Inland Revenue earning a meagre return.

The solution is to deposit your provisional tax payments into the Tax Pooling Solutions (TPS) tax pool to reduce your exposure to UOMI and increase your return on overpayments.

Have you:

  • Underpaid?
    Save up to 30% on your UOMI bill by buying the tax you need from the TPS tax pool instead of paying Inland Revenue UOMI.
  • Overpaid?
    Increase your return on overpayments by selling excess tax for up to double what the Inland Revenue will pay you in UOMI.
  • Got cashflow issues?
    Treat your tax payments as a pre-approved overdraft facility – the funds can be withdrawn and financed at competitive rates at any time.
  • Paid tax on the correct dates?
    Swap excess tax payments for tax on a later or earlier date and maximise your returns.
  • Estimated correctly?
    TPS will transfer your tax payments from the pool to your taxpayer account at the IRD at no charge.

If any of these apply to you, then TPS is an ideal, hassle free, tax pooling or financing solution.

Depositing into the TPS tax pool is free and you will never pay more than if you had paid directly into the Inland Revenue.

Why use tax pooling and TPS?

  • Higher return on tax overpayments
    Receive more than the 1.62% the Inland Revenue will pay.
  • Lower cost on tax underpayments
    Eliminate late payment penalties and pay an interest rate lower than the 8.27% the Inland Revenue will charge.
  • Swap tax between payment dates and tax years
    To save money and ease the tax management process.
  • Faster refunds (3-4 working days).
    If you have overpaid your provisional tax get a refund when you want rather than waiting for the Inland Revenue to process your refund after you file your terminal tax return.

With TPS there are no up-front registration costs, monthly charges or application fees. If you deposit into the TPS tax pooling account and have no need to purchase or sell tax then we transfer or refund out of the pool at no cost.

How does tax pooling work?

  • 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 if you have any questions.

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.