Tax Payment Management
Tax Payment Management
June 18th, 2020
Becky Zhang, CA
Some taxpayers are facing cash flow difficulties in the wake of the Covid-19 pandemic and the Government has decided to help you.
We know tax can be time consuming and confusing for some clients. We want to help you manage your tax obligations and give you peace of mind over your tax affairs, so you can concentrate on growing your business.
If you had a terminal tax date of 7 April 2020 and haven’t been able to pay your tax - you now have now have until 7 April 2021 to satisfy your liability through the tax pooling system.
If you are using tax pooling services such as our tax pooling partner’s TMNZ’s Flexitax® or Tax Finance services you normally you have just 75 days after your terminal tax date to pay. For those with a 7th April terminal tax date that would be 7th July 2020. Now you have until 7 April 2021 to satisfy your Flexitax® or Tax Finance arrangements for the 2019 tax year.
Like the wage subsidy there are some eligibility criteria. These are:
- The extension is subject to a taxpayer completing an application form;
- You must have experienced – or expect to experience – a significant decline in actual or forecast revenue due to COVID-19 between January 2020 and July 2020 that either:
- Prevents you from satisfying your existing arrangement for the 2019 tax year with TMNZ within the normal legislative timeframe; or
- Meant that prior to this extension, you were unable to enter into an arrangement for the 2019 tax year with TMNZ.
If you have received the Government wage subsidy, then this will satisfy the requirement of a reduction in revenue due to COVID-19.
If you have not, you will need to confirm that, after meeting your on-going business expenditure, you DO NOT have any of the following immediately available to pay your tax obligation:
- Cash reserves
- Insurance proceeds
- Banking facilities.
3. You must have your TMNZ arrangement for the 2019 tax year in place on or before 21 July 2020. Our recommendation is that you set this up as soon as you can.
4. You will need to supply a cash-flow forecast (or other comparable information if you are a small business).
IRD is asking TMNZ to collect and check this cash-flow forecast as it wants proof that the taxpayer requesting an extension will have the funds available to meet their liability within the new time-frame.
You must supply this forecast even if you received the wage subsidy.
If you would like our help with any aspect from the application form or preparing your cash flow forecast please contact us by sending your contact details to [email protected]
One of our team members will call you back and make arrangements to assist you.
Disclaimer: This article is correct as at 17 June 2020. It is subject to change. We will issue an update should we receive new information from IRD regarding the extension of the 2019 tax pooling deadline.
Becky graduated from Auckland University with a Bachelor of Commerce Degree majoring in Accounting and Taxation. Upon the invitation from Auckland University, she completed Bachelor of Commerce Honours Degree in 2010 and later worked as a commercial accountant in the New Zealand tourism industry.
In 2013, Becky joined Lynch and Associates and started her accounting career in public practice. She speaks Mandarin and understands Cantonese and likes to provide her clients with valuable and innovative advice and support the success of their business.