What is Tax Pooling for?
Tax pooling is used when you've underpaid your provisional tax - or if you haven't paid it at all
Why don't I just pay my tax to IRD direct?
If you find you've underpaid tax, or paid it late, IRD generally charge penalties. And interest. And interest on penalties. And interest on that. As you can imagine, it adds up pretty quickly.
When you pay IRD via Tax Pooling, IRD views the payment as if it was paid on-time. So, no penalties. The Tax Pool company also charges much less interest than IRD.
So, how does it work?
Do I have to pay it on a set date then?
TMNZ have something called FlexiTax, so you can pay as much as you like as often as you like.
Can I pay tax from past years this way?
Yes, TMNZ can help with provisional tax for the current tax year and one just completed.
What if I get audited or make a voluntary disclosure: can I fund my tax this way too?
TMNZ can also help with other tax years and types, provided there has been a notice of reassessment issued by Inland Revenue as a result of an audit or voluntary disclosure.
How do the Tax Pool people make their money?
They charge interest, naturally, but it is a lot less than what IRD charge. Usually, just a little over 1/2 of IRD standard rates.
Where do they get the money from?
Well, big corporates like the banks overpay their provisional tax. In the past, they would overpay it to IRD, and get a miserable interest rate. Companies like TMNZ came along and said "Hey, we'll give you a better rate than IRD." So, they said "OK." Then TMNZ, in turn, on-lends it to the little guys like us, and they pay their bills out of the difference.
Is this legit?
Yes. The service is government-approved and operates under legislation set out in the Income Tax Act 2007 and Tax Administration Act 1994.
Is the money safe?
Yes, all payments made to TMNZ are made into bank accounts administered by an independent trustee, Guardian Trust. With more than 125 years’ experience in New Zealand, Guardian Trust oversees the tax pool account at IRD in which payments are held. They authorise all payments and tax refunds, as well as transfers to taxpayer accounts. At no stage do TMNZ have any contact with, or access to, your payments.
Please see the document below, or contact us.
We recommend TMNZ for all your tax pooling needs. Visit tmnz.co.nz to find out more.
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