Tax Pooling: A Smart Solution for Cashflow Challenges This April

As the 7th of April 2025 approaches, many New Zealand businesses are feeling the pressure of the terminal tax deadline.

With income tax payments looming, cashflow challenges can become a significant concern. Fortunately, tax pooling offers a practical solution to ease this financial strain.

What is Tax Pooling?

Tax pooling allows businesses to defer their income tax payments without incurring late payment penalties and reduces interest charges from the Inland Revenue (IRD). Instead of paying the IRD directly, businesses make payments into a tax pool account held by a registered tax pooling intermediary. This way, they gain flexibility and reduce the financial burden during tight cashflow periods.

How Can Tax Pooling Help This April?

By using tax pooling, businesses due to make payments on the 7th of April 2025 can defer their terminal tax for up to 75 days past the due date. This extended payment period provides much-needed breathing room, helping businesses better manage their finances without risking penalties.

Key Benefits of Tax Pooling:

• Cashflow Flexibility: Defer payments without disrupting daily operations.

• Reduced Interest Charges: Lower the interest cost of late tax payments.

• Avoid Late Payment Penalties: Prevent IRD-imposed penalties.

• Expert Assistance: Your accountant can work with a tax pooling intermediary to streamline the process.

If your business is facing cashflow difficulties ahead of the April tax deadline, consider tax pooling as a strategic solution. With the ability to extend payments for up to 75 days, you’ll gain the financial flexibility needed to keep your business running smoothly.

Contact your Chester Grey advisor to arrange tax pooling and make the most of this valuable opportunity.