Smaller businesses will have a new pay-as-you go option for provisional tax from 1 April 2018, and a raft of other tax changes kick in on 1 April 2017.
Business-friendly measures commencing 1 April 2017 include reducing or removing use-of-money interest for the majority of business taxpayers and removing the one per cent incremental late payment penalty for new GST, income tax, and overpaid Working for Families tax credits, says Revenue Minister Judith Collins.
“Use-of-money interest is often seen by businesses as unfair. Currently, even if a business pays the correct amount of provisional tax during the year they can still incur the interest. The combination of the accounting income method and the other provisional tax changes will reduce the impact of interest,” she says.
From 1 April 2018, a new way of calculating and paying provisional tax comes into effect. Called the Accounting Income Method, it lets businesses with gross income less than $5m use their accounting software to calculate their tax payments throughout the year. If you make the payments calculated by your MYOB software, you will not be liable for use of money interest.
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