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Eligibility for AIM

Should anyone be able to use AIM?

While AIM will initially be available to businesses under the $5m threshold due to the commonality of software programs, we are interested in submissions from larger taxpayers with bespoke systems on whether they would use AIM and what they would consider reasonable in terms of accuracy with adjustments required during the year.

For more detailed policy analysis and feedback opportunities in relation to the eligibility of larger taxpayers, click here

Do you think that AIM provisional tax option should be available to anyone who is willing to make the required tax adjustments?

Comments

Ronise Paul
YES

Do you agree with this comment?

  • agree42
  • disagree3
3 months ago
Dean Johnson
AIM should also be available to individual (not company) provisional tax payers. Those individuals with volatile income can be heavily penalized by the provisional tax system, both from a good year followed by a poor year and from fluctuations within a year. The current system assumes income is earned evenly throughout the year, so if you use the Estimate method and have a quiet start to the year you end up "under paying" provisional tax and could suffer penalties. The AIM method could work very well for individuals as well as companies.

Do you agree with this comment?

  • agree55
  • disagree3
2 months ago
David Hutton
I agree. What is described is exactly my situation - fluctuations within and between years.

Do you agree with this comment?

  • agree4
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2 months ago
Debbie Dawson
Agree with Dean - that fluctuations with small businesses are very common. Many of my clients 'shut down' over Christmas for about three months so that heavy payment early in January is always difficult.

Do you agree with this comment?

  • agree4
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2 months ago
DC
Yes I think it should be available to everyone from self employed through to businesses, but no minimum in income levels...so you could do it with an income of anything, and far less than $5m!! I'd also rather provide feedback on a non public forum too when it come to tax feedback but good to be able to!

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2 months ago
Heather Clinton
I also am a contractor with sometimes wildly fluctuating income, so it would be very useful for individuals, who can least sustain over-payments and estimation penalties etc.

Do you agree with this comment?

  • agree1
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2 months ago
Peter2
Absolutely needs to be available to self-employed people and those who receive a shareholder salary. I never know how much my annual income will be until the end of the year. So some years pay too much provisional tax and sometimes not enough.

Do you agree with this comment?

  • agree2
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2 months ago
Victoria
Why not companies? Many small businesses are run as a company and they also have fluctuating income...

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1 month ago
Alastair Bell
yes, up to the thresshold

Do you agree with this comment?

  • agree1
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2 months ago
Ben Shore
All taxpayers should be able to use AIM and in fact I would scrap the existing prov tax system and make AIm compulsory. It should be aligned with an entity's GST returns so it is paid either monthly, 2 monthly or 6 monthly at the same time GST is paid.

Do you agree with this comment?

  • agree6
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2 months ago
Mark Halls
Optional yes, compulsory no!

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  • agree1
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1 month ago
Deanne Maule
Providing it is optional I believe any business should be able to avail themselves of this option.

Do you agree with this comment?

  • agree7
  • disagree3
2 months ago
David Gibson
There should be no threshold, AIM should be available to all no matter what their annual turnover.

Do you agree with this comment?

  • agree4
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2 months ago
Diane Blackmore
Agree that this must be used for individuals as well as companies. I have issues every year, always getting stung for penalties just because I didn't have a crystal ball. Start the year thinking income will be one way, and when its ends differently it costs - the penalties effectively increase the level of tax paid. There shouldn't be a situation where people are discouraged from growth/profitability because it will cause additional costs via penalties. Whilst overpaying is one way of avoiding the penalties, its prohibitive for most people to use cashflow in this way as many simply don't have it available. Likewise there shouldn't be a threshold - the smaller business owners and individuals are the most likely to have the type of fluctuations that the proposed system will benefit.

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  • agree5
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2 months ago
terry
Not for me. I don't have any problem with budgeting and making payments. I also don't use a software provider.

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  • agree3
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2 months ago
Tony MacLeod
Same here. My income is highly predictable and stable. I receive 12 equal payments a year, and outgoings are standard. I do not have any need for software and current system is fine. It's a 2 minute job for my accountant every year. Obviously the changes will suit many taxpayers, and that's fine as long as we can opt to continue present system.

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2 months ago
Michelle Hardy
Yes

Do you agree with this comment?

  • agree2
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2 months ago
Sharron Binns
Yes anyone should be able to access AIM. It would be much easier on the cashflow

Do you agree with this comment?

  • agree3
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2 months ago
Adrian K
Yes, this should be available to an tax paying entity.

Do you agree with this comment?

  • agree1
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2 months ago
Darren
Absolutely, how many times do we see business of all sizes go to the wall with enormous Income Tax or PAYE obligations. Business is business no matter how large or small and smaller businesses usually struggle to weather cash flow issues

Do you agree with this comment?

  • agree3
  • disagree2
2 months ago
Andrew Wilson
I agree with a pay as you go (in arrears) system for small businesses and individuals on provisional tax

Do you agree with this comment?

  • agree3
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2 months ago
Chris Callen
Yes, anyone should be able to use AIM. Companies with revenues below $5M should not be excluded. Thety form a huge part of New Zealand's economy and anything that the government can do to help their cashflow management should be encouraged. Fairness should prevail.

Do you agree with this comment?

  • agree3
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2 months ago
Keith Davidson
I think AIM should be available for anyone who self selects to use this scheme.

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  • agree2
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2 months ago
Cathy Ardern
I think everyone should be eligible to use AIM. It would definitely help small businesses keep track of their outgoings with no large payments to be made at the end of the year. Especially in the current economic climate where cashflow is up and down from month to down

Do you agree with this comment?

  • agree2
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2 months ago
Roz Denley
Yes

Do you agree with this comment?

  • agree2
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2 months ago
Jackie Cope
My huisband and I both receive overseas pensions which out us into the prov tax bracket, being able to pay monthy/fortnightly would be a much better way to manage our finances.

Do you agree with this comment?

  • agree3
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2 months ago
Jane Stevenson
I think the system should be available to all SMEs and the $5 million turnover threshold is too high. If a turnover threshold is required, then set it at say $500,000

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  • agree2
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2 months ago
Jane Fitzgerald
Yes

Do you agree with this comment?

  • agree2
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2 months ago
Colin Jackson
Definitely yes

Do you agree with this comment?

  • agree2
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2 months ago
Donna Blaber
Yes

Do you agree with this comment?

  • agree2
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2 months ago
Elizabeth Clarke
We currently use the ratio method and we find this more accurate than provisional tax payments. Aim sounds far too complicated for small businesses such as ours even though we use accounting software.

Do you agree with this comment?

  • agree2
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2 months ago
John Molloy
Yes

Do you agree with this comment?

  • agree2
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2 months ago
Andrew O'Donoghue
We have high turnover with a low margin. Income can also fluctuate year to year. Any business should be able to use the AIM method

Do you agree with this comment?

  • agree2
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2 months ago
Illya
The current 'guess your future income' is not working well for my business. Getting it wrong in either direction, and we are penalised. The pay-as-you-go method should be available to all small businesses and self-employed, even if one decides to do their own accounting. This can also tie in nicely with GST, with a single monthly submission/payment to cover both, based on actual sales/costs. No more guessing games, no more headaches.

Do you agree with this comment?

  • agree5
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2 months ago
Heidi Holbrook
Yes, this should be for individuals not just companies that earn over 5 million.

Do you agree with this comment?

  • agree3
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2 months ago
Jayson Bell
when you say "business" does this include Sole Trader as well?

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  • agree2
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2 months ago
Gordon McGregor
I think that the $5 million threshold is fair but should be reviewed annually to ensure it is capturing the intended companies.

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  • agree2
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2 months ago
Karen Morrison
I believe the service should be available for all companies large and small and self employed individuals, would help with managing cashflow

Do you agree with this comment?

  • agree3
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2 months ago
Andrew Hocken
Anybody whom needs to pay Provisional Tax should be able to use AIM. If that is an individual, company, partnership.....it should not matter.

Do you agree with this comment?

  • agree4
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2 months ago
Gary Hall
Yes I agree it should be open to all but perhaps a tabled structure for companies 2m upwards

Do you agree with this comment?

  • agree1
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2 months ago
Wendy Holden
Yes - all small business should be able to use AIM

Do you agree with this comment?

  • agree1
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2 months ago
Barry Holland
Anyone should be able to use AIM although I wouldn't feel that there would be any benefit for a low earning sole trader like myself.

Do you agree with this comment?

  • agree2
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2 months ago
HELEN WALLWORK
we are a "small business" but out annual revenue varies greatly from year to year - it can be $4m one year and $20m the next year but our business activity and accounting/tax processes are the same. we wouldn't want to switch back and forth between the "pay as you go" and the current system - especially given we may not know the revenue outcome of the tax year until we are well into it. We tender for our projects and don't know how many we will get and sometimes don't know how large they will be. Sometime we procure a large project part way through the financial year that could take our annual revenue from $4m to $14m - would this mean we would need to change provisional tax systems? that would be frustrating and prone to error.

Do you agree with this comment?

  • agree3
  • disagree3
2 months ago
Cliff
Self employed individuals should be able to us AIM. I run a small consulting business, paying GST on drawings. All income tax is consolidated back to personal tax. I know what my drawings are, I can surely know what provisional tax there is too.

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  • agree2
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2 months ago
Hayley Buckland
yes it should be available to anyone, in fact smaller companies and sole traders could benefit the most because provisional tax is a guessing game for smaller companies that can have sporadic earnings and hard-to-predict ups and downs. This would ensure people didnt end up with unexpected tax bills if they earned too much, nor would they overpay if earning too little. it will help with cashflow in small businesses, which is vital.

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  • agree3
  • disagree2
2 months ago
John Hudson
I totally agree with these sentiments, as a small company.

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  • agree3
  • disagree3
you disagreed.
2 months ago
Graham Paul
Yes! For the small business with fluctuating and unpredictable income, regular provisional tax requirements can be a nightmare because it can mean having to pay tax on income which has not yet been received (and may never be received). In my own case, I derive income from Australia which is sometimes paid gross on contract and incurs a NZ provisional tax liability, but is sometimes paid on payroll with PAYG deducted by the ATO and generates an overseas tax credit for me instead (and no NZ provisional tax liability), so my provisional tax liability is highly variable and unpredictable. A Pay-it-as-you-get-it style of payment for provisional tax would suit me far better.

Do you agree with this comment?

  • agree2
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2 months ago
Richard Wood
The AIM system should be available for any business in my view. The key reason someone would opt for the AIM system is because their income is sporadic and lumpy. It is quite conceivable that many industries have such volatility and would therefore benefit from the AIM system. This would include businesses that earn income based on success fees that could make a huge amount of money in a good year and very little the next (due to changes in the economy or timing issues on closing deals). Industries that might fall into this category might include, real estate, property development, business brokering, investment banking and others.

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  • agree1
  • disagree3
2 months ago
John McClure
Yes definitely , for a small to medium business cash flow is vital. Pay as you profit is easier to manage than a large amount in one hit. This method avoids the possible fluctuating market trends.

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  • agree3
  • disagree2
2 months ago
Henry Arkwright
Yes, absolutely. Currently my business is badly affected by a poor year following a good year. Everything is compounding now and it's hit the business hard cash flow wise. Cannot operate at full potential because of this.

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  • agree3
  • disagree2
2 months ago
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