Back to Making Tax Simpler
AIM on a page

General comments

Comments

Hanna Krause
I've been running a very small business for some ten years now and while there are always some ups and downs and pay as you go would have been helpful in the beginning, at this point I don't find paying provisional tax as it is now much of a problem. I don't use accounting software and keeping track of income tax as I go or keeping a running inventory would add heaps of work for me. If there was a good, cheap, easy to use and safe accounting system available, possibly linked with the IRD I'd be happy to change my ways though, but for now I'm likely to stay with the old system if possible.

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Ben Schmidt
If it can be worked out along side GST then it seems like a great idea - much easier to budget for.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Grae Harrison
I'm all in favour of AIM. This is the most sensible way forward for provisional tax planning. My only concern is that IRD are limiting the threshold to turnovers of $5m. Its not clear whether the threshold is $5m and above or below $5m. If below $5m that will suit consultants like myself who's income fluctuates throughout the year. I cannot see how additional accountancy work is required that you wouldn't ordinarily do anyway in the course of running a business. I would prefer to pay provisional tax as earned. Much simpler all round. Good for business and good for the country.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Dan
I think this would make paying much easier and less stresfull.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Gordon Palmer
The present system works well for me. It is simple and quick. I don't want a more complicated system that involves more work. And NO system can accurately predict my provisional tax. The system ain't broke so don't fix it. at least give the option to stay on the present system

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Marilyn France
I think it's a wonderful idea. It won't work for everyone but many small businesses keep their records up to date throughout the year so it will make like much easier for them. If it is an "opt in" choice then it gives flexibility to those who would like it.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
ad
I am happy with my records and tax payments as they are. I don't use/need an accounting programme. I roughly calculate my tax on a weekly basis when I do my accounts and have the benefit of interest on the money and the ease of payment when requested

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Jan Berry
My income fluctuates from year depending on expenses so I would rather pay provisional tax at the end of the financial year.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Julia Dawson
I am a sole trader and have no problems with the current system. In fact I'm concerned that to check everything monthly will mean more work, more regularly. I also don't want to go to the expense of an electronic system when spreadsheets work perfectly well for my small amount of accounting.

Do you agree with this comment?

  • agree2
  • disagree0
2 months ago
Ewen McNeill
We are registered for a six-monthly GST return (like many small businesses I imagine) and also pay provisional tax with the GST return on that six monthly basis. That allows us to do all the tax-related paper work in two batches a year, around the two GST/provisional tax payments -- and to do the annual/end of year adjustments once a year in conjunction with the second GST return for the tax year. During those 6 month periods we simply keep a cash book and reconcile bank statements, and ensure the receipts/invoices are collected ready for processing at the end of the 6 months. This workflow is very efficient and we would definitely much prefer to retain it. The AIM option seems to imply that IRD will require that tax accounting be done, in detail, much more frequently, consuming more time on a regular basis, simply so that IRD can require paying provisional tax more often. We are definitely not in favour of IRD requiring yet more time be spent on tax accounting, particularly on a monthly or quarterly basis. Perhaps some businesses may want it as an option, but we very much want to see the existing option of six monthly tax accounting (GST returns) and annual adjustments/returns (in conjunction with our chartered accountant) retained, at least for all businesses that currently qualify for six-monthly GST returns. Ewen

Do you agree with this comment?

  • agree2
  • disagree0
2 months ago
Bruce Everett
The principal of the idea seems OK and using MYOB, we are pretty much up to date so I'm not sure there is much extra work. However as a small company in a growth phase, things change during the year so much, plus we want to allow our accountant to do their job and allocate & manage our tax return as required. AIM seems to pre-empt the role of the accountant so this proposal makes me slightly nervous from that perspective. But I have not spoken tour accountant about this so am uncertain how much of an issue this would be. I come originally from UK where there is not this system of provisional tax and I much prefer the UK system, where it is all retrospective and based on real figures.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Abi Rawles
I would love to spread the prov tax payments over the year - we are a seasonal business so the August payment is always a struggle for us.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Gary
No issues with the proposal, as long as the level of accounting compliance required by IRD does not create more cost/problems for the small business than what it is worth. i.e can be pulled directly from Xero or MYOB etc.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Andrew Dickie
Like idea of AIM. Should be straight forward to calculate ongoing liability. Small business with any turnover should be able to pay Provisional in this way

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Karen Irving
It is a great initiative! The current way has resulted in my closing the company and becoming a sole trader

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Janet Wilson
I'm not a business I work to care for my sister through ACC and have to fill in an IR3 as a self employed business would. I already pay my provisional tax weekly as I get paid because it's easier and I can't afford the huge lump sum payments you have to do throughout the year. I calculate probably higher then I might need to pay that way I don't get hit by a massive amount to pay back because my income increased from the previous year. It's much simpler I think

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Nicholas Michae...
As my income, on which I pay Provisional Tax, is in fact an Australian Defence Force Retirement Benefit Fund Pension I know exactly what I receive each fortnight in Australian Dollars. I'm forewarned twice yearly, in late December and late June, of any increase in the Australian CPI of what increase, if any, I'll receive. The only variable in this whole situation is the Australian/New Zealand exchange Rate. I would have absolutely no problem whatsoever in calculating Income Tax due on a fortnightly basis using a Payee Scale; then paying directly to the IRD.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Jackie Walsh
Yes, it will certainly help newer business where the 2nd year of tax can be a burden. Only factor of consideration is the accounting software needed. Will it be cost effect for a small business to be paying, sometimes, large fees for accounting software.?

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Andrew Hocken
The current system is most unfair especially when combined with penalty interest rates that are backdated to the 1st and 2nd Provisional Tax instalment dates. It is a punitive system that must change!

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Gary Hall
I think it is a good idea as my business has a fluctuating income, if we can pay tax on a more regular and even basis it will make it easier. What would happen if the income is down and a loss situation made a dent in the profit you have already made and paid tax on would there be a credit issued?

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Ian Petrie
Agree If we have up today information on P&L we can pay prove regularly.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Janise Nelson
I am unable to calculate our tax as I do not have an accounting programme. I do GST manually. My husband and I only have income from rent from commercial properties so doing the accounts is very easy. We do not have employees and money in and out is fairly similar each month. We do however like this idea as it would avoid the difficulty of having to pay gst, big tax payments and rates on the buildings all at the same time as happens now. This is a guessing game and means we have to keep more money in the current account than we need to. I am sure we can work with our accountant to sort this out but if we cant that is ok too.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
John Sendall
No it will not help us. We do not use an Accounting software. Just have a simple spreadsheet for a small number of transactions and pay Provisional Tax every two months. I am happy with the current system. The proposed will incur more costs and a lot more work

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Radu
Yes please do this it would be much better than the current prov tax cycles that are out of sync with reality, which can be very frustrating and stressful to deal with.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Jason
Yes , N.Z. is way behind on this . The question should be , can IRD with their make work for themselves type dinosaur system cope?!!

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Dave beattie
I think this is a great idea and will be very fair for small businesses like mine. I have no problem keeping more accurate accounts if it means irony get surprise tax bills or if I'm paying tax based on a good year in a year of hardship. This is definitely a step in the fright direction.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Alf Smit
No this should work for my business MyFuture Property Investmenmts.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
james talbot
It sounds reasonable. Would be great if added to GST data

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
jon
AIM is a great idea for my business and will allow better cash flow rather than large one off payments, especially since this year I had a lower income. However personally I disagree totally with provisional tax, why should anyone be paying tax on expected incomes in the first place, its unfair. The tax system should be based in arrears on actual incomes earnt in the past not on future. It would allow more companies the ability for growth.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Bev
Don't we pay as you earn already in Aug, Jan & Feb? Now you want us to pay a smaller amount more often. No matter how much you pay the process is just the same- so increasing the number of times will just add up to more time spent by us. Seems to me just another government dept. wanting to change things for the sake of change. Why not put some effort into processing our returns in a timely manner so if we overpay we get our 'refund' quicker- seems to me you hold onto it as long as you can which is free use of money without the charge (interest). Funny how if we don't pay promptly the reverse is true.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
HELEN WALLWORK
I would like to use the pay as you go provisional tax system

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Debbie Jefcoate
arkiwi@hotmail.com (link sends e-mail) Our business is very seasonal, with our peak in January, so for us, pay as you go based on accounting records makes sense.

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Shane
Hi I agree , my business goes in peaks and troughs with cash flow so I think that this is a great idea... I have issues understanding that how can you predict what you going to earn the next year

Do you agree with this comment?

  • agree0
  • disagree0
1 month ago
Christine Robinson
There should absolutely be an easy way that self employed people can PAYE - if AIM does this, then I'm in!

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Daniel Compton
This makes sense as an option to have. It would mean that I can pay tax as I get paid, and not end up with large tax bills when I may not have kept enough aside for them.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Employer of 3
Im pretty happy with the status quo. If people have trouble setting aside a percentage of their income for tax purposes then i can see a benefit in a voluntary system, but personally i wouldnt use it.

Do you agree with this comment?

  • agree2
  • disagree0
2 months ago
Genelle Bailey
I use Xero so this will be easy - please do it. :)

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Julie Holden
Prefer to keep things as they are as don't need the extra work along the way.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
C Williams
My income is very stable so am quite happy with the current simple system; no accountant, no software needed for me

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Jacky Caddick
Yes this is a great idea and would work well for me.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
bernie
Maybe maybe not, but no one has mentioned the lost of investment through out the year, will the IRD refund any over payments with interest, will there be penalties for under or incorrect payments like now. Depreciation adjustments are done by my accountant at the end of year. If every one has up to date data surely they work out the tax they will pay and put aside money for their tax.. prefer the present system!

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Martin Carr
Anything that makes paying tax simpler the better. I think that it should apply to all business irregardless of turnover and provided that there is an alternative method similiar to the present. ie a Business can opt for the path it wants. For small business and particularly in my previous experience for small set ups such as sole traders it would be much better to be able to pay tax in a similar way to gst. the current tax system is difficult for very small business because they may have uncertainty of income estimate provisional tax high and therefore have money tied up unnecessarily. Conversely there business gets penalised if the provisional tax is too low. A small business say providing professional services has small overheads and therefore should be able estimate their tax liability easily. Please think about these very small businesses and come up wit a pay as you go system regardless of turnover.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Andrew Forster
This would be fine if it is an optional way to pay tax account, as my income varies widely and is exacerbated by currency fluctuation. It would create a bit more work for me, especially if it involved the accountant throughout the year. I would suggest that it should be based on estimated income rather than an accountant signed off income, because this would likely increase the expense considerably through the greater accountant involvement. So whether I'd find it useful would depend on the detail.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
John Andrew
I am a little concerned as to whether the taxpayer would need to create accruals each tax period before calculating taxable income. It would be ok for those accounting on a purely cash basis, but i can see a heap of extra work looming if accrued income was needed to be included. Standard accruals would be ok for some businesses with evenly spread income, but i can see a small company who say has a really good month in the middle of a financial year ending up with tax to pay before the debtors have actually paid, and that could create some major cash-flow difficulties.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
cristina
This would certainly help my business as I have significant fluctuations in my income leaving me with significant overpayments or underpayment. I use an accounting package so it would not create any more workload, with minor adjustments for some expenses and depreciation being made at the year end.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Kelly Bentley
I agree fully with the pay-as-you-go scheme they're looking at implimenting, this would work for me who runs an extremely small business, and would love to see provisional tax payments out the window!

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Dale
What amazes me is how many comments there are from people who don't use an accounting system. Wow, when I think of how much time it took before Xero I wonder how we ever got any work done in the bad old days! The AIM proposal makes so much sense I say bring it on. I'm sure Xero will cope!

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
john weston
Most small businesses are on a payment basis for GST but accounts and tax have to be on an invoice basis. How would you deal with this as GST does not align with annual profits as a result. Making small businesses prepare their GST on an invoice basis is not practical as the preparation of each GST would take considerably longer to prepare. The payment basis of GST is the best from an accuracy point of view as well.

Do you agree with this comment?

  • agree1
  • disagree0
2 months ago
Richard Wood
I am a partner in a small company where our fees are 100% success based. Transactions can take 9-12 months to close and the amount of fees we receive can be substantial. The 4 partners all receive income as shareholder salaries as cashflows permit. Given the above, the current provisional tax regime heavily penalises both the company and the individual partners because the cashflows are so lumpy and sporadic. Hence I strongly support the new AIM option being proposed

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
STEWART READ
I am all in favour of paying the provisional tax as we earn. It will not impact on our bookkeeping at all.

Do you agree with this comment?

  • agree0
  • disagree0
2 months ago
Scroll To Top