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Karl Baker
Firstly I think it is great that IRD are looking at ways of making compliance and paying tax easier, especially for small businesses. This is both innovative, helpful and will ultimately increase tax take (as it is easier to be compliant) and reduce stress for business owners. Secondly - as an option, AIM would suit me and reduce the stress and worry about if I am paying enough tax and have 'planned' correctly. Plus paying as I go is so much easier to understand than trying to work out future payments. I use Xero and keeping my records up to date is good business practice anyway as I get to know where I am at financially at any given time. One problem with the standard provisional tax system is that if you underestimate the tax and have to pay more, most people will then try and earn more (to bring in the $ to cover the arrears). This can be a vicious circle as by earning more then proportionally more tax has to be paid, meaning that more work has to be done, which increases tax liability (for current and future earnings) with less for the business owner for their household, therefore requiring more work to be done, and more tax liability and proportionally less "net" pay - creating stress and resentment . Anything that prevents this happening and makes things easier (overall) which the AIM proposal does is a good thing.

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2 months ago
Henry Arkwright
Keeping accounting records up to date each month would be the ideal. So in an ideal world it would be wonderful and would work to pay tax on that basis. But in a one man business doing that could be a problem at crunch times. Also it would only suit a business that had a steady income as that could be reliable. With contract income cashflow can fluctuate wildly and this may not equate to profit at any point in time.

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2 months ago
Chris Christidis
Hello, I currently pay provisional tax for a separate client along with the GST every two months - based on the ratio method This is an easy way of paying the provisional tax and a much preferred method than the current instalment method which is unfair in regards to the application of interest and penalties at washup. - Chris

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2 months ago
Jacinta Penn
As a user of Xero and someone who is paying GST, it is not really any extra work for me to pay tax as well. I'm just not sure how it will work in the months when I have a loss. With GST I get a refund. Its not common to have a month with losses but sometimes expo season means big outgoings all at once. I do love the idea of paying as I go though, rather than having to put aside for the future when I may earn entirely different amounts. Plus I'm a growing company so my income may double or even quadruple this year, then I have a big tax bill. Paying as you go is very attractive if you can work it out.

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2 months ago
Ken Simpson
The idea of calculating income at the end of each month, or quarter would be even better, and then paying provisional tax based on that income, would be incredibly valuable for me. I'm all for it.

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2 months ago
Joanna Lapish
Yes. I would prefer to pay tax throughout the year. I once had to pay use of money interest which was not good. I also like to know exactly how much tax I should be paying and this would be better than basing it on the previous years income as my annual income varies a lot.

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2 months ago
Gwyn Jones
I like the thought of more regular provisional tax payments. If reconciling bank statements to accounting software is up to date, the additional work load would be minimal.

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2 months ago
Amanda R
Totally agree - I'm looking at a large tax bill this year after having a good year follow a pretty bad year. For sole traders who rely on contract work, it can be impossible to predict what your annual income will be. This would make life so much easier.

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2 months ago
Susan Warren
We're a small business - so small that we are only required to make six-monthly GST returns. We don't use software - just an Excel spreadsheet to summarise the one source of income and few dozen invoices for business costs for each six-month period. Switching to software would be a very significant, unnecessary expense for us, and making (presumably) monthly returns to IRD for AIM would add a great deal to our admin time. I can see the value of paying as we go rather than paying prvisional tax in advance, but I'm not sure the benefit would outweigh the time and hassle for small businesses like ours.

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2 months ago
Gwyn Jones
Hi Sue, you may find that adding in accounting software (Xero for Example) is only a small monthly cost and makes running the business so much easier the cost possibly would become insignificant to you once you get the hang of it. Saves a lot of time

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2 months ago
David Flaws
I think about accounting and tax twice a year. I code my bank statements and do a GST Calc by spreadsheet, pay my GST online, and send the coded statements off to the accountant. He emails me a few times a year and tells me how much prov and terminal to pay and when. I pay it when it is due. Works for me.

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2 months ago
Angela
I'm self-employed, working from home, with fairly regular monthly income so far, although this could change in the future. I already pay contributions to provisional tax monthly, calculated solely on my income, but would welcome that being the norm so that I don't under/overpay if my annual income isn't what I anticipated/communicated to IRD. I don't use an accounting package, as the scale of income and expenses is quite small, so I just send a schedule of these to my accountant at year end for the 'wash up', which always results in a tax refund of around $5,000. As my use of home expenses are fairly small, and these are my main expenses, and as I don't want to run a software package, I would prefer to keep paying monthly contributions to provisional tax calculated on my income only and either get a tax refund or a rebate on next year's tax once my expenses are calculated at year end.

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2 months ago
Elaine Dyett
I have just started working on commission, the amount can vary considerably and are very irregular at present. This has made it impossible to estimate my provisional tax.

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2 months ago
Graham Alderton
I'm not sure why I have been included in this because I don't run a small business. I do however receive an overseas pension so that means I do have to prepare an annual return and pay income tax accordingly. Unlike a business I don't pay GST or ACC contributions and I can't offset any expenses against tax. Personally I would welcome any method that allows me to pay my tax on a regular basis so if this concept applies to me then that is great. As far as adjustments are concerned I need to take the international exchange rate into consideration each month when I am paid and project my figures forward until the end of the year. My income may be fixed in the UK but the amount I receive here in New Zealand fluctuates depending on the strength of the NZ Dollar. Would your software accomodate this factor?

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2 months ago
Greg Pritchard
I don't think it will ad any additional work keeping records up to date. It will require more work to ensure payments are made on time. Cash flows will create issue at certain times of the year therefore will their the ability to pay as you go provided there are sufficient funds available. I fit the $5 mill threshold so not a concern to me, however why should size matter? If large turnover businesses want to pay tax, I wouldn't have thought that was an issue.

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2 months ago
carolyn lotawa
I would love to pay provisional tax as I go. I already put aside my gst so doing this for provisional tax is no problem. Also as a self employed person - I can only earn when I have clients. Trying to find the money to pay provisional tax when I haven't earnt the money before hand is a huge financial burden

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2 months ago
Angela
How about a really simple system for the self-employed, who conduct fee-for-service contracts? This new proposal seems to address problems faced by small businesses, but there are a sizeable number of self-employed people with comparatively small income/expense who need a really simple system.

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2 months ago
Helen Crampton
Absolutely great idea - I am always paying either too much provisional tax ( to the point that this financial year I did not need to pay any provisional tax in May because I had paid so much in August and January based on previous year's income) or not enough tax - because my income fluctuates quite dramatically year to year. I do my accounts monthly so it would be NO problem making payments more often.

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2 months ago
Kennedy Garland
I currently pay tax on an ongoing basis (monthly or bimonthly) so agree with the proposal.

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2 months ago
David Jurke
I like to think I'm reasonably good with the money, putting a portion of my income aside for tax, so my current twice-a-year provisional tax works for me. The exception is if I am out of work for all or part of the first half of the tax year but expect to work for the second half. In that case, you require me to pay half of my expected final tax at the end of the first half, despite it all being earned in the second half and me not having the money to pay it. In the past I've even had to borrow money from my credit card, at the exorbitant interest rate that means, to pay my provisional tax bill. Some degree of trust (or you can check) that I'm doing the right thing in this situation would be appreciated. David.

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2 months ago
Alex
It may be possible, but why create extra work? You can always adjust provisional tax payments to align to anticipated taxable income as you track though the financial year. 'Pay as yo go' sounds non-sense and will only add complexity and compliance cost to businesses. Income tax payable calculation task is a Year End task and has been that for a reason. The reason for a pushed change is the government's idea of streamlining the tax revenue as SME's contribute so much to the total tax base and administration is a little challenging to say the least. It may be good overall for the country, but should not be disguised as a concern for the small business's well being.

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2 months ago
Andrew C
Great idea but why is it linked to accounting software? Tie to GST returns and which will be monthly or every second month and accounting package is irrelevant. Should not be a greater burden as companies need to keep records up to date because of GST anyway. Also remove the $5m threshold. It's often the smaller companies that will struggle to prepare for the instalments under current system.

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2 months ago
wayne willoughby
great idea , would make life easier

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2 months ago
Ian Chatfield, ...
I think the problems with the current prov tax regime are hugely overstated by ignorant people who have little understanding of the system. Similarly, probably the same people (some probably with vested interests) vastly oversimplify the easy it is for the average SME to prepare accurate finincial data themselves. Small business clients are not particularly good at allocating expenditure and regularly allocate substantial capital expenditure to revenue accounts. As the old saying goes, 'garbage in garbarge out'.

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2 months ago
Arthut
I'm all for anything that prevents those nasty lump sum provisional payments. There needs to be more flexibility in terms of the provisional tax system to account for the fluctuating nature of income for us small business operators. I appreciate that IRD is trying to make the tax system "fairer" for us.

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2 months ago
Mark Jones
yes i like the idea, i use MYOB so should be easy enough. my only suggestion is that we still have a yearly end date so our accountant can check and adjust anything that is out. Without penalty if under obviously.

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2 months ago
James Beavis
Paying the provisional tax as you go with my get return would really suit my bu.siness

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2 months ago
Francoise
Yes, go for it! If the AIM option means we can make more regular payments based on the current year’s income, that would be a great improvement for small businesses.

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2 months ago
JOhn Kerr
There is already an option i.e the GST/Prov Tax" regime available to those business that qualify. It is a good and simple system, and should be made more easily accessible to enter into.

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2 months ago
Erin
Yes pay prov same time as GST would be great.

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2 months ago
Dan M
All I want is for the payment model to be simplified, why don't I just have a tax account with IRD rather than having to know which financial period I'm paying for or if it's even GST or whichever income tax payment. In fact on the IRD dashboard the income tax is simply one amount, but if it's over different financial years and I've paid the wrong one, it requires a phone call to sort out.

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2 months ago
anne
for small businesses I think this si good idea

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2 months ago
Heath Johnstone
The majority of SME would have the accounting system in place as good business practice and should keep their records up to date if they want to operate an efficient business. The AIM proposed makes sense to pay more regular payments based on the current income and paying the correct amount of tax. This is very prudent in today's environment, where fluctuating incomes and tight budgets are at the fore. Personally believe that the threshold of $5 million is too high and should be lowered. This would then enable hundreds of more small businesses to pay as they go and assist with their cash flows.

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2 months ago
ChrisK
I think it is a great idea. I currently pay provisional tax with my GST, which works well for me because when I have the most income, I pay the most tax, so cashflow is helped. Would this new system be like this? what is great about pay as you go is that you don't get lumped with interest charges when the annual accounts are finally filed by the tax accountants.

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2 months ago
Ian Hollins
Definitely better for businesses that have large fluctuations in the periods for revenue and profit

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2 months ago
Hamish
Sounds like a great idea — I'm keen!

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2 months ago
Anne Nillesen
I think this is a great idea. I often pay voluntary tax instalments throughout the year, just so that I don't have to worry too much at the end of the year, otherwise I spend the whole year worrying about the tax bill at the end.

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2 months ago
Katie Clark
Hi think it would be great if we could pay provisional tax the same way we pay GST, as you go.

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2 months ago
Bruce McDowall
My company McDowall Structures already uses the ratio method - which sounds very similar to this "New" method you are proposing. The ratio method works great. I have good software (Xero) and pay provisional and GST every two months. I do not see the point in limiting a good system to 5% million threshold - as it works fine for me and I have a turnover of much less than that.

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2 months ago
Diane and Trevo...
Paying as you go would be great. No more extra work involved if you have a working programme. We would welcome it!

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2 months ago
Barbara O'...
The current system works well for me and always has done for the past 35 years.

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2 months ago
Ronald S
Paying provisional tax through the year, based on current years income, is much perferred over the current provisional tax system.

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2 months ago
jared edwards
yes this would great,pay as you

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2 months ago
Gijsberdina Bevers
I think this is a good idea for a lot of small businesses, but would probably not work for me. As an itinerant teacher I have only four payments annually at the end of each school term. I am new to provisional tax since 2015, so still getting used to this, and not sure on how the balance is calculated.

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2 months ago
Jane
Yes it makes much more sense and is much easier to use the new way - bring it on.

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2 months ago
Rebecca Morehu
That would be a lot easier to manage payments.

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2 months ago
wendy sealey
I would be grateful of this change because currently the random provisional dates are hard to keep a track of and are less than accurate for a small business. With the AIM and payment alligned with GST or even every second GST period would be very useful and less stressful.

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2 months ago
Katherine Ryder
Yes! This makes so much more sense for small business where cash flow can be a problem at certain times of the year. My only concern is there needs to be a provision for non gst income to be included. My other concern was the cross over between the two when implemented .I look forward to seeing it put in place.

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2 months ago
Kim
I think that "pay as you go" would be beneficial to a lot of smaller businesses

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2 months ago
Jacqui Gibson
Great idea - easy if you use Xero like I do.

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2 months ago
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