Although the use of software is increasing, there will be taxpayers who prefer to use their own software or not to use software at all, for example, a spreadsheet or manual cashbook. AIM is a provisional tax method that is intended to assist and complement software users but its use as a manual option is being considered. The confidence in AIM comes from the rigour and robustness of the accounting software used to calculate the payment. If a manual option was used, Inland Revenue would lose its ability to fully understand how tax adjustments have been treated. There would need to be some form of audit control and Inland Revenue would still require the provision of mid year information to support the calculation of the AIM amount.
As actual trading results are used to calculate the provisional tax payment, minimum accounting requirements are necessary for taxpayers using manual systems. We expect a standard of reasonable care to be taken when calculating provisional tax. At a minimum, to use AIM we expect a taxpayer to maintain a double entry accounting system with period end adjustments and reconcile this to a bank account, and to regularly account for debtors and creditors.