How to manage business cash flow with tax pooling

‍Provisional tax doesn’t need to be a source of stress, especially when your business has seasonal highs and lows or you want to keep funds free for growth. With tax pooling, you can choose when to make your provisional tax payments in a way that best suits your cash flow.

We partner with Tax Traders, New Zealand’s leading Inland Revenue‑approved tax pooling provider. They offer flexible, affordable options that let you time your tax payments to suit your business – and avoid the higher interest and penalties that normally apply if you miss a provisional tax payment.

Tax pooling works by letting you make payments to Tax Traders, which then transfers ‘date stamped’ tax to IR so it’s treated as if you paid on time. Why tax pooling helps your cash flow

Instead of paying provisional tax on IR’s fixed dates, tax pooling allows you to make payments at a time that aligns with your business (you have up to 22 months to pay).

This means you can:

• Hold on to cash during slower trading periods.
• Free up funds for investment or unexpected expenses.
• Avoid IR late payment penalties.
• Reduce your interest cost.

Your payment options with Tax Traders

Tax Traders provides three flexible ways to structure your payments. Here’s how each option works and who it suits.

1. Interest upfront – for certainty and cost savings

This option is like fixing a mortgage: you pre-pay Tax Traders’ fixed interest cost on or before your provisional tax date. The interest cost is based on how much tax you need and when you want to pay it.

2. Single payment (tax + interest) – for flexibility

This is like a floating mortgage. You make one payment to Tax Traders covering both the tax amount and Tax Traders’ interest cost.

Under this arrangement, you can adjust the payment date (within legislative guidelines) and tax amount due, with Tax Traders’ interest cost reflecting that.

3. Instalment arrangement – for complete flexibility

This option allows you to spread payments weekly, fortnightly, or monthly – whatever suits your cash flow – with Tax Traders’ interest cost recalculated based on the remaining balance after each payment.

Ready to ease the pressure of provisional tax?

Tax pooling gives you more control, better cash flow management and fewer surprises.

If you’d like help choosing the right Tax Traders option for your situation, our team can walk you through it and set everything up for you.