Taxing times: Managing tax without killing cashflow

Crunch time for cashflow equals tax time for many businesses.

A Kiwi firm developed concept of tax financing unique to New Zealand 10 years ago, and now 20,000 businesses have used the services offered by Tax Management New Zealand. The company provides options for fast funding of provisional tax payments, at lower rate than typical overdraft or high IRD interest rates.

“April and May are critical times for business,” says Chris Cunniffe, CEO of Tax Management New Zealand. “April 7 is terminal tax time. It follows the end of the financial year for many. In May, provisional tax and GST payments are due. We offer way to access funding quickly for provisional tax purposes, at reasonable rate (from 5.6 percent) without any impact on existing bank funding.”
It’s called tax financing and it utilises ‘tax pool’, arranged by Tax Management New Zealand and held at the IRD.

“Tax financing can be offered to companies or individuals wanting to pay provisional tax, but who may appreciate time to collect money from creditors. Or provisional tax payers may have contract payment due soon but not yet arrived. Or company might prefer to use available cash to invest in equipment or goods for continued growth, rather than tie up funds in tax. With tax finance, there’s assurance that all tax is paid on time without the sting of IRD interest or penalties,” says Cunniffe. “The tax financing we arrange has no impact on any other bank funding company has. Because their funds are held on trust at IRD, funders require no security from the borrower.”

Interest is paid up front by the borrower, with up to 12 months before that company needs to repay the financing.
“Our founder thought up the tax pooling model more than decade ago – based around his experiences in New Zealand corporate and our distinctive tax system. Tax pooling allows taxpayers to pay their provisional tax and still keep cash flowing,” explains Cunniffe. You can check it out online at

Tax Management New Zealand arranges for funders to make tax instalments to the Guardian Trust tax pool at the IRD. Guardian Trust – leading trustee company with over 125 years’ experience in New Zealand – facilitates and oversees this tax pool.
Tax Management New Zealand has long-term relationship and reputation with the IRD, and does not handle the money in the tax pool.

Visited 9 times, 1 visit(s) today
Close Search Window