From 1 April 2018 the IRD will be introducing another way for businesses to pay their provisional tax called the Accounting Income Method (AIM).
This is in additional to current methods currently in use today.

The purpose of this method is to take advantage of improvements in accounting software based on actual results on a more regular basis.

Software provider Xero, Click here, has been working with the IRD since 2015 to provide the functionality and answer the question; ‘If we designed provisional tax today, as if it had never existed, what would it look like?’ (IRD, 2017).

The advantages we envision are:

• Paying smaller amounts over six or twelve dates to help cashflow to spread the provisional tax liability
• Help match cashflows for businesses that have irregular or seasonal income
• Refunds will be paid out quicker if businesses experience a down year

We will provide more information on this in subsequent newsletters and the merits of either adopting this or staying with the status quo.