What is AIM & is it right for you?
The IRD have introduced a new method for paying your provisional tax called Accounting Income Method (AIM). It allows qualifying businesses to Pay As You Go (PAYG) your provisional tax. It is simplifying provisional tax payment process by paying it 6 times a year, like filing your GST. It endeavours to smooth your tax payments by matching your tax payments with your business income.
Does my business qualify for AIM ?
Your business is eligible if you :-
- Annual Gross Sales Income is under $5million
- You use accounting software , for example XERO or MYOB, that is AIM capable.
You are not eligible if you :-
1. Trustees and beneficiaries of a Trust
3. PIE Entities
4. Investments in foreign controlled entities
5. Superannuation fund
6. Maori Authorities
How does it work during the year?
Instead of doing your tax work once a year we do it six times.
Every 2 monthly management reports are prepared with tax adjustment entries.
This requires more work as we go during the year, but the benefits are smoothing out your cashflow – with no big lumpy tax payments and tax refunds processed during the year rather than waiting till following year (processed like a GST refund).
How do I change to AIM?
Firstly call us to discuss if this is the right fit for you, we can talk through the details that are pertinent to your business. If you decide to proceed, then we will provide you a checklist of information we require every two months, and advise the IRD of your election to opt for AIM method of paying your provisional tax.
What are the accounting fees to go onto this method ?
We will assess your current fees, and move you to a fixed monthly AIM service plan for the tax 2019 tax year. Each business is different, so we will provide pricing details to fit your business.
Please call the office and ask for more details.
Can I find out more?
Call now and find out if it’s the right fit for you.