Provisional Tax Finance Limited

Frequently Asked Questions


Why should I consider Provisional Tax Finance?

Provisional Tax Finance is a simple and flexible way to pay your tax with the potential to provide you with some or all the following benefits:-

Value - we aim to offer rates which compare favourably to your Overdraft or Inland Revenue Use of Money Interest rate.;

Convenience – a Provisional Tax Finance facility will allow you to time tax payments to suit the needs of your business;

Free up Capital – this product allows you to meet tax obligations on time while leaving cash and loan facilities free to be applied to things that really matter.
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How can I be sure that there will be tax held on my behalf?

We have appointed Perpetual Trust as trustee to look after your interests and ensure that the tax set aside is held safely and will be transferred to your account with the Inland Revenue when you pay us.

When we make the provisional tax payment, Perpetual Trust will confirm to you that a Tax Deposit has been established in our account at the Inland Revenue and that it will be made available for you to purchase on the agreed date.

Perpetual Trust is the only party authorized to instruct transfers of Tax Deposits out of our account and no-one other than the trustee can access that Tax Deposit while it is available for you to purchase. When you pay us for the Tax Deposit, Perpetual Trust will instruct the IRD to transfer it into your account with the Inland Revenue.
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What is the cost of Provisional Tax Finance?

A Finance Charge is payable in either advance or in two instalments in respect of each Tax Deposit. This Finance Charge is calculated by reference to interest rates available on our web site www.taxfinance.co.nz.

This cost can be compared to your overdraft rate or the Use of Money Interest rate charged by Inland Revenue. The money is paid into an account with Perpetual Trustees who will not release it until confirmation is received by them that the Tax Deposit has been credited to our account with the Inland Revenue.
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How long can I delay paying tax by using Provisional Tax Finance?

Depending on your tax cycle, we can offer terms as short as 3 months and in regular intervals out to 18 months provided that the date chosen on which to purchase the Tax Deposit is not later than your terminal tax date. Your accountant will be able to advise when this is.
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How much tax should I finance?

Your accountant will help you estimate how much tax you need to pay on any provisional tax date and we will make that payment for you. If you are worried that you may under-estimate your tax needs you can elect to have up to an additional 20% of "Top-Up" finance.
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If my circumstances change do I have to purchase the Tax Deposit?

The agreement with us is intended to give you maximum flexibility and you have the right but not the obligation to purchase a Tax Deposit. This means you can purchase all or none of the Tax Deposit. If for any reason you do not wish to purchase a Tax Deposit then you don’t have to.
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What if by purchasing the Tax Deposit I will end up paying too much Tax?

You can claim any excess tax paid back as a refund from the Inland Revenue as if you had overpaid your tax. You will also receive Use of Money Interest. A refund is simple to apply for and your Accountant can advise you on how this is done.
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Where does Provisional Tax Finance Ltd get the funds to pay my tax?

We borrow from a bank to make the tax payments. Because we are borrowing in bulk by wrapping up the needs of many people in one facility we can command more competitive rates of finance than most individuals.
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How do I access Provisional Tax Finance?

It's simple. We require no financial information nor do we need any security or guarantees. All we need is information concerning your tax balance date and so long as you are neither insolvent nor in default with the Inland Revenue, then you are eligible for Provisional Tax Finance.
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