Although the worst of the pandemic has passed, Inland Revenue has maintained several tax breaks originally introduced because of Covid to continue to help businesses. In addition, changes to provisional tax may also ease your tax obligations.
If you can’t pay your tax on time because you were adversely impacted by Covid-19 or Covid-19 restrictions, you can ask Inland Revenue to remit penalties and interest on your overdue tax bills. Inland Revenue has discretion to remit all penalties and interest for tax payments until April 8, 2024, including provisional tax.
Provisional tax thresholds remain at $5,000 for the forthcoming tax year, up from $2,500 prior to 2020. This means you will only have to pay provisional tax if you pay more than $5,000 in tax at the end of the year from your last return.
From the 2023 tax year, the requirement to pay provisional tax instalments in full and on time will be removed for customers using the safe harbour option. However late payment penalties will still apply, and other existing qualifications will remain.
Use of Money Interest (UOMI) will only be charged if an amount remains unpaid after the end of the year tax due date, even if provisional tax instalments have not been paid in full and on time.
Let us know if you’d like to talk through your tax position for the 2023 year.