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HOW IT WORKS
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Tax Finance
How Does it Work?
Organising Tax Finance is very simple. Before your tax payment is due, you simply tell us:
- The amount you’d like to finance,
- The date your provisional tax is due; and
- When you would rather make your tax payment.
This can be done online in just a few minutes, or you can call us and we can do it over the phone. There’s no financially sensitive information you need to disclose.
We pay the tax on your due date and Perpetual Trust (New Zealands’ oldest Trustee company) holds it aside for you in our account with Inland Revenue. It is transferred to your account at the IRD when you pay Perpetual Trust on your preferred date. The effective date of transfer to your IRD account will be your original tax due date, so you stay square with the IRD.
What do I Pay?
We borrow to pay your tax and in doing so incur interest. The amount we charge you is called a Finance Charge which reflects this cost. The total Finance Charge can be paid upfront (at a discounted rate) or split into two instalments with some paid at the time your facility is approved and the rest payable on the date that you would prefer to pay your tax.
For example, your accountant tells you to pay $20,000 of provisional tax on 15 January. You would prefer to pay three months later on 15 April. You enter this information in the Tax Finance calculator (before 15 January) and are presented with the following options:
If you prefer Option 1 you pay the Finance Charge of $519.78 now. Then you pay the $20,000 on 15 April 2009. That’s all there is to it. The Trustee will then credit your IRD account with $20,000 with an effective date of 15 January 2009, your original tax due date.
If you would prefer to spread the cost of financing, choose Option 2. Under this option, a Finance Charge of $295.89 is due now, and a further $248.55 is due when you pay the Tax Amount of $20,000 on 15 April.
Once you have decided which option you would like, simply click Apply. You only need your contact details and IRD number to complete your application. It takes just a few minutes online and there are no other forms to sign.
Is It Secure?
Provisional Tax Finance Limited is able to offer this service because it has been approved by the IRD to act as a Provisional Tax Intermediary under the Tax Pooling regime. If you would like more information on this regime, please call us.
Our Tax Finance facilities are similar to Hire Purchase or Lay-by forms of finance: legal ownership of the asset (in this case tax) is transferred to you when you have paid for it. Please note, that the tax will not appear in your account with the IRD until you have paid for it (it will be held in PTF's Tax Pool account with the IRD pending payment by you). Your accountant may continue to receive reminder letters from the IRD - the IRD advises that it is unable to suppress these standard letters and that they can be disregarded. Please contact us if you require further information or a copy of the written advice we have received from the IRD.
You are not obliged to pay us the Tax Amount on the maturity date of your Tax Finance Facility, but if you don’t, no tax will be transferred to your account at the IRD. Any Finance Charge outstanding remains payable and any Finance Charge that has been paid is not refundable.
Provisional Tax Finance Limited is financed through bank funding-unlike most finance companies we do not rely on deposits from the public. For your added protection, all payments made by you are made directly to Perpetual Trust (not us) who act as independent trustee. We never have access to your money.
See what our clients are saying for more information on the benefits of Tax Finance, or get a quote/apply through our Tax Finance Calculator. If you would like to speak to someone about Tax Finance then please call or email us.
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